What is LVR?
How much money you can borrow to buy your first home will depend on a number of things. This includes your financial situation and the type of property you are wanting to purchase.
How much will I need for a deposit?
The minimum deposit depends on the type of loan. As a guide try it helps to save at least about 20% of the property’s value, plus a bit extra for other costs. If you’re borrowing more than 80% of the property’s value, your lender may require you to pay Lenders’ Mortgage Insurance. The more you have for a deposit, the less interest you will pay.
To find out what your repayments could be, use our home loan repayments calculator. This calculator helps you to estimate the true cost of your mortgage, including stamp duty, rates, insurance, maintenance and more.
There are a number of costs associated with purchasing a property. It’s important to understand these costs and how they might impact your repayments and your overall budget.
Lenders’ Mortgage Insurance (LMI) protects lenders should their customer default on their repayments. Whether you pay LMI and how much depends on your loan to value ratio.
The LVR is the loan amount as a percentage of the value of the property. If you want to borrow $450,000 to buy a property valued at $500,000, that’s an LVR of 90%. All home loans have a maximum LVR.
The bigger the deposit you can save, will mean the less money you have to borrow to buy a property. The amount you borrow has a direct impact on the amount of interest you pay. Between cutting back on general spending, sticking to a budget, and ensuring your savings are kept in the best account, there are lots of ways you can help save for a house deposit.
If you’re struggling to save for a home deposit the Heritage Family Guarantee Loan can help.
A fixed rate loan allows you to lock an interest rate for a fixed period of time. It helps safeguard you against any changes to interest rates, making it easier to know exactly what repayments will be for the fixed period. A disadvantage could be that you won’t benefit from any decrease to interest rates, and breaking the fixed term may incur a cost.
A variable rate loan means the interest you pay can go up and down in response to changes in the Reserve Bank of Australia cash rate, or changes made by the credit provider. The advantages and disadvantages of a variable rate are pretty simple – if the rate goes down, you’ll be paying less, if it goes up, you’ll be paying more.
Heritage offers a formal pre-approval process to help give you some peace of mind when you’re wanting to make an offer on a property. Visit your local branch or phone 13 14 22 to find out if you qualify for a pre-approval.
Download our handy Application Checklist (pdf) to make sure you’ve got what you need.
Start your application online now, call 13 14 22, or visit your nearest branch to get the ball rolling.