Unlock the secrets to your deposit for a home loan

A deposit for a home loan in Leederville typically sits between 5% and 20% of the property value, though the exact amount depends on which lender you use and whether you qualify for a government scheme.

Leederville sits close to the Perth CBD, with cafes along Oxford Street and proximity to the WACA and Lake Monger. Properties in the area attract first home buyers and investors looking for inner-city access without the premium attached to suburbs further south. The mix of older character homes and newer townhouses means purchase prices vary, but most buyers approach the transaction with a clear idea of how much they need upfront and where that funding can come from.

What lenders actually accept as genuine savings

Most lenders require at least 5% of your deposit to come from genuine savings. Genuine savings means funds you've accumulated over time in your own account, held for at least three consecutive months. Salary deposits, regular savings transfers, and term deposit maturity proceeds all count. Funds received as a one-off payment, such as a tax refund or bonus, usually need to sit in your account for three months before lenders treat them as genuine savings.

Consider a buyer in Leederville who receives a $10,000 bonus in January and plans to apply for pre-approval in February. That bonus won't count as genuine savings until it's been held in their account for three months. If they already have $8,000 saved separately over six months, that portion qualifies immediately. The three-month requirement exists because lenders want to see a pattern of financial discipline, not just access to a lump sum.

How the Australian Government 5% Deposit Scheme works in Perth

The Australian Government 5% Deposit Scheme lets eligible first home buyers purchase with a deposit as low as 5% of the property value. Housing Australia provides a guarantee to the lender of up to 15%, which brings the combined deposit and guarantee to 20% and removes the need for Lenders Mortgage Insurance. There are no income caps and no annual place limits. The property price cap in Perth is $850,000 for metropolitan postcodes.

Applications go through participating lenders, not directly to Housing Australia. Both the purchase price and the lender's assessed value must fall within the cap. The scheme can't be combined with Help to Buy, but you can usually pair it with state-based stamp duty concessions if you meet the eligibility criteria for both programs.

Where gifted deposits fit into your application

Gifted funds from an immediate family member can form part of your deposit, but most lenders still require at least 5% to come from your own genuine savings. The person gifting the funds will need to sign a statutory declaration confirming the money is a gift, not a loan, and that they have no interest in the property. The gift needs to be traceable, which means a clear bank transfer with supporting documents.

In our experience, buyers who receive gifted deposits often underestimate the paperwork involved. Lenders will ask for bank statements from both the buyer and the person providing the gift, along with proof that the funds have been transferred. If the gift comes from an offshore account or involves currency conversion, expect additional scrutiny and possibly a delay while the lender's credit team reviews the source.

Deposit requirements for investment properties in Leederville

Investment properties typically require a larger deposit than owner-occupied homes. Most lenders want at least 10% from your own funds, and many prefer 20% to avoid Lenders Mortgage Insurance altogether. Investment loans also attract different serviceability calculations, which can affect how much you're able to borrow even if you have the deposit saved.

Leederville's rental market has stayed active due to demand from young professionals working in the city and students attending nearby universities. A buyer purchasing a two-bedroom apartment as an investment would need to show they can service the loan using a minimum rental income assessment, even if the actual rent is higher. That serviceability test often has a larger impact on borrowing capacity than the deposit itself, particularly if the buyer already has an owner-occupied loan elsewhere.

How Lenders Mortgage Insurance changes the equation

Lenders Mortgage Insurance protects the lender if you default on the loan. It's not optional when your deposit falls below 20%, unless you're using a government guarantee scheme. The premium is calculated as a percentage of the loan amount and varies based on your loan-to-value ratio. A buyer borrowing 90% of the property value will pay a lower LMI premium than someone borrowing 95%, even though both are paying the insurance.

You can usually add the LMI premium to your loan rather than paying it upfront, though that increases your total loan amount and your ongoing repayments. Some lenders also offer LMI waivers for certain professions, including medical practitioners, accountants, and lawyers, provided the buyer meets specific criteria. Those waivers can save thousands of dollars, but they're not advertised widely and the eligibility rules differ between lenders.

Using equity from another property as your deposit

If you already own property, you can use the equity in that property as a deposit for your next purchase. Equity is the difference between what your property is worth and what you owe on it. Lenders will let you borrow against that equity, up to a certain loan-to-value ratio, without needing to sell the original property.

A Leederville buyer who owns a property in a neighbouring suburb valued at $600,000 with a remaining loan balance of $350,000 has $250,000 in equity. If the lender allows borrowing up to 80% of that property's value, the buyer could access $480,000 in total, meaning $130,000 of usable equity. That amount could cover the deposit and purchase costs for a second property without the buyer needing to save additional cash. The trade-off is that both properties are now secured against the loans, and serviceability calculations become more complex when you're carrying multiple mortgages.

What happens if your deposit falls short

If you're close to your target deposit but not quite there, a few options remain. Family guarantee loans allow a parent or close relative to use the equity in their own home as additional security, which can reduce or eliminate your need for LMI. Guarantor loans carry risk for the guarantor, so most lenders require them to obtain independent legal advice before signing.

Another option is to adjust your purchase price or look at properties with a lower entry point. Leederville has a range of property types, from studio apartments to larger character homes, and a modest shift in budget can sometimes make the difference between needing LMI and avoiding it altogether. Delaying your purchase by a few months to build your savings further is also worth considering if it means you can access a lower interest rate or better loan features by increasing your deposit.

Call one of our team or book an appointment at a time that works for you. We'll review your savings, confirm what lenders will accept as a genuine deposit, and help you access home loan options that match your situation in Leederville.

Frequently Asked Questions