This Rocklea home in Brisbane was listed at offers over $749,000 mid-year. A 10 per cent deposit in the suburb now would be around $80k based on median prices now.
A major Aussie bank has scrapped Lenders Mortgage Insurance in a sweeping move that would see deposits tumble to as low as $31k in some inner-city capital suburbs.
The move by Ubank is set to shake up the competition nationally, slashing hundreds of thousands of dollars from Aussie mortgage costs, offered to both owner occupiers and investors – amid huge ramping up of first home buyer schemes nationally.
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UBank has scrapped LMI for its special 10 per cent deposit scheme.
The new 10 per cent deposit Flex and Neat home loan is for both owner occupiers and property investors with principal & interest repayment and no LMI.
UBank chief lending officer Ray Jokhan said their new 10 per cent deposit, no LMI home loan would also give “real hope” to younger buyers keen to enter the property market sooner and build equity over time.
“We’ve already seen customers buy sooner with our existing 15 per cent deposit product, using it as a stepping stone to their first home. As they build equity and their loan-to-value ratio drops below 80 per cent, they become eligible for better rates – and we regularly review those with them”.
The 10pc no LMI offering opens the door to greater rentvesting as well, the bank said – a trend where a growing number of first home buyers choose to rent where they want to live while buying property in more affordable markets.
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Suburbs where houses will have the lowest deposit levels within 10km of state capital CBDs. Source: Ubank/Cotaity.
Based on current lending criteria, UBank expects that with a deposit of around $60,000 and a PAYG income of $125,000, some eligible customers may be able to purchase a property within the range of $450,000.
UBank research found the dollar gap between a traditional 20pc deposit and Ubank’s 10pc deposit home loan with no LMI quite significant – with savings of up to $175,000 upfront depending on the suburb.
QLD
One of the most accessible house market within the 10km radius of Brisbane’s CBD is Rocklea where a 10pc deposit would come in around $80k based on median prices. UBank research also pick Gailes as an affordable market further out with a 10pc deposit of $70k, while for units Spring Hill and Woodridge deposits would be $62k and $46k respectively.
NSW
UBank uncovered Sydenham as the most affordable house market within 10km of Sydney CBD. Compared to the rest of the country, a 10pc deposit was substantial at $175k, but it was also $175k less than the 20pc deposit hurdle for anyone looking in the area, and around $170k less than a 10pc deposit for the average inner Sydney house market.
For units, the pick was Harris Park, 19km from the city, where a 10pc deposit hurdle was just under $50,000, and almost $50k less than the traditional 20pc deposit hurdle.
VIC
Maidstone in Melbourne’s west was one of the most affordable suburbs within 10km of the CBD for house hunters, with a 10pc deposit at around $86,500 – around half the traditional 20pc deposit. Further out Coolaroo’s is even cheaper at $61k 17km north of Melbourne CBD.
SA
Lightsview’s 10pc deposit offered upfront savings of around $80k on the normal 20pc deposit hurdle,UBank found, while Brahma Lodge came in just under $69k further out but within a 20km radius of the CBD.
WA
Perth’s Westminster has a 10pc deposit entry of $71k, UBank said, while Glendalough units 5km from the CBD came in around $48,000.
TAS
Hobart’s Glenorchy was a standout with around $46k required for a 10 per cent deposit for a median unit, while Clarendon Vale houses were about $49k for a mid priced house.
NT
Units in Gray, Darwin have a 10pc deposit level of $31k.
ACT
Scullin in Canberra has an $86k 10 per cent deposit level given median house values of $859k within 10km of the CBD, while Greenway’s was $62k a little further out.
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