If you are unable to provide a deposit of 20 percent or more, the majority of lenders will require mortgage insurance. Evidently, the smaller the deposit, the larger the mortgage insurance required. For instance, if you provide a 10 percent deposit for a $500,000 home loan, the insurance costs might reach $8,000 or more. Still, thanks to this insurance, Australians may purchase a home with as little a deposit as 5 percent.
In summary, as you can see, buying a home might be your priciest purchase. While becoming a homeowner comes with evident rewards, you should consider the hidden costs, as well, to make the best financial decision for your situation.