Most first-time buyers plan for the down payment and are caught out by everything else. The gap between the two is often large enough to delay a purchase, so it is worth mapping early.
Your own contribution
Lenders fund a proportion of the property value and expect you to fund the rest. Two details catch people out. First, the proportion varies by lender, property type and loan size — plot loans are typically funded less generously than a built home. Second, the percentage applies to the lender's own assessed value, not to the price you agreed with the seller. Where the valuation comes in lower, the shortfall is yours.
What sits on top
- Stamp duty and registration, which vary by state and are usually paid by you
- Processing and documentation charges from the lender
- Legal verification and technical valuation of the property
- Property insurance, where the lender requires it
- Society transfer charges or builder-levied fees on a resale
- Brokerage, where an agent is involved
- Immediate costs after possession: fit-out, movement, utility connections
What lenders look for in your savings
It is not only the amount but its history. Funds that have accumulated over time in your own account read very differently from a large deposit that arrived last week. If a family member is contributing, expect the lender to ask about it and to want the arrangement documented.
Building the number
Work backwards from the property price rather than forwards from your savings: assess the likely funded proportion, add registration and statutory costs, add lender charges, add fit-out, then keep a reserve. That total is what you need in hand, and it is usually well above the down payment alone.