How much does your child need?

Home ownership is a big responsibility and commitment. As you plan to buy your first house, you need to be knowledgeable and resourceful to sort through the best deals.

Make sure there are no last-minute surprises that leave you flat footed or with bills that were never budgeted.

Assess affordability

Some things to take into account:

Design a budget of how much you have for a deposit after buying and moving costs.
Start with finding out how much you can afford in repayments after factoring in every other expense, and how much you’re hoping to spend.

Use our children's calculator to find out how much help you may need with your deposit, and how much getting help from your parents could save you.

It’s important to keep in mind, it’s not just a deposit you’ll need to save for when planning to buy a home.
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There are a number of upfront costs when buying a home, such as:

Transfer duty or stamp duty, which is based on the value of your home
Lenders Mortgage Insurance (LMI) if you’re borrowing more than 80% of your home’s purchase price
pest, building, or strata reports
legal or conveyancing fees
mortgage registration fees
land tax and registration of title
loan application fees including, independent valuers fees

Be aware that you may have to pay some of these upfront costs, such as building reports or legal fees, multiple times if you offer or place bids on more than 1 home.

You should also check multiple banks’ calculators as amounts and rates may vary. Having a 20% deposit, or as large a deposit as possible, can save you thousands on LMI and up to 0.5% on interest rates.

When applying for a home loan you should be able to understand everything that’s put in front of you to sign or check off. Many lenders will look for “Genuine Savings”, which is normally defined as money saved or held over time. If the whole deposit is from a gift or loan this is often called a “Gifted Deposit”.

Each lender is different: some require a gift letter to go with the deposit, others will take any gifted deposits. To find out more, check out our Genuine Savings, Gift Letter, and Loan Letter Documents below. Serviceability calculators are important. Check out how much you can borrow and how much you need for a deposit. Look to your potential lender or use the Moneysmart calculator.

Go to childrens' calculator

Setting up the home search criteria

Once the budget is sorted, the next step is to define what is most important in a house for you.

Define what is needed, what is wanted and what you would like. This helps you understand what’s most important when compromises are required. Make sure you check each property for damage: fresh paint, differences from the online photos, mold, or cracks could mean serious headaches down the road. Talk with real estate agents about what work has been done and if anything is broken, and get professional pest and building inspections done as well.

The buying process

Agreeing to buy a home is a big step.

Make sure you fully understand every conversation, document and all costs in detail. Ask lots of questions. Have a trusted friend, family member, or legal or financial support read over all the documents to make sure nothing has been missed.

Always ask the agent, banks, your family, even Google to be clear on what you are signing and why. Remember to check with the bank what your transfer limit is because it may not be sufficient to cover your deposit amount. Checking this ahead of time can reduce stress when nearing the settlement date.

Check out our free Home Buyers Budgeting Checklist at the end of this page

For parents

Your children may be the ones buying the house but you’ll always want them to make the right choices. Regardless of whether you’re helping them financially, make sure to keep up to date with their planning and decisions so you can lend a helping hand if needed.
Some good general questions to ask:

Have they worked out their house buying budget and budget post buying? Make sure they've factored everything in.
What are their must haves when buying their house? Make sure they know what they want in the house so they don’t end up with a place they can’t stand for the long term.
Where are they sourcing their home loan, and why? If they haven’t weighed up different lenders they may be spending thousands more than necessary.
Has a professional read through their loan documents? Two sets of eyes are safer than one: try to ensure someone experienced reads all the documents as well.

Considering using the equity in your home?

There are a range of loans available in the market to help you fund your child’s purchase.

Access the equity in your home as a lump sum for five years with the certainty of a fixed interest rate.

2Be Equity Advantage loans are based on your assets and credit history: not your job or income status.

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At Inviva, we love empowering our customers to realise their dreams

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The information on this website is general in nature and does not take into account your personal circumstances, objectives or financial situation. Before acting on information on this website, please consult your professional or financial advisor to determine whether it is appropriate for your circumstances.

How much does your child need?

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