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Saving for a house deposit to get onto the property investment ladder is tough. Especially with the cost of living drastically going up. After bills, rent\/mortgage, groceries, petrol, insurance\u2026 there isn\u2019t a whole lot left for saving. But that doesn\u2019t mean it\u2019s impossible! By adopting these 10 ways to save for a house deposit you\u2019ll be ten steps closer to building out your portfolio and creating future wealth.<\/p>\n
Typically, you\u2019ll need at least a 20% deposit (an 80% loan-to-value ratio – LVR), for an investor home loan if you want to avoid paying\u00a0<\/span>lenders mortgage insurance\u00a0<\/span><\/a>(LMI). Some banks will allow you to put down a deposit smaller than 20% to buy an investment property, but you\u2019ll need to pay LMI which adds an additional cost to your loan.<\/p>\n As a rule of thumb, aiming for a bigger deposit is better because it shows the lender that you\u2019re a good saver and are able to manage your finances. There are a few banks that will allow a 5% deposit but that is usually the lowest amount they will entertain. A 5% deposit on a $500,000 loan equates to $25,000, which is far less than many prospective investors imagine their deposits will need to be.<\/p>\n BIGGER DEPOSIT VS SMALLER DEPOSIT\u00a0<\/strong><\/p>\n