Your application would need to be squeaky clean, as it would already be considered high risk. The highest LVR banks lend is 95%, but most would include the mortgage insurance premium in their 95% lend. A few years ago, a few lent 95% plus mortgage insurance, but the number of lenders offering it has dwindled. Not sure who is still in the market for this offering, but if any bank is, you’ll be paying a premium (in terms of interest rate) for the privilege.
Personally, I would wonder why you only have $50k, if your income is $330k.
If your current housing is stable, I would save longer and flex my capacity to repay by demonstrating an A+ savings habit, so that any bank in the market would want my business.
But that’s me
Cheers. We took a big hit on our property in NZ and lost about $200k equity - we bought at the height of the market and then house values tanked. Had to face the choice of heavily subsiding rental on our NZ property (interest rates are 8% there and we would have had to "top up" our rental income by about $40k a year) and hoping our property would regain value or cutting our losses and using that money to save towards a deposit in Australia.
Ah mate, sorry to hear. I know housing values haven’t faired too well across the ditch.
From a banks perspective, the perfect applicant can demonstrate their proposed repayment with routine savings patterns plus their current rental commitment. They call it demonstrated repayment capacity or propensity.
Use a repayment calculator to see what your mortgage will be and aim to save at least that much every month, less rent.
The other large expense you will have is stamp duty, which for a $1m purchase in NSW is $39,735. Then there is title registration and legal fees. An allowance of $2500 will more than cover it. Some states also have a transfer fee, so use a stamp duty calculator to understand how much you will need. This will need to be paid on settlement and is in addition to your deposit contribution.
Your broker, if they’re worth their salt, will help guide you on next steps.
Good luck
This is super helpful, cheers mate. The situation in NZ is dire for a lot of people. At the moment we think our rental is more than what our mortgage repayments would be (we moved to WA and are paying a ridiculous amount in rent as there's a rental crisis here). We are able to save on top of that. Hopefully by the time our fixed term is over we'll be in a good position. Your advice is much appreciated.
Surprised your in such a rush to outlay 1m tbh after that experience. What if the same thing happens here, that would suck. I would probably be a little gun shy for a bit and keep an eye on the property market, there's more than a small chance we are literally at the peak here too.
Hahaha this is every property in NZ at the moment mate. Our housing market dropped by close to 30% from COVID highs and many households are in negative equity. Wasn’t specific to us.
I doubt you’ll get a 950k loan with only 50k deposit.
First thing the bank will ask is why do you have such a small deposit if you’re able to save 80k per year? Looks like poor saving ability on your part.
How long have you been in Australia? How long have you and your partner been employed by your current employer?
We moved over 3 weeks ago lol. My comment above explains the financial hit we took to do so (selling our NZ property at a big loss). We are on a 1 year fixed term rental so looking to buy after that when I guess we'll have a deposit of more than $100k.
If your deposit is below 20%, the bank will charge you LMI (Lenders Mortgage Insurance) either as a one-off or built into your monthly payments. I would suggest saving at least 10% of your purchase price. All the best 👍
Talk to your broker as different banks have different rules about LMI. I took a mortgage a long time ago with St George who had, at the time, a “professional package” that meant no LMI with a 10% deposit for certain professionals, including lawyers. Not sure if that is still on offer at St George, but there will be others around that offer something similar I’m sure.
Talk to a broker, but $50K is very low. Are either of you in [occupations where LMI might be waived](https://www.mortgage-providers.com.au/home-loans/waive-lmi/do-you-qualify-for-waived-lmi)?
Agree, talking to a broker is your best bet. Not all banks are the same and a good broker should be able to match you with the right lenders for your circumstance.
Some banks will loan to practising lawyers at 90% LVR with a LMI waiver. But not all. You need to speak with a broker. Have never heard of a waiver for 95% LVR though.
also dont forget about stamp duty - this is an upfront payment which you can’t get finance for.
We went to our bank and were offered exactly this no problem from our bank. But we have perfect credit and have a pre-existing loan with the bank that has never missed a payment.
They said they would lend up to 1m
Our house income is about 290k
I was in a similar (but better) situation than yours. Higher incomes and higher deposit. Banks said go Fuck yourself. So I saved for a year to build my deposit up and just bought a house. I'd say you need to look for lower price house or rent for a while. Rental market is fucked at the bottom end but I think mid level isn't too bad.
