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Most lenders require you to pay Lenders Mortgage Insurance (LMI) if you are borrowing more than 80% of the property value. We’ve outlined ways you can get approved for a home loan with no deposit or a low deposit.

What Is A No-deposit Home Loan?

It is a home loan where you get approved for 100% of the property value, meaning you don’t have to pay a deposit. The most common zero-deposit home loan in Australia is a guarantor home loan.

With most lenders, you will require a deposit of at least 5% for most loans; however, there are ways to avoid paying a deposit.

Use our no-deposit calculator to see which loan deposit option best meets your needs.

No Deposit Loan Calculator

    Loan details

    Purchase price
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    Your situation

    Do you own a property in Australia?
    Do your parents own a property in Australia?
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    Your income

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    • Rental income per week
    • Amount in savings
    • Amount in superannuation
    • Total credit card balance
    • Total personal loan debt
    • Total car loan debt
    • Do you have a clear credit history?
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    • Applicant 2
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    Contact a mortgage broker

    Please email me a copy of the results:
    Yes No
    Talk to one of our mortgage brokers about your situation: Yes  No  

    Based on your situation you can apply for a home loan using:

    You may also apply using:

    Not suitable for you:

    Equity in an existing property

    • Borrow against the equity in your home to buy another property.
    • Release up to 80% of the value of your home without paying lenders mortgage insurance (LMI) or up to 90% with LMI.

    A guarantor loan

    • Borrow up to 105% of the purchase price with help from your parents.
    • Avoid paying LMI.
    • Discounted interest rates are available.
    • Consolidate some minor debts including credit card debts.
    • You can limit the size of the guarantee.

    A 95% home loan

    • You can buy a property without help from your parents.
    • Some lenders allow you to add the LMI premium on top of the loan.
    • Some lenders offer competitive interest rate discounts, even on 95% loans.
    • LMI discounts may be available depending on your financial situation and the amount that you are borrowing.
    • Learn the big secrets to buying a house with no deposit in our Home Buyers Course. Sign Up Today For Free Access.

    A gift from your parents

    • You need a deposit of to buy a property. Can your parents help?
    • You will need a smaller deposit if you are eligible for first home benefits.
    • Borrow up to 95% with the remainder of your deposit coming from a gift from your parents .
    • Some lenders do not require you to have saved your deposit yourself.
    • Get the same interest rates as someone applying for a standard home loan.
    • Some lenders allow you to add the LMI premium on top of the loan.

    A personal loan as a deposit

    • Borrow up to as a personal loan towards the deposit amount.
    • Borrowing up to as a personal loan is possible for high income earners with little existing debt.
    • You will need a smaller deposit if you are eligible for first home benefits.
    • Must have some savings to make up the shortfall.

    Your superannuation as a deposit

    • You can buy an investment property in your super fund.
    • Borrow up to 80% of the property value.

    Vendor finance

    • Must have at least as a deposit.
    • You will pay a higher interest rate and fees, so this is only suitable as a last resort.
    • Great option for someone who has a bad credit history and/or trouble proving their income.

    Disclaimer

    No-Deposit Home Loan Options

    These options are available to you when you don’t have a deposit.

    105% guarantor loan

    This is the best zero-deposit home loan option available in Australia. With a guarantor home loan, a guarantor (in most cases your parents) will put up their property as security so you can borrow with no deposit.

    • You can borrow 105% of the purchase price.
    • You don’t need any savings.
    • Your parents (or other guarantor) must provide a guarantee, secured on their property.

    Do I Qualify?

    • Your guarantor must have equity in their property to cover the guarantee.
    • Your guarantor (usually your parents) typically must be working. Retired guarantors are accepted by only a few lenders.
    • Your guarantor’s property must be in Australia.

    You can learn more about this option on our guarantor mortgage page.

    Why Should I Choose A Guarantor Home Loan?

    For borrowers
    No-deposit loans have become an attractive option for many people who do not have the funds to contribute towards a deposit on a mortgage. You can borrow the full purchase amount plus the money needed for stamp duty or any other associated costs. Lenders Mortgage Insurance (LMI) is not required, saving you thousands. In many cases, the interest rates are exceptionally low.

