THE POWER OF 20 DEPOSIT/EQUITY
Many First Home Buyers have asked me why they need to save up 20% deposit when others can get a mortgage approved with just 5% or 10% only.
Here’s why having a 20% deposit is a game-changer:
1️⃣ Easier Mortgage Approval ✅
Banks see a 20% deposit as lower risk, meaning:
Fewer restrictions on your application.
No need to prove 12+ months with your current employer (a requirement for First Home Loan with a 5% deposit).
2️⃣ No Lenders’ Mortgage Insurance (LMI) 💰
With a 5% deposit First Home Loan, you must pay 0.5% of your loan amount as LMI.
Example: Borrowing $800,000? You’ll pay $4,000 in LMI—omg, that's lots of money!!!
3️⃣ No Low Equity Margin (LEM) or Low Equity Premium (LEP) 🚀
Borrowing with less than 20% deposit means banks charge extra interest (LEM/LEP) ranging from 0.25% to 1.20% depending on the lender and your LVR.
4️⃣ Better Interest Rates & Cashback Rewards 🎉
You qualify for special discounted rates from banks.
Many lenders offer up to 1% cashback on your loan. This can help cover your legal cost, building inspect fee or get you a beautiful new piece of furniture.
5️⃣ Easier Refinancing for Better Deals 🔄
With 20% equity, switching to another lender for better rates or cashback is much easier.
Low-equity borrowers often struggle to refinance due to LEM/LEP fees. Now, you are "stuck" lol.
A 20% deposit isn’t just about securing a mortgage—it’s about getting the best deal, paying less interest, and keeping more money in your pocket! 💰🏡.
💬 What are your thoughts? Drop a comment below!
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Poll: 🗑️ Would you be keen to switch to a fortnightly rubbish collection, or do you prefer things as they are?
Aucklanders, our weekly rubbish collections are staying after councillors voted to scrap a proposed trial of fortnightly pick-ups.
We want to hear from you: would you be keen to switch to a fortnightly rubbish collection, or do you prefer things as they are?
Keen for the details? Read up about the scrapped collection trial here.
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80.9% Same!
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19.1% Would have liked to try something different
Some Choice News!
Many New Zealand gardens aren’t seeing as many monarch butterflies fluttering around their swan plants and flower beds these days — the hungry Asian paper wasp has been taking its toll.
Thanks to people like Alan Baldick, who’s made it his mission to protect the monarch, his neighbours still get to enjoy these beautiful butterflies in their own backyards.
Thinking about planting something to invite more butterflies, bees, and birds into your garden?
Thanks for your mahi, Alan! We hope this brings a smile!
Scam Alert: Fake information regarding December Bonuses from MSD
The Ministry of Social Development is reporting that fake information is circulating about new ‘December bonuses’ or ‘benefit increases’
If you get suspicious communication, please contact Netsafe.
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