Why should I try to save 20% deposit instead of 5%?

Short answer: No 1% premium, better rates, less total interest, price fall buffer.

What this actually means in plain English

With 20% deposit you avoid the First Home Loan premium, get better interest rates, pay less total interest, and have a buffer if house prices fall. On a $600,000 house, 20% deposit saves you about $5,700 per year in premiums alone. Over 30 years, that is $171,000 less paid.

Key Facts

No 1% First Home Loan lender premium
Access to standard bank rates (often lower)
Lower total interest over loan life
Equity buffer if property values decline
More lenders available at 80% LVR

Example

House Price: $600,000

Loan At80: $480,000 at 7.0%

Loan At95: $570,000 at 8.0%

Monthly Difference: ~$750/month

Thirty Year Difference: ~$270,000 total

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