2. Make a Clear Plan for Your Deposit and Understand Your Borrowing Capacity

For many, a significant hurdle is saving enough for a home deposit or investment property. Understanding your capacity to borrow and set realistic goals can help you stay motivated.

Typical deposit requirements:

• First-time buyers: Usually aim for a minimum of 5%-20% of the property price.
• Investors: Often need at least 20%, especially if purchasing rental properties.

How to plan:

• Assess your savings: Include overseas funds, which can be converted and transferred legally.
• Understand how your deposit affects costs:
  • A 5% deposit might require you to pay for Lenders Mortgage Insurance (LMI)—an extra cost that protects the lender if you default.
  • Larger deposits reduce or eliminate LMI and can get you better interest rates.

Your borrowing capacity:

• Use online calculators or speak with a mortgage broker.
• Provide accurate income documentation to understand what loan size you qualify for.
• Remember that recent changes by the Reserve Bank of Australia (RBA) mean lenders now consider potential rate rises when assessing your ability to service a loan.

Practical tip:

• Set a savings goal with a timeline. For example, saving $15,000 over 12 months for a $100,000 deposit on a property worth $500,000.

Important: If you’re transferring overseas savings, ensure you understand exchange rates and transfer costs. Also, check if your bank or broker requires specific documentation for international funds.

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3. Commit to a Regular Savings and Investment Strategy

Building wealth is about consistency. Setting up a disciplined savings plan can make your 2025 financial resolutions a reality.

Why it’s essential:

• Regular contributions help grow your deposit faster.
• Investing surplus income can generate passive income over time.
• It creates financial discipline and awareness.

How to start:

• Open a dedicated account: For savings or investments, separate from daily expenses.
• Automate deposits: Set automatic transfers from your main account.
• Invest prudently: Diversify across assets—shares, bonds, ETFs, or managed funds.

Tips for migrants and newcomers:

• If you have overseas savings, consider converting funds during favorable exchange rate periods.
• Use reputable platforms familiar with international clients.
• Seek advice from financial planners experienced in cross-cultural situations.

Additional suggestions:

• Review and adjust your savings plan quarterly.
• Take advantage of government schemes like the First Home Loan Deposit Scheme (if eligible).
• Consider professional advice for investing in Australian assets, especially as rules and taxes differ from other countries.

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Addressing Common Concerns

Many clients worry about eligibility, documentation, and navigating the Australian system.

Do I qualify for a mortgage?

• Visa requirements: Most lenders require you to hold a valid Australian visa—temporary, resident, or citizen.
• Residency status: Some lenders grant loans to non-residents, but with stricter conditions and higher deposits.
• LMI considerations: Foreign investors usually face higher deposits and LMI, and must comply with FIRB (Foreign Investment Review Board) approval.

Can I use overseas savings?

• Yes. You can transfer funds into Australia legally, but lenders need to see source proof.
• Large international transfers may attract reporting requirements under AML (Anti-Money Laundering) laws.

What about government rules?

• The FIRB reviews foreign investments and imposes certain restrictions. For example, non-residents typically can buy new properties but might face restrictions on existing homes.
• Stay updated with each state’s regulations and your visa conditions.

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Final Thoughts

The beginning of a new year is a perfect opportunity to review and strengthen your financial foundation. Setting clear resolutions like organizing your documentation, planning your deposit, and establishing a disciplined savings routine can set you on a path to success.

As someone who has helped many families and individuals from diverse backgrounds settle in Australia, I know that thoughtful planning is key. With the right documentation, a clear understanding of your borrowing capacity, and a commitment to regular savings, you can make 2025 your most financially secure year yet.

"Success in finance is not about how much you make, but how well you plan and manage what you have." — Unknown

Start today. Your future self will thank you.

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Ready to take the next step? Contact a trusted mortgage broker or financial advisor to personalize your plan and navigate the Australian finance landscape with confidence.