    For Guarantors

    Guarantors have a fixed liability and can be pursued only for the guaranteed amount, making this a more secure option. The guarantee can be secured by either their property or a term deposit.

    Guarantors do not have to make the scheduled loan repayments and the guarantee can be released upon request if, at a later date, the borrower satisfies standard bank criteria and the bank agrees. Normally, this is when the borrower owes less than 80% of the value of their property.


    Use Equity As A Deposit

    If you already own a property, there are lenders who accept home equity as a deposit.

    • If you have sufficient equity, then you don’t need any savings at all
    • You can use your existing equity as a deposit by refinancing.
    • Some lenders will offer you a cash rebate to refinance.
    • We can value your property for free right now!

    Simply give us a call on 1300 889 743 or enquire online for free and we’ll let you know if you qualify.

    If you don’t qualify for either of these no-deposit home loan options, then you can check out these low-deposit options.

    Low-Deposit Home Loan Options

    If you can save at least 5% of the property value as a deposit, low-deposit home loan options are available. These options range from government schemes to gifted deposits and personal loans.

    First Home Guarantee

    The First Home Guarantee is a nationwide program to help first-home buyers purchase a property with a deposit as low as 5% without having to pay Lenders Mortgage Insurance. From 1 July 2023 – 30 June 2024, 35,000 places are available.

    • A minimum deposit of at least 5% is needed (most lenders require the deposit to have been accumulated through genuine savings).
    • Single first-home buyers earning up to $125,000 a year and couples earning up to $200,000 a year are eligible. The definition of a couple has been expanded to family members or two friends living together.
    • This scheme extends eligibility not only to single parents with at least one dependent child, but also to legal guardians, including aunts, uncles, and grandparents.
      You must intend to move into and live in the property as your principal place of residence (i.e., the scheme is for owner-occupiers).
    • The applicant must be an Australian citizen or permanent resident.

    You can read the full details of the scheme on our First Home Guarantee page.

    Gifted Deposit Home Loan

    Your parents can provide you with a lump sum as a gift with no strings attached, and you don’t have to pay them back.

    • Your parents can provide you with 5% – 15% of the purchase price as a non-refundable gift.
    • Some lenders will consider your loan even if you didn’t save the deposit yourself.
    • About 60% of first-home buyers receive help from their parents.

    You can read more about this option on our or gifted deposit page.

    Personal Loan As A Deposit

    You could use a personal loan as a home deposit; however many lenders do not favour this option, as you would then need to keep up with repayments for both the personal loan and home loan.

    • You need a minimum deposit of 5% of the property value.
    • A high income to afford both repayments.
    • You can borrow up to 95% of the purchase price plus the personal loan.
    • Little existing debt (car loans, high credit-card balances, etc).
    • You must have a clear credit history.

    This isn’t suitable for all people. We recommend that you speak with your parents about a guarantor loan before you consider this option.

    Some lenders will allow a borrowed deposit and do not require genuine savings but you may need some funds of your own to cover stamp duty and other expenses. If you do not have any savings of your own then you are unlikely to be approved.

    You can read more on our page.

    Using Super To Buy A House

    If you have over $300,000 in superannuation and wish to buy a property for investment purposes, you can set up a self-managed superannuation fund (SMSF) to buy a property. Here’s how it works:

    • SMSF Loan: You can borrow up to 80% of the purchase price using your SMSF.
    • Eligibility: You cannot use your superannuation to buy a property in your own name; it must be in your SMSF’s name.
    • Investment Property: You can only buy an investment or commercial property, not a property to live in.

    Discover if you’re eligible to buy an investment property using an SMSF. Keep in mind that this is a complex strategy that requires financial advice before you begin.

