5% Deposit Home Loans.
Which bank will approve your loan?

How do I qualify for a 5% deposit home loan?

• A good income: Lenders tend to be quite strict when assessing your means of paying off a 5% deposit home loan, otherwise known as your ‘serviceability ratio’.
• Stable employment history: Although there are exceptions, this usually means that you’ve been working in the same job for the past 6 to 12 months.
• A clear credit history: Your credit file must have minimal credit enquiries and be free of defaults. As a general rule, credit cards, rent and bills like utilities and mobile plans need to have been paid on time for the past 6 months.
• Strong asset position: Lenders will assess your income to asset position relative to your age. It’s assumed, for example, that if you’ve been working full time for a few years that you’ll have a car and a decent amount of savings relative to your income.
• Little to no existing debt: Having more than one credit card and/or personal loans is a red flag for most lenders.
• Proof of 5% in genuine savings: This is usually in the form of consistent deposits into a savings account over a period of 3 months. There are some exceptions to this though.

Did you know that there’s a 1.10% rate discount on offer?

One of our lenders currently has a 1.10% discount as a special offer for loans over $500,000, and 1.00% for loans over $250,000 up to $500,000. To be eligible:

• Your loan must be for no more than 95% of the property value plus LMI.
• The loan must be for more than $250,000 and less than $1,000,000.
• You must have at least 5% in genuine savings (some exceptions are made for renters).
• You must be buying a property (refinances aren’t accepted).
• You must have been in your job for at least 6 months, with 24 months in the same line of work.
• You must have a clean credit history.

What if I have less than a 5% deposit?

One of our lenders allows you to apply for an additional loan facility with a limit of up to $20,000 along with your 5% deposit home loan!

The catch is that you must have at least 5% of the purchase price saved in a bank account to pay your deposit and qualify for the mortgage. You just have to have the money saved; you don’t have to put it down as your deposit.

The funds from this additional loan can be used at settlement for costs such as stamp duty and conveyancing fees just like the funds from the mortgage.

The interest rate is the same as the home loan but you’re required to pay off the loan quickly so the repayments are relatively high. Therefore, this option is only viable for people with a high income.

With the additional loan and capitalised mortgage insurance, the total loan is often over 100% of the purchase price!

This is a great option for second home buyers who have 5% in genuine savings, yet do not have the funds to cover the stamp duty and other purchasing costs.