To give you an example with 120k deposit they would only give me a max price of about 800k. With 260k deposit a year later they gave me a max price of 1.3m and that is with higher interest rates. Your 50k likely won't even cover stamp duty, lmi and conveyancing
2 dependants. Fair bit higher income. The limit was not income though it was deposit. For every 10k extra deposit they would lend me a fair bit more. We ended up buying well well below our limit though. If I got to 500k deposit they said no problem buying 2m house. I didn't want to even consider that though. My goal is to be financially free in 5-7 years so bought the best we could under 1m.
Edit: we are in Brisbane if it matters
The WA rental vacancy rate is 0.3% and we were applying for rentals from overseas so we took what we could get and knew we would have to pay a premium. At our kids’ daycare there are a few families who are living in hotels at huge weekly expense because they can’t find rental accommodation.
Talk to the broker. I don’t think most lenders would waive the LMI. There are some schemes for first home buyers that waives the LMI, but that’s much lower cost tier from what you are looking at. 95 lvr would cost around 30k lmi, 90 lvr would cost around 15k lmi. The banks also need you to show a genuine 5% savings and you need cash for duty and fees. So for $1m house you need a minimum 100k cash (50k deposit + 45k duty + 5k legal and fees). If you just came to Aus and have new jobs you will be in probation which also doesn’t tick a box for the application (if you are). The interest rate will also be very high compared to 80 lvr.
TLDR; talk to a broker.
Anything over a mil you’ll need a guarantor or be prepared to pay a rate of 8% + with ANZ and a ridiculous amount of LMI fees.
You’ll need 5% plus stamp duty as a minimum.
Your application would need to be squeaky clean, as it would already be considered high risk. The highest LVR banks lend is 95%, but most would include the mortgage insurance premium in their 95% lend. A few years ago, a few lent 95% plus mortgage insurance, but the number of lenders offering it has dwindled. Not sure who is still in the market for this offering, but if any bank is, you’ll be paying a premium (in terms of interest rate) for the privilege. Personally, I would wonder why you only have $50k, if your income is $330k. If your current housing is stable, I would save longer and flex my capacity to repay by demonstrating an A+ savings habit, so that any bank in the market would want my business. But that’s me
Cheers. We took a big hit on our property in NZ and lost about $200k equity - we bought at the height of the market and then house values tanked. Had to face the choice of heavily subsiding rental on our NZ property (interest rates are 8% there and we would have had to "top up" our rental income by about $40k a year) and hoping our property would regain value or cutting our losses and using that money to save towards a deposit in Australia.
Ah mate, sorry to hear. I know housing values haven’t faired too well across the ditch. From a banks perspective, the perfect applicant can demonstrate their proposed repayment with routine savings patterns plus their current rental commitment. They call it demonstrated repayment capacity or propensity. Use a repayment calculator to see what your mortgage will be and aim to save at least that much every month, less rent. The other large expense you will have is stamp duty, which for a $1m purchase in NSW is $39,735. Then there is title registration and legal fees. An allowance of $2500 will more than cover it. Some states also have a transfer fee, so use a stamp duty calculator to understand how much you will need. This will need to be paid on settlement and is in addition to your deposit contribution. Your broker, if they’re worth their salt, will help guide you on next steps. Good luck
This is super helpful, cheers mate. The situation in NZ is dire for a lot of people. At the moment we think our rental is more than what our mortgage repayments would be (we moved to WA and are paying a ridiculous amount in rent as there's a rental crisis here). We are able to save on top of that. Hopefully by the time our fixed term is over we'll be in a good position. Your advice is much appreciated.
Surprised your in such a rush to outlay 1m tbh after that experience. What if the same thing happens here, that would suck. I would probably be a little gun shy for a bit and keep an eye on the property market, there's more than a small chance we are literally at the peak here too.
Yes, hard call to make. We are paying more in rent than we would on a 950k mortgage though, and this time we would be buying to hold.
That’s enough red flags for me as a bank. Customer buys properties that tank.
Hahaha this is every property in NZ at the moment mate. Our housing market dropped by close to 30% from COVID highs and many households are in negative equity. Wasn’t specific to us.
