A 10% deposit is enough to buy property in Randwick.
You will pay Lenders Mortgage Insurance with anything under 20%, but that cost can be added to your loan amount rather than paid upfront. The difference between saving another 10% and buying now is often measured in years, and in a suburb where units and townhouses regularly transact above the million-dollar mark, waiting can mean watching affordability slip further out of reach.
What Lenders Mortgage Insurance actually costs
Lenders Mortgage Insurance is a one-off premium that protects the lender if you default on the loan. It is calculated based on your loan amount and your loan to value ratio. With a 10% deposit, your LVR sits at 90%, which puts you in the higher premium bracket.
The premium is typically between 1.5% and 3% of the loan amount depending on the lender and whether you are buying as an owner occupier or investor. You can pay it upfront or capitalise it into your loan, which most buyers do. Capitalising adds the cost to what you owe, but it means you do not need extra cash at settlement.
Some lenders offer No LMI Loans to certain professions, including medical practitioners and accountants. If you work in one of these fields, you may be able to borrow up to 90% without paying the premium at all.
How much you need saved beyond the deposit
Your deposit is only part of what you need upfront. Stamp duty in New South Wales is the larger cost, and in Randwick it adds up quickly. For an owner-occupied purchase, stamp duty starts at around $40,000 on a property valued near $800,000 and climbs to over $50,000 once you move past the million-dollar mark.
You also need to budget for legal fees, building and pest inspections, and loan application costs. These typically add another $3,000 to $5,000 to your upfront spend. Lenders want to see that you have saved these costs separately from your deposit, which they call genuine savings.
Consider a buyer purchasing a unit in Randwick. They have saved $90,000 for a 10% deposit. The lender will also expect them to show they can cover stamp duty and settlement costs without borrowing further or relying entirely on a family gift. If stamp duty is $45,000 and other costs come to $4,000, they need close to $140,000 in total accessible funds.
Genuine savings and how lenders assess your deposit
Lenders define genuine savings as money you have held in your own account for at least three months. This includes funds in a savings account, term deposit, or offset account. It does not include cash you just received from selling assets or money sitting in an account you cannot prove you saved over time.
Most lenders require at least 5% of the purchase price to come from genuine savings when you are borrowing at 90% LVR. The remaining 5% can come from other sources like a gift from family, a first home owner grant if you are eligible, or equity in another property.
If you have been renting in Randwick and steadily putting money aside each month, those regular deposits into your account will satisfy the genuine savings requirement. Lenders review your bank statements going back three to six months, so consistency matters more than one large lump sum that appeared recently.
Variable, fixed, or split loan structures with a 10% deposit
Your deposit size does not limit which home loan structure you can choose. You can still access variable rate, fixed rate, or split loan options at 90% LVR.
A variable rate gives you flexibility to make extra repayments without penalty and typically comes with an offset account, which reduces the interest you pay if you keep savings in it. A fixed rate locks your repayments for a set period, usually between one and five years, but limits how much extra you can pay off each year and often does not include an offset.
A split loan divides your borrowing between variable and fixed portions. You might fix half your loan to protect against rate rises while keeping the other half variable so you can pay down that portion faster. This approach is common when buyers want some certainty but do not want to lose all flexibility.
If you are buying an investment property in Randwick, you will typically pay a slightly higher interest rate than an owner occupier, and some lenders apply stricter serviceability tests. Your deposit and LMI calculation work the same way, but your investment loan will be assessed based on rental income and your existing financial commitments.
Offset accounts and loan features at 90% LVR
Most lenders offer the same loan features at 90% LVR as they do at 80%, but not all packages are identical. Some lenders reserve their lowest rates or premium loan products for borrowers with a 20% deposit, while others price their loans the same regardless of LVR once LMI is paid.
An offset account is one feature worth prioritising. It is a transaction account linked to your home loan where every dollar you hold offsets the balance on which you pay interest. If you have a $900,000 loan and $20,000 sitting in your offset account, you only pay interest on $880,000.
Some lenders charge a monthly fee for loans with an offset account, typically between $10 and $15 per month. Others include it at no extra cost. Over the life of a loan, an offset account can reduce the interest you pay by tens of thousands of dollars if you keep a buffer in it, which makes the monthly fee worthwhile.
Redraw facilities let you access extra repayments you have made, but they are not as flexible as an offset. Lenders can restrict redraw access or charge fees, and if you are using the property as an investment, pulling money out of redraw can complicate your tax deductions.
Borrowing capacity and how much you can actually borrow
Your deposit size does not determine how much you can borrow. Your income, existing debts, living expenses, and the lender's interest rate buffer do.
Lenders assess your loan application by applying a buffer of around 3% on top of the actual interest rate. This means even if the current variable rate is around 6%, they test whether you could still afford repayments if it rose to 9%. They also add your existing commitments like credit cards, car loans, and personal loans to the calculation, which reduces what you can borrow.
If your borrowing capacity falls short of what you need, there are a few ways to improve it. Paying down credit cards or closing accounts you do not use will help. Increasing your income through a pay rise, taking on extra work, or including a partner or co-borrower also makes a difference. You can estimate what you might be able to borrow using a borrowing capacity assessment before you start looking at properties.
Pre-approval and buying with confidence in Randwick
Getting home loan pre-approval before you attend auctions or make offers gives you a clear budget and shows sellers you are a serious buyer. Pre-approval is not a guarantee, but it confirms a lender is willing to lend you a specific amount based on your financial position at the time.
Pre-approval typically lasts between three and six months depending on the lender. You will need to provide payslips, tax returns if you are self-employed, bank statements, and details of any existing debts. The lender will also run a credit check, which leaves a mark on your credit file, so avoid applying with multiple lenders at once.
In Randwick, where demand around Coogee Beach, the Royal Randwick Racecourse, and the Prince of Wales Hospital precinct stays consistent, having pre-approval in place means you can move quickly when the right property comes up. Agents and sellers take buyers with finance sorted more seriously than those who still need to arrange lending after their offer is accepted.
If your circumstances change between getting pre-approval and finding a property, let your broker know straight away. A new job, a drop in income, or taking on new debt can all affect whether your pre-approval still stands when it comes time to submit a formal application.
Call one of our team or book an appointment at a time that works for you. We work with buyers across Randwick and can assess your deposit, structure your loan, and manage your application through to settlement.
Frequently Asked Questions
Can I buy property in Randwick with only a 10% deposit?
Yes, you can buy with a 10% deposit, but you will need to pay Lenders Mortgage Insurance. This premium can be added to your loan amount rather than paid upfront, which reduces the cash you need at settlement.
How much does Lenders Mortgage Insurance cost with a 10% deposit?
LMI typically costs between 1.5% and 3% of your loan amount when borrowing at 90% LVR. The exact premium depends on the lender, your loan size, and whether the property is owner-occupied or an investment.
What are genuine savings and how much do I need?
Genuine savings are funds you have held in your own account for at least three months. Most lenders require at least 5% of the purchase price to come from genuine savings when you borrow with a 10% deposit.
Do I get access to the same loan features at 90% LVR?
Most lenders offer the same features at 90% LVR as they do at 80%, including offset accounts, redraw facilities, and variable or fixed rate options. Some lenders reserve their lowest rates for borrowers with a 20% deposit.
How much do I need to budget beyond the deposit?
You need to cover stamp duty, which in Randwick can range from $40,000 to over $50,000 depending on the purchase price, plus legal fees, inspections, and loan costs. Budget an additional $3,000 to $5,000 for settlement expenses.
