85 percent home loan

85% Home Loans

Many home buyers and investors have saved a significant deposit or have help from their parents. If you are in this position then maybe you can qualify for an 85% home loan. Many of our customers originally contact us for a 90% home loan, however are able to increase their deposit size a little to enable them to qualify for a better discount.

Unlike 90% or 95% loans the qualifying criteria are less strict and the Lenders Mortgage Insurance is significantly cheaper. In some cases the LMI premium can even be waived!

IMPORTANT: 85% mortgages with no LMI are available!

Two of our lenders currently have a special where they are offering loans for up to 85% of the property value, up to $1.5 million dollars with waived LMI! This is an unbelievable discount, saving you thousands of dollars in mortgage insurance!

You can read the eligibility criteria on our no LMI page, call us on 1300 889 743 or enquire online for more information.

What are the tips for borrowing 85%?

Most people who borrow over 80% of the property value know the importance of shopping around to get a good deal. What is it you should be looking for when comparing mortgages?

  • Do you meet the lenders credit criteria? In particular does the lender have a genuine savings policy (read below for more info).
  • Have you compared the Lenders Mortgage Insurance? One of our lenders will waive the LMI for loans up to 85% of the property value. If you qualify for this offer then you can save thousands!
  • Will your lender allow you to capitalise the LMI premium?
  • In addition to this don’t forget to compare all other aspects of the loan such as the interest rate, repayment terms, features and ask about any hidden fees or charges.

Do I qualify for an 85% home loan?

These days banks are becoming more particular about the customers that they lend to. So what are Australian lenders looking for?

  • Clear credit history: This means that your credit file has no blemishes whatsoever and that you have paid all of your bills such as rent, credit cards, personal loans and other debts on time every time for the last 6 months.
  • Stable employment: In most cases you must have been in your current job for 6 months or more. Sometimes an exception can be made to this policy.
  • An excellent income: Lenders are more conservative when assessing your ability to repay any loan over 80% of the property value.
  • Strong asset position: Lenders want to see that you have a good asset position relative to your age & income.
  • Genuine savings: Many lenders require you to have saved 5% of the purchase price. However not every lender has this requirement1 Some will allow you to borrow with no genuine savings!

If you don’t fit the box then please enquire online to speak to one of our mortgage brokers that specialises in loans over 80% of the property value.

Do I need genuine savings?

Some lenders require evidence that you have saved 5% of the purchase price in either a savings account, shares or a term deposit. However, other lenders can consider a gift from your parents or a lump sum deposit as evidence of savings! This means that in most cases, you can borrow 85% with no genuine savings. Speak to our mortgage brokers on 1300 889 743 or enquire online and a member of our expert team will help you get the best package around!

Compare the LMI, not just the rate

Did you know that each lender has different LMI premium rates? Often two loans with the same rate will actually have very different LMI premiums and in some cases the difference can be thousands of dollars.

We recommend that you use our LMI premium calculator to compare lenders and find out how much you are likely to pay in LMI.

Did you know there is also discounted LMI for very low risk borrowers? The criteria for this type of loan is very strict, however if you qualify you may end up paying only $700 in LMI! You can find out more on our discounted LMI page.

Many people who apply for an 85% loan can qualify for a special LMI discount or to pay no LMI at all! These discounts are only available from a select few lenders that are in good funding positions.

Which lenders are most competitive?

Each lender’s pricing changes on a regular basis. We recommend that you call us or enquire online and one of our mortgage brokers can help you to compare the different options available.

How big of a deposit do I need?

As a general rule first home buyers will need around 15% of the purchase price in funds to be able to make up the shortfall between the loan and the purchase price. Second home buyers and investors will generally need 19% of the purchase price. This amount can vary depending on the first home benefits and stamp duty rates applicable for your state.

Talk to an specialist mortgage broker

Our mortgage brokers are extensively trained in comparing loans over 80% of the property value. Did you know that most mortgage brokers are not even aware that each lender charges different LMI premiums and even fewer still actually compare LMI as part of the loan selection process.

Please call us or enquire online and one of our mortgage brokers can assist you to get pre-approved for an 85% home loan.