How can we afford to buy a first home?

Many first home buyers try to save about 20 per cent of the purchase price of the type of home they are interested in buying. A 20 per cent deposit saves the borrower from having to pay lender’s mortgage insurance which can cost thousands of dollars.

However 20 per cent in a white hot property market can be difficult to save and property prices are rising fast. Sydney prices are up 17.6 per cent over the last 12 months. Melbourne prices are up 10.6 per cent.

The good news for first home buyers is that most analysts predict that the recent extraordinary price growth cannot continue.

Source: The Age