Buying a property requires at least 5% deposit and that will need to be added to the stamp duty required in the state where the property is being purchased. Lenders Mortgage Insurance (LMI) will also be required however this premium can be collateralised. Collateralisation means the insurance premium will be added to the principal loan amount which will be paid with the normal repayments. Also, just to be clear, LMI is insurance for the lender not for the borrower. This is an insurance premium put in place to ensure the lender, who is believed to be taking on greater risk with a high loan to value ratio, doesn’t fail or go out of business. The borrower is required to pay this to protect the lender.

Depending on your circumstances it may be a good idea to get into the property market as soon as possible thus buying with as little as 5% deposit. Based on average Australian growth in the property market, can you afford to wait?