Home loan deposit calculator

How much deposit do I need to buy in WA?

The number that matters is 20% of the purchase price, because under 20% lenders mortgage insurance applies. A loan below that mark is still possible with the insurance added, and plenty of people buy that way. It is a cost, not a wall.

The trap is what the 20% is measured against. It is 20% of the price, not 20% of what is sitting in your account, and it is counted after transfer duty has been taken out of your savings.

Take a $650,000 purchase with $100,000 saved. Duty on the general rate is $24,890, which leaves $75,110 as an actual deposit, or 11.6% of the price, and a loan of $574,890 at an LVR of 88.4%. A 20% deposit plus duty on that purchase needs $154,890, so the shortfall is $54,890.

What this home loan deposit calculator works out

It runs your own numbers through the RevenueWA scale and then does the deposit arithmetic in the right order. Four inputs, one answer.

1. 1

   Purchase price

   The contract price, or your best estimate of what you will pay. Duty is assessed on the price or the market value, whichever is higher.

2. 2

   The savings you have

   Everything you can put towards the purchase, before anything comes out of it. This is the pile that duty is paid from.

3. 3

   Who is buying

   First home buyer, owner occupier or investor. Buyer type changes which duty scale applies, and on a first home purchase it changes the answer a great deal.

4. 4

   What you are buying

   A house or unit, or vacant land, plus a toggle for a foreign buyer. Land has its own first home thresholds and foreign buyers pay a surcharge on top.

• The loan you would need, as the headline figure
• WA transfer duty on the purchase, on the scale that applies to you
• The deposit left after duty comes out of your savings
• That deposit as a percentage of the purchase price
• The resulting loan to value ratio
• The savings needed for a 20% deposit plus duty, and the shortfall against it

It is an estimate from the figures you type in, not an approval, and it does not look at your income or your credit file. We are brokers with a panel of more than 40 lenders, so once you know the deposit position we can tell you which of them will lend on it.

Transfer duty comes out of the same pile as your deposit

This is the sum people get wrong. They save a deposit, then discover duty is a separate cash cost that has to come from the same money, and the deposit they thought they had shrinks by five figures overnight.

Read the bottom row twice. At $800,000 the first home owner rate saves a buyer $15.50, because the concession tapers to nothing exactly at its ceiling. Above $800,000 it is not available at all.

The first home buyer duty exemption in WA

A first home buyer pays no transfer duty on a home worth up to $600,000. Between $600,001 and $800,000 duty is charged at $16.15 for every $100 above $600,000. Vacant land is free up to $450,000, then $20.14 per $100 to a ceiling of $550,000.

On the $650,000 example above, that is $8,075 of duty instead of $24,890. The same $100,000 of savings then leaves a deposit of $91,925 rather than $75,110, and an LVR of 85.9% rather than 88.4%. Nothing about the buyer changed except which scale they qualified for.

Genuine savings, gifted deposits and guarantors

Having the money is not always the same as having the deposit. Many lenders apply a genuine savings requirement, where part of the deposit has to be money you saved rather than money you were given, held for a period before you apply.

Gifted deposits and the gift letter

A gift from family is common and perfectly acceptable to a lender, provided it is genuinely a gift. That is what a gift letter is for: a signed statement from the person giving the money confirming it is not repayable and that they retain no interest in the property.

A guarantor works differently again. Instead of adding cash, a family member offers equity in their own property as additional security, which lowers the LVR on your loan. It is a real liability for them, and it should be a conversation with everyone in the room rather than a favour asked over the phone.

Which of these is workable, and how much of your deposit can be gifted, varies between lenders more than almost anything else in an application. It is worth knowing the answer before your parents transfer anything.

What a house deposit calculator cannot tell you

The deposit is one of three tests, and clearing it does not clear the other two. A file can be perfect on deposit and still be declined.

• The deposit and LVR test, which is what this page works out
• Serviceability, which asks whether your income covers the repayment at a buffered rate after living expenses and commitments
• The property itself, which has to satisfy the lender on valuation, type, size and location

The one that catches people is the third. A valuation below the contract price raises your LVR without you doing anything, because the ratio is worked out on the lender's number rather than yours.

Run the borrowing power calculator alongside this one. The smaller of the two answers is the one that decides what you can buy, and it is not always the deposit.

Closing the gap between what you have and what you need

If the shortfall line is the one bothering you, there are only so many levers, and it is better to pick one deliberately than to keep saving with no target.

• Buy at a lower price, which cuts the deposit and the duty at the same time
• Accept lenders mortgage insurance and buy sooner, if the numbers stack up against another year of rent
• Use a guarantor to lift the security position without more cash
• Check whether you qualify for the first home owner rate, which can be worth more than months of saving
• Keep the deposit in a form the lender will accept, and leave it there
• Clear or reduce credit card limits, which costs you nothing and protects the serviceability side

Bring us the number this page gives you and we will tell you what it buys. That is a conversation about which lender fits your deposit, not a sales pitch, and it is free.