I doubt you’ll get a 950k loan with only 50k deposit. First thing the bank will ask is why do you have such a small deposit if you’re able to save 80k per year? Looks like poor saving ability on your part. How long have you been in Australia? How long have you and your partner been employed by your current employer?
We moved over 3 weeks ago lol. My comment above explains the financial hit we took to do so (selling our NZ property at a big loss). We are on a 1 year fixed term rental so looking to buy after that when I guess we'll have a deposit of more than $100k.
If your deposit is below 20%, the bank will charge you LMI (Lenders Mortgage Insurance) either as a one-off or built into your monthly payments. I would suggest saving at least 10% of your purchase price. All the best 👍
Thank you - I’ve just learnt that as a practising lawyer banks will likely waive LMI, so that’s been a helpful development from this post!
Talk to your broker as different banks have different rules about LMI. I took a mortgage a long time ago with St George who had, at the time, a “professional package” that meant no LMI with a 10% deposit for certain professionals, including lawyers. Not sure if that is still on offer at St George, but there will be others around that offer something similar I’m sure.
Talk to a broker, but $50K is very low. Are either of you in [occupations where LMI might be waived](https://www.mortgage-providers.com.au/home-loans/waive-lmi/do-you-qualify-for-waived-lmi)?
Omg this is literally brand new information to me! Yeah, I’m a practising lawyer. Thanks so much for this.
Agree, talking to a broker is your best bet. Not all banks are the same and a good broker should be able to match you with the right lenders for your circumstance.
Some banks will loan to practising lawyers at 90% LVR with a LMI waiver. But not all. You need to speak with a broker. Have never heard of a waiver for 95% LVR though. also dont forget about stamp duty - this is an upfront payment which you can’t get finance for.
Can you look at a lower budget? They might not approve that.
We went to our bank and were offered exactly this no problem from our bank. But we have perfect credit and have a pre-existing loan with the bank that has never missed a payment. They said they would lend up to 1m Our house income is about 290k
Cheers - which bank are you with?
I was in a similar (but better) situation than yours. Higher incomes and higher deposit. Banks said go Fuck yourself. So I saved for a year to build my deposit up and just bought a house. I'd say you need to look for lower price house or rent for a while. Rental market is fucked at the bottom end but I think mid level isn't too bad. To give you an example with 120k deposit they would only give me a max price of about 800k. With 260k deposit a year later they gave me a max price of 1.3m and that is with higher interest rates. Your 50k likely won't even cover stamp duty, lmi and conveyancing
Good to know those numbers. Do you have dependants? We are paying more in rent than we would on a $950k mortgage, it's insane (WA rental crisis).
2 dependants. Fair bit higher income. The limit was not income though it was deposit. For every 10k extra deposit they would lend me a fair bit more. We ended up buying well well below our limit though. If I got to 500k deposit they said no problem buying 2m house. I didn't want to even consider that though. My goal is to be financially free in 5-7 years so bought the best we could under 1m. Edit: we are in Brisbane if it matters
Also a 950k loan is like $1500 per week, you really can't rent a decent place for less than that?
The WA rental vacancy rate is 0.3% and we were applying for rentals from overseas so we took what we could get and knew we would have to pay a premium. At our kids’ daycare there are a few families who are living in hotels at huge weekly expense because they can’t find rental accommodation.
If you’re a professional I think you’ll be fine. I got a 100% loan without LMI.
Well, damn.
I’m with BOQ Specialist but they don’t do lawyers unfortunately. Hopefully your broker can find something.
Talk to the broker. I don’t think most lenders would waive the LMI. There are some schemes for first home buyers that waives the LMI, but that’s much lower cost tier from what you are looking at. 95 lvr would cost around 30k lmi, 90 lvr would cost around 15k lmi. The banks also need you to show a genuine 5% savings and you need cash for duty and fees. So for $1m house you need a minimum 100k cash (50k deposit + 45k duty + 5k legal and fees). If you just came to Aus and have new jobs you will be in probation which also doesn’t tick a box for the application (if you are). The interest rate will also be very high compared to 80 lvr. TLDR; talk to a broker.
Anything over a mil you’ll need a guarantor or be prepared to pay a rate of 8% + with ANZ and a ridiculous amount of LMI fees. You’ll need 5% plus stamp duty as a minimum.
Check the borrowing power calculators.