How Much of a Deposit Do I Need to Buy a House in Perth

A deposit is required when buying a home on a mortgage. Most lenders require a deposit of 20% of the sales price for you to buy a house in Perth. Other lenders may offer lower deposit rates, starting at 5%, but these come with additional costs like lender mortgage insurance. Let’s review why you need a deposit and what options you have if you cannot afford one.

Why You Need a Deposit

When buying a home, you have two options: paying the full sales price and related upfront costs in cash or getting a mortgage. Most homeowners use mortgages to finance their homes, as the prices are out of reach.

With Perth’s median house price reaching a record $620,000 in March 2024, mortgages are more feasible as a path to homeownership. However, to access an affordable mortgage, you must have a good credit score and a minimum deposit. Mortgage lenders require a minimum deposit of 20% of the house value, excluding additional upfront costs.

Your ability to pay that deposit shows that you’re not a buyer at risk of defaulting on the mortgage. That said, it is possible to find lenders who will offer you a mortgage with less than 20% of the deposit, but you must invest in a lender’s mortgage insurance, which increases the overall home loan cost. Other financing options like grants are available if you cannot afford to raise the deposit.

Although 20% is often the minimum deposit, you can pay as high a deposit as you can afford. Paying a higher deposit minimizes the loan amount you’ll borrow and, subsequently, the interest amount you pay.

What is the Average House Deposit In Perth in 2024?

In 2024, the average house deposit in Perth is around $138,000, based on a typical 20% deposit for a median house price of $690,000. This amount can vary based on the lender’s requirements and the buyer’s financial situation.

What is the Minimum Deposit for a House In Perth in 2024?

In 2024, the minimum deposit for a house in Perth is typically 5% of the property value. For a median house price of $690,000, this amounts to approximately $34,500. However, lenders might require mortgage insurance for deposits below 20%​

What if I Can’t Afford the Deposit?

Given the average prices of houses in Perth, it can be hard to raise the 20% deposit required to secure a mortgage. For instance, a home worth $900,000 requires a minimum deposit of $180,000. If you need help to raise the required deposit, you pursue several alternatives to raise the funds. These include:

  • Get a guarantor home loan through the assistance of a loved one who has a substantial equity in their home
  • Find low-deposit loans to finance your purchase. These loans, however, may have additional costs, such as higher interest rates and lender mortgage insurance.
  • Find government assistance programs geared towards supporting a house purchase. The most common ones include the First Home Guarantee Deposit Scheme, the First Home Super Saver Scheme, the First Home Owner Grant (FHOG), and the Family Home Guarantee. These programs have eligibility criteria, so look it up to ensure you’re eligible.
  • Find a cheaper house. Although the median price for homes in Perth is close to $1,000,000, you can find homes at a lower range depending on the suburb, the type of house, and the amenities available in that location. 
  • Give yourself more time to save a deposit for your dream home

Summing Up

If you intend to get a mortgage, you need a 20% deposit to buy a home in Perth. However, you can explore other options, including family assistance, government grants, and low-deposit loans, to finance your home. Explore different mortgage providers and homebuyer assistance programs to get started on your homeownership journey.

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