You don’t have to worry about saving a 20% deposit. You can qualify for a home loan with a 10% deposit.
LVR means Loan-to-Value ratio, which is the portion of the value of the property you’re buying that you can borrow, expressed as a percentage.
With a 90% LVR home loan, you can:
- Get onto the property ladder faster to build equity
- Buy your dream home or investment property sooner, as it’s easier to save a 10% deposit
- Use the equity from your existing property as a deposit
- Still get home loan features like offset and redraw accounts, and extra repayments
- Some lenders even provide rate discounts of up to 1.80%.
Can I Get A Special Rate Discount?
As mentioned above, we know lenders that can offer discounts of up to 1.80%. You can qualify if you meet these requirements:
- Borrow more than $500,000.
- Purchases and refinancing are both eligible.
- You’ve saved a 5% deposit yourself or have a history of paying rent on time; rental history can be accepted in place of genuine savings.
- Borrow no more than 90% of the property value plus Lenders Mortgage Insurance (up to 95%).
- Be in your current job for at least three months, with 24 months in the same line of work.
- Have a perfect credit history.
Please call us on 1300 889 743 or enquire online to talk to one of our mortgage brokers and find out if you’re eligible for this offer.
Pay Less In LMI
Lenders Mortgage Insurance is usually paid when you’re borrowing more than 80% of the property value. Use our LMI calculator to find out how much you need to pay, based on how much you’re borrowing, where you’re buying and other factors.
Saving just enough to pay a deposit of at least 10%, can save you a lot in LMI.
For example, if you had a $72,000 deposit (in genuine savings) to buy a property worth $800,000, your LVR would be 91%. For a $728,000 loan at 91% LVR, you could be paying almost $29,000 in LMI.
But if you came up with just $8000 more for your deposit, you could reduce your LMI premium to just under $20,000 and save over $9,000 in LMI.
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Certain professionals can qualify without having to pay LMI:
- Medical professionals
- Accounting professionals
- Legal professionals
Read our 90% No LMI Home Loan page for more information.
Do I Need Genuine Savings?
This is the most important factor to consider when selecting a lender. Most lenders in Australia require you to have 5% of the deposit saved in a bank account over 3-6 months. However, some lenders will allow you to borrow 90% with no genuine savings.
If you’ve received a gift, inheritance or first home owners grant, or even taken out a personal loan (in limited cases) to pay your deposit, you may be eligible with no evidence of genuine savings. The best news is that the rates would be the same as for a regular loan.
Can I Get A 90% Home Loan Of Over $1 Million?
Yes, you can.
We know lenders that can let you borrow more than $1 million. We even have a lender that can go up to $2.5 million (but the lending criteria is strict).
If you’re borrowing more than $1 million, LMI can be expensive. Here are our top tips to reduce LMI when you borrow more than $1 million:
Our Expert Brokers’ Tips To Reduce LMI
- The best option is to have a high deposit. The higher the deposit/contribution, the lower the LMI.
- The right lender can minimise LMI, since each lender has its own provider. For a loan size of $1 million at 90% LVR, the cost can vary from about $20,000 to $30,000.
- Another way to avoid LMI would be to use a guarantor. Note that in most cases only immediate family members can be guarantors. A guarantor can be removed once the loan is paid down to about 80% LVR.
- Buyers can use savings and a guarantor as well (10% of own savings, plus a guarantor to avoid LMI and minimise the guarantee amount).
- There are lenders that can offer up to 90% without LMI for metro properties. There are specialist options, so the rate can be a tad pricey and the assessment is case by case.
For more on how to avoid LMI, go here.
How Do I Apply?
Get experienced mortgage brokers, like our Home Loan Experts, to do the legwork for you.
Firstly, we work out which lenders will approve you for a loan. We do this by asking you to complete a simple online application form. Then, we’ll contact you to understand your situation better. After this, you’ll send us your payslips, bank statements and other documents most lenders require.
Then, we look at your situation the way the lenders do and work out if your deposit (usually 10-15%) is sufficient to pay the stamp duty, LMI and other costs associated with the purchase.
Once we know which lenders we can expect to approve your loan, we can compare the interest rates, fees and LMI premiums they charge to work out which loan is the cheapest and most suitable for you. Although the rates on professional-package 90% home loans are frequently similar across most lenders, there are often significant differences in their fixed rates, hidden fees and LMI premiums.
Finally, we’ll recommend a shortlist of up to five lenders you can choose from and select the appropriate loan, be it a pro-pack, basic loan, line of credit or fixed-rate product.
Call us on 1300 889 743 or enquire online if you’d like one of our expert mortgage brokers to do the shopping around for you.