A home loan deposits is an initial contribution to the purchase price of a property. It can be anywhere from 5% to 20% of the total property price.

How much of a deposit do you need for a home loan?

It is a requirement for most lenders and acts as a safety net to protect them in the event that you default on your home loan. It also demonstrates that you are committed to saving for a house and paying off your mortgage in full.

The size of a deposit you need depends on the property price and the length of the mortgage. The bigger your deposit, the less you’ll need to borrow to buy the property, which will mean lower interest payments on your home loan over the term of the loan.

You can also try and build a larger deposit using your existing savings, or through the First Home Owners Scheme (FHOS). The FHOS can help you save up for a deposit by providing a grant that covers some of the Lenders Mortgage Insurance costs, so this is worth considering.

Building your deposit can be a long-term goal and you’ll need to make some sacrifices along the way, but it can pay off in the end when you’re ready to buy your first home. Follow our tips below to maximise your deposit and get the keys sooner.

The value of your deposit can affect the lender’s assessment of your application and your interest rate, as it will determine how much risk they are willing to take on. You should aim to have a minimum of 20% of the total property value saved up as a deposit to secure the best loan terms possible.