    Alternatively, you can use the First Home Super Saver Scheme (FHSSS) to save for your first home.
    Here’s how it works:

    • Contributions: Eligible individuals can contribute up to $15,000 per year and $50,000 in total to their super fund for this purpose.
    • Tax Concessions: The contributions and earnings in your super fund are taxed at a lower rate, helping your savings grow faster.
    • Withdrawal: Apply at the Australian Taxation Office to withdraw these voluntary contributions, along with associated earnings, to help buy your first home. This process can take up to 20 business days.

    The FHSSS offers tax concessions and a tax-effective way to save for a home deposit, but it’s important to consider carefully the eligibility criteria, contribution limits, and potential tax implications.

    Apply For A Shared-Equity Scheme

    A shared-equity scheme or arrangement is when an equity partner acts as both the lender and investor in a property. The partner contributes a portion of the purchase price of the property in exchange for an interest in the property. For most of these shared-equity schemes, a deposit of at least 5% of the property price is required.

    There are different types of shared-equity schemes and arrangements available in Australia.

    • Under the nationwide Help To Buy scheme, the government contributes 40% for new builds and 30% for existing properties.
    • There are also state and territory-wide schemes available.

    Pros And Cons Of No-Deposit Home Loans

    This kind of loan has various pros and cons, which can depend on individual financial circumstances, the broader economic environment, and the specific terms and conditions of the loan.

    Pros:

    • Accessibility: Buyers can enter the property market without having to save a substantial deposit, making homeownership accessible to those who may not have much in savings.
    • Faster home ownership: Without the need to save for a deposit, buyers may be able to purchase a home sooner.
    • Investment opportunities: Some may use this type of loan to invest in property earlier and potentially benefit from property appreciation.
    • Potential for government assistance: There may be government grants or incentives available to first-time buyers that can be combined with no-deposit loans.

    Cons:

    • Stricter eligibility requirements: Lenders often require a strong credit history, stable employment, and evidence of financial responsibility.
    • Limited choices: Not all lenders offer no-deposit home loans, limiting the available options.
    • Higher risk of negative equity: If property values decrease, you might owe more on the mortgage than the property is worth, since you started with no equity.
    • Potential for over-borrowing: Without a deposit to limit the size of the loan, there might be a temptation to borrow more than is financially comfortable, leading to potential financial strain in the future.

    How To Get Approved For A Home Loan Without A Deposit

    The six leading criteria to qualify for a no-deposit home loan

    What Are The Lending Criteria For No-Deposit Loan?

    Here’s what lenders look at when assessing your no-deposit home loan application:

    • Credit history: You must have a perfect credit history with Equifax. No Australian lenders will make an exception to this policy if LMI approval is required.
    • Repayment history: You must be paying all of your current debts, such as credit cards, personal loans and rent on time.
    • Location restrictions: You must be buying in a major town, capital city or regional centre. One of our lenders is willing to consider anywhere in Australia but most lenders are strict about the location.
    • Property type: You must be buying a standard type of property, such as a house, townhouse, unit or vacant land. As a general rule, unusual or unique properties are not acceptable.
    • Stable employment: Your employment situation must be stable and ongoing.
    • Income: Your income must be high enough that you can easily service the loan. You cannot borrow to your limit with a high Loan-to-Value Ratio (LVR) mortgage.
    • Profession: Professionals such as accountants, lawyers, doctors, vets, nurses, government employees and teachers are highly sought after by lenders because they are well known to be a lower risk than people in other professions. You don’t need to be a professional to get approved but it helps.

    Not sure whether you will be approved for a 100% home loan?

    Call us on 1300 889 743 or enquire online for free today to find out!


    FAQs


    How Do I Apply For A No-Deposit Home Loan?

    As your specialist no-deposit mortgage broker, we are here to help!

    Contact us at 1300 889 743 or enquire online and we can then discuss your situation with you to see if no-deposit finance with the help of a guarantor is suitable for you.

    We can also help you prepare to apply for a home loan in the future if you don’t qualify for a loan at the moment.

    If you’re eligible, then we can usually organise an approval over the phone with one of the lenders on our panel.

    Still have questions? Feel free to comment below and we’ll get back to you as soon as possible.


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