Mortgage Deposit Calculator

Deposit, LVR and Available Funds

The deposit is the purchase price minus the loan. The cash a purchase needs is larger, because stamp duty, other purchase costs and settlement adjustments are paid on top of the deposit.

In the starting example, a $750,000 purchase at an 80% LVR has a $600,000 loan and a $150,000 deposit. Adding $28,000 of duty, $3,500 of other costs and a $222.83 council rates adjustment brings the cash required to $181,722.83.

Compare that cash figure with your available funds, not with the deposit alone. Savings and gifts of $160,000 leave a funding shortfall of $21,722.83, even though they exceed the $150,000 deposit.

LVR is the loan divided by the property value. Lenders measure it against the value they assess, so a valuation below the price raises the LVR for the same loan.

Building the Funding Position

A funding position lists every source of money beside every use. Uses are the purchase price, stamp duty, other purchase costs and settlement adjustments. Sources are the loan, savings, gifts, released equity and any grants or assistance.

The deposit is part of the purchase price, so the table lists the price once as a use and the loan as a source. Total sources minus total uses gives the surplus or shortfall shown in the results.

Take a hypothetical $500,000 purchase with $20,000 of duty and other costs, so uses total $520,000. A $400,000 loan, $100,000 of savings and a $10,000 gift supply $510,000, which leaves a $10,000 shortfall. Buying the same property with cash alone takes $520,000 of savings.

With a $400,000 loan, $60,000 of savings and $60,000 of equity released from another property, the same purchase balances at $520,000. Released equity is a second loan, so a lender assesses its repayments along with the new home loan.

Enter the stamp duty from the stamp duty calculator and include a concession only when you meet its conditions. Add lender fees and any mortgage insurance you pay in cash to other purchase costs.

Genuine Savings and First-Home Assistance

A funding surplus shows that the amounts you enter cover the purchase. It does not show that a lender accepts where the money came from or that a government scheme applies.

Lenders set their own rules on which funds count as genuine savings. The calculator treats every dollar you enter the same way, so confirm these contributions with the lender before relying on them.

• Gifted money, and the evidence the lender asks for to show the gift is not a loan.
• Released equity, which depends on a valuation of the other property and approval of the extra borrowing.
• Grants and other assistance, including whether each payment arrives before settlement.
• Savings that include recent large deposits, borrowed money or funds held for someone else.

Under the Australian Government 5% Deposit Scheme, the government guarantees your loan to a participating lender. That lets you buy with a smaller deposit. You still pay the purchase costs and repayments, so the guarantee never appears as a source of funds.

To model a scheme purchase, set the LVR to 95%, or 98% for an eligible single parent or legal guardian. Then enter the duty and other costs as usual.

Home Guarantee Price Caps

Select a property location to compare the purchase price with its published 5% Deposit Scheme cap. The results show whether the price is at or below the cap and by how much.

Caps differ by state, territory and area. In New South Wales the cap is $1,500,000 in the capital city and listed regional centres and $800,000 in other areas. The ACT has one $1,000,000 cap.

Both the purchase price and the lender's valuation must be at or below the cap. For a new home built on vacant land under separate contracts, the land price and the build cost count together.

Some suburbs span postcodes with different caps. Confirm the location category with the official price caps and postcode search before relying on the comparison.

The comparison does not decide eligibility. The scheme also sets conditions on citizenship or residency, prior property ownership and living in the home, and the participating lender must approve the loan. The deposit check uses the purchase price, while a lender measures the minimum deposit against its own valuation.

Working Back to a Purchase Ceiling

The purchase ceiling is the highest price your entered cash and borrowing can fund after acquisition costs. A lender's borrowing approval is a separate decision that depends on income, expenses and credit checks the calculator does not assess.

Enter purchase costs as a share of the price plus a fixed amount. The calculator finds the price where the loan needed reaches your maximum borrowing, then the price where it reaches the maximum LVR. The lower of the two is the ceiling.

Write cash as C, maximum borrowing as B, the cost rate as c, fixed costs as f and the maximum LVR as L. The borrowing limit is then (B + C - f) / (1 + c), and the LVR limit is (C - f) / (1 + c - L).

In the starting example, $620,000 of maximum borrowing and $160,000 of cash, with costs of 4% plus $3,500, support $746,634. The 80% maximum LVR limits the price to $652,083, so that is the ceiling. At that price the loan is $521,666.32 and the costs are $29,583.32.

More cash or a higher maximum LVR lifts an LVR-limited ceiling. A higher maximum borrowing lifts the ceiling only when borrowing is the lower limit. Check the borrowing figure itself with the borrowing power calculator.

To close a shortfall, enter a monthly saving amount and an assumed annual return. The calculator counts whole months until those savings reach the shortfall. In the starting example, $21,722.83 takes 11 months at $2,000 a month and a 4% return.

The return applies only to new savings and stays constant. The shortfall stays fixed too, so recalculate when the price or costs change. For a longer savings projection, use the compound interest calculator.

Apportioning Settlement Bills

Settlement adjustments split council rates, water and strata bills between the seller and the buyer by the days each owns the property in the billing period. The calculator adds the result to the funding position as a separate line.

Enter each bill's amount, the first and last day it covers and whether the seller has paid it. The calculator counts both of those days, then gives settlement day to the party you select.

When the seller has paid, the buyer reimburses the seller for the buyer's days. When the bill is unpaid, the seller credits the buyer for the seller's days and the buyer pays the bill later.

For a hypothetical $300 water bill covering 30 days, each day costs $10. With settlement on day 12 and the seller paying for settlement day, the seller owns 12 days and the buyer 18. A paid bill adds $180 to the buyer's cash. If the buyer pays for settlement day instead, the figure becomes $190.

Your contract decides which party pays for settlement day and which charges are adjusted. Some charges, such as water usage, can depend on a meter reading. The conveyancer's settlement statement sets the final amounts, so use these figures to plan the cash you hold for settlement.