Get a home loan with a 5% deposit.
No deposit with a guarantor!

What is a guarantor loan?

Guarantor loans are the only way to borrow 100% of the purchase price plus the costs of completing the purchase. These costs include stamp duty, home loan fees and legal costs of buying a home.

Your guarantor will provide a guarantee for your home loan which is secured on their property. In most cases, the guarantor will be your parents.

The idea of this type of loan is to help you to get your foot into the property market.

Guarantor loans have become very popular in recent years as they cost less than standard home loans and some lenders now allow you to limit the size of the guarantee.

How can I get a home loan with just a 5% deposit?

Generally, you’ll need:

• A clear credit history: This means payment of 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: You must have been in your current job for at least 6 to 12 months (there are exceptions to this policy).
• A good income: This is to meet banks’ stricter assessment of your ability to repay a 95% mortgage.
• Reasonable asset position: Lenders want to see that you have a good asset position relative to your age and income.
• Genuine savings: Almost all lenders require you to prove that you have saved 5% of the purchase price.
• Minimal debts: People with many credit cards and personal loans are generally not accepted.
• Location / property type: Many lenders may be hesitant to approve loans for properties in smaller towns, high rise units in the CBD or unusual properties.

How can I borrow more than 95%

Some lenders will allow you to capitalise (add) your LMI premium on top of your loan so, in essence, you’re borrowing as much as 100% when the premium is included.

For a 95% home loan, LMI is about 3% of the property value so the benefit of capitalising is that you don’t have to pay this premium upfront and can keep more money in your pocket.