What LVR should I expect to get?

My partner and I have been looking at purchasing a townhouse in Melbourne’s inner northern/eastern suburbs in the price range of $600-750k, however we know we don’t have the deposit required right now.

We’re mid 20’s, first home buyers, strong financial savers, recently finished university and have come out with about a $30,000 HELP debt each. Currently we’re on a combined income of around $190k.

So my question is - Given that we are both on strong incomes with little expenses and are save around $6,500 per month, what kind of LVR could we expect? Is as low as 5% possible?

 

Hey Daniel, some lenders will do 95% LVR + capitalize LMI. As first home buyers you'll have stamp duty exemption up to $600K ($0) and a concession up to $750K so just keep that in mind.

The other option to explore is using a parental guarantor if you've got a family member who has a property with sufficient equity in one of their properties. This could get you in quicker and avoid LMI completely.

 

Thanks for that Morgs. I’ve always tried to avoid using parents as a guarantor as I don’t want to potentially put pressure on them. If I were to use them as a guarantor, how would I go about breaking that link once we have a large sum behind us? Would I just refinance?

 

Hi Daniel

Welcome to the forum.

When you reduce the LVR to 80%or lower (loan /bank valuation), by either reducing current loan or by market moving up, you could release them straightaway, matter of filling a form with some banks.

 

Exactly, either refinancing or paying down the loan enough to release it. Each lender works slightly differently in regard to the way it works; as an example with some independent legal advice is mandatory.

The other thing that is on the horizon that may help is this: details are still pretty thin on the ground around exactly how it'll work but they're in a consultation period now. I suspect it will be limited though and I know there are lots of FHBs waiting for this so may be a bit of a rush on the market when it does come through:
Helping Australians Buy Their First Home