We did a 99% loan 5 years ago with ING. But we still needed around $30k in savings because of stamp duty, legal fees, fee this, fee that. Also paid $12k in LMI but this was put onto the loan amount. We also did interest only to keep repayments down.
It worked for us in that we were able to get into a house we liked 5 years ago, get pets etc.
We only ran into trouble a couple of years ago during peak GFC and needed to repair massive water damage in our bathroom only partially covered by insurance. Because ING no longer do 99% loans only 90% at that time, we couldn't get any extra money on our home loan because our property wasn't valued at under 90% LVR.
Having seen the effects of the GFC since our purchase though I might be more wary, as other people have said if your property value goes down you'll be left with a huge debt still. I personally wouldn't use anyone as a guarantor, I don't feel comfortable with that.
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05-10-2012 08:10 #11
05-10-2012 12:18 #12Senior Member
- Join Date
- Apr 2012
I think it's worth it.. What I would do is go with a bank that has a no deposit home loan and yes they probably will charge more interest BUT what you need to do is pay off as much of the house as possible. After a while you can get the house reassessed for what it's worth and then switch to a different bank that offers a better home loan interest rate when you've paid off 20% of the house value. Yes you'll pay extra interest to begin with.. but IMO that's still better then dead money.
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