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Buying a home usually requires some kind of deposit, and often determines how much a financial institution will lend you. 

How much deposit will you need?

The amount of deposit varies by lender, and by the value of the property you wish to buy. As a general rule, you should aim for 20 per cent. For deposits less than 20 per cent you will be required to pay Lenders Mortgage Insurance. It is possible to avoid Lenders Mortgage Insurance by using a family members home as security for your loan.

What are acceptable forms of deposit?

Teachers Mutual Bank recognises different sources of deposit to be used when purchasing a home. These include:

Cash savings

Cash savings are ideal, of course. We like to see at least 6 months of account statements to demonstrate your accumulation of savings.

Cash gifts

If you have been given a gift of cash - from a parent, for example - it must be non-repayable. That is, the provider of the funds must declare that there is no intention of those funds having to be paid back.

Property guarantor

This is often referred to as a gift of equity and is where a person (called a 'guarantor') gives additional security, such as their own property, and they are not the borrower. We will accept security where the guarantor is registered as a proprietor on the property being offered as security, and when they will be obtaining no benefit from the loan. We will not rely on more than 25 per cent of the value of the property that the guarantor is offering as additional security. Over time, the balance of your loan will reduce through regular loan repayments and the additional security property may no longer be required. At this time, a request may be lodged to release the additional property as security.

First Home Owners Grant

If you are eligible for the First Home Owners Grant (FHOG) you can put that towards your deposit. The First Home Owners Grant is a one off $15,000 grant that the Federal Government pay towards the purchase or construction of a home by a first time buyer.

Don't have a deposit yet?

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Open a high interest online savings account and watch your deposit grow quicker.

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Lenders Mortgage Insurance

Helping you into your dream home sooner, if you do not have a large deposit.

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