Large regional centres for the first home loan Scheme?

The new Loan Deposit Scheme allows eligible first home buyers to secure a loan with a deposit as low as 5%. The capital city price caps will apply to large regional centres with a population over 250,000, namely:
  • The Gold Coast;
  • Newcastle and Lake Macquarie;
  • The Sunshine Coast;
  • Illawarra (Wollongong);
  • and Geelong, recognising that dwellings in large regional centres tend to be significantly more expensive than other regional areas.
Example of a $400,000 property and a 5% deposit versus a 20% deposit:
  • Property cost = $400,000
  • Deposit = $20,000 (5%)
  • Loan amount = $380,000
  • Interest rate = 4.00% over 30 years
In this scenario your costs are as follows:
  • LMI = $12,768
  • Monthly repayments = $1,814
  • Property cost = $400,000
  • Deposit = $80,000 (20%)
  • Loan amount = $320,000
  • Interest rate = 4.00% over 30 years
In this scenario your costs are as follows:
  • LMI = $0
  • Monthly repayments = $1,527
If you wanted to save a 20% deposit you'd need an extra $60,000 (but no LMI). This would equal around 33 months of mortgage repayments with a 5% deposit. But with a 20% deposit your repayments would be noticeably cheaper, at $1,528 a month. That's $286 a month less. Skipping the LMI means you buy the property faster and save $12,768 in LMI costs. But you'll pay $103,122 more in interest costs over 30 years with a 5% deposit.

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