Raghu and Sindhura Ragi had built up $150k for a deposit which amounted to about 15 per cent in a fast rising market.
A couple who saved $150,000 for their first home almost gave up in the face of hidden costs that would have set them back at least half a year.
Raghu and Sindhura Ragi have been watching the goal posts shift as they built up enough for what ended up being a 15pc deposit for a median-priced Brisbane home.
Ipswich property prices have seen some of the biggest rises in the country since the pandemic. Picture: Nigel Hallett
But they faced being locked out by charges like lenders mortgage insurance – let alone over $38k in stamp duty if it was not their first home.
They had moved to Queensland from New Zealand, working hard, with high hopes of being able to afford to buy into an Ipswich suburb – eyeing a brand-new five-bedroom, four-bathroom home.
But the area they were saving for was seeing one of South-East Queensland’s fastest-growing property booms, bolstered by strong schools, a major hospital, shops, parks and a train station nearby.
“We really wanted to buy in Spring Mountain as it ticked every box,” Mr Ragi said. “But with only a 15 per cent deposit saved, the out-of-pocket LMI cost was around $16,000, so I began looking at other lenders for a better deal.”
Those phone calls saw the Ragis secure a low-deposit home loan with no LMI – and their dream home in a suburb where the median price has jumped 94.4 per cent in the past five years to $1.01m.
“That phone call to Ubank saved me $16,000 and really strengthened my offer on the house,” Mr Ragi said.
Combined with Queensland’s first-home buyer stamp duty waiver, that gave the couple the budget to compete in the open market – allowing them to buy a home six months earlier than if they’d waited to save up more of a deposit.
Raghu and Sindhura Ragi faced a longer wait time to build up more of a deposit or being locked out by LMI charges, until they landed a Ubanks low-deposit home loan with no LMI.
Ubank chief home lending officer Ray Jokhan said the couple’s experience was increasingly common.
“We’re hearing from customers who are surprised they don’t need to wait years to save a full 20 per cent deposit, with some choosing to get into the market sooner, build equity earlier and reassess over time.”
He said low deposit loans were not for everyone, but added “we’ve seen customers use our 15 per cent deposit product to buy sooner as a stepping stone into the market”.
“In some cases, entering earlier with a smaller deposit can support long-term equity growth, with opportunities to access better rates as they build equity in their property over time.”
For Mr Ragi, apart from seeing their kids grow up Queenslanders, the lifelong cricket fan is happy to be able to visit the Gabba in person.
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