ISCOVER
Aspiring home buyers may be waiting too long to speak to brokers, as the upfront savings required could be less than expected, according to Great Southern Bank.
Many Australians may be waiting longer than necessary to speak with brokers and could seek out advice while holding a smaller deposit, new Great Southern Bank research shows.
The bank’s No Place Like Home report for April found that more than half (46 per cent) of Australians think they need at least $100,000 saved before seeking advice, while 20 per cent believe $50,000 is the minimum, and 13 per cent think they need at least $20,000.
In spite of many savers waiting until they have over $100,000 to seek advice on how to buy property, 52 per cent said they wished they had purchased a house sooner.
‘Busting the myth of the 20 per cent deposit’
Great Southern Bank research found that a misconception existed for borrowers in believing they needed a certain amount saved before seeking advice, describing the view as a ‘major blind spot for Australians’.
The problem was particularly pronounced with Gen X and Baby Boomers.
Several initiatives are available to help prospective home buyers get on the property ladder, something Great Southern Bank would help in ‘busting the myth of the 20 per cent deposit’.
Lenders can waive lenders mortgage insurance (LMI) for home buyers if they apply for a mortgage through the Home Guarantee Scheme (HGS), which lets borrowers get on the property market with a deposit as little as 2–5 per cent.
One of the election promises from the Albanese government was to remove income and placement limits for the First Home Guarantee.
As such, from January 2026, all first home buyers will be eligible to purchase a home with a 5 per cent deposit without lenders mortgage insurance (LMI) needed.
In line with commitments made in the lead-up to the 2025 federal election, the government may also make other changes this year, including to income and price caps, Housing Australia told The Adviser this week.
Borrowers will also be able to access the long-delayed Help to Buy scheme, which will see the government contribute up to 40 per cent of the purchase price for new homes or 30 per cent of existing homes for eligible borrowers.
Under Help to Buy, eligible low- to middle-income earners would only need a 2 per cent deposit to qualify for a standard loan with participating lenders and wouldn’t be required to pay lenders mortgage insurance (LMI).
Maria McQuillan, a director and senior broker at mortgage brokerage Concinnate Financial Services, said first-time buyers waiting to save for a 20 per cent deposit were missing out on affordable opportunities as property prices rose.
“More recently as property values have increased, 20 per cent is not the standard deposit we’re seeing. Majority of first home buyers are actually securing their property with 5-15 per cent,” she added.
“The First Home Guarantee (FHBG), Family Home Guarantee (FHG), family guarantor and LMI discounts are all beneficial in situations where it might take years to save a 20 per cent deposit and could mean missing out on the opportunity to buy at current prices.”
[Related: Major housing schemes set to change this tax year]
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