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Houses at Jubilee

How Much Money Do You Need To Buy a Home?

Saving up a deposit for your first home can seem overwhelming. But knowledge is power – take some of the fear away by figuring out exactly how much money you’ll need to secure a home loan. With a range of benefits on offer at the moment, it may be way less than you think…

You may have heard the common wisdom that you need to save up at least 20% of a house’s asking price as your deposit. The median house price across Melbourne is $941,000 (according to REIV as of Dec 2020). This would mean that you’d need to save up about $188,200 – which sure seems daunting! 

If you can save up 20%, that’s obviously a really great start. It means you’ll be paying less interest over the long term and might have more flexibility and choice in your loan. But that 20% figure actually comes from old thinking. You previously needed this amount in order for the banks to see you as lower risk and so that you could avoid paying a big extra fee in the form of lender’s mortgage insurance. 

However, the government’s First Home Loan Deposit Scheme essentially makes this insurance cost a non-issue so you may only need a 5% deposit. That’s a much more doable $47,050 deposit required on a median-priced Melbourne home. 

Even better, 5% is only a $20,450 deposit for a three-bedroom townhome or $21,484 for a house and land package at Jubilee for our most budget-friendly homes.

There are even more bonuses that could help you lower that target and reach your deposit goals faster: 

  1. If you’re a first-time buyer, you may be eligible for the $10,000 First Home Owner Grant.
  2. We’re currently paying your mortgage for up to 2 years* when you buy titled land at Jubilee. That may mean you can spend more on your deposit. 

Suddenly, you’re so much closer to reaching your deposit goals! To be sure, search for home loan deposit calculators online and then make time to meet with an expert financial advisor who will be able to calculate all of the starting costs for you.

*T&Cs apply. There is a $25,000 cap, calculated by reference to the loan repayments for the land purchase price under the Contract of Sale. That the amount paid to purchasers is payable as a rebate following settlement. See landing page for full T&Cs.

Please use this article as a guide only and seek your own financial and legal advice.

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