Are you better off saving a big deposit or diving right into a mortgage?

[toomanyshoes]

I would wait, we've been going back and forth with the same thing.

There are huge benefits to a larger deposit. You pay less interest on your property in the long run, there's more room to move if your circumstances where to change or rates went up, you might not have to pay lenders mortgage insurance and so on.

I'm also inclined to believe prices are going to fall or at least stagnate of the next couple of years. We live in a popular suburb and there's been houses on the market for over 12months.

[Cassius2]

I'd be inclined to save. but this is the perspective of a buyer occupier. MP has made some great points about the redraw possibilities, but then again if you have to pay mortgage insurance it's an extra cost over the life of the loan IYKWIM.

[Junglemum]

Thanks ladies.

MP- We are pretty flexible. But the two main focus areas are Williamston/Newport and the Frankston area. The first because i love the area and it is somewhere we could possibly live in the future. The second because the prices are good and the rental returns on investment are pretty good there. But i don't think we'd ever live there. We have never owned so yes we'd be eligible for the first home owners. I was surprised that prices had gone up in both areas, as they are so different....
When we come back, i'll be going back to work, so we'd have two wages again making mortgage repayments much easier. But yes we do need to think about that. Good point! I'd love any info you have MP. The reality is that we probably would never live in it unless something drastic changed. DH is a farm manager and we will probably live out of town, even if i am working in the city. Another option would be to look down Geelong way as i can always get work down there. The main problem with our marriage is our working lives. DH needs to be in the country and i need to be near a fairly major city. But we'll work it out. I'd be interested any any info you had.

TMS- I keep thinking that prices will slow or fall, and people say it will happen, but it just doesn't seem to?!

[Amity]

They;re not going to fall IMHO. They might stay steady, but they won't fall. Unless we have a major recession.

My place has gone up 25% in the 18months that I've had it. Scary.

Personally, I'd go WIlliamstown - you'll get much better capital growth and if it's a place you'd like to live, well that's a bonus. Also much easier to get to Geelong!