Do I qualify for a 95% home loan?

How can we help if you fall outside standard 95% lending criteria?

If you’re a little outside of the box, some lenders can still help:

Getting approved for these policy exceptions is all about building a strong case with the right lender.

Call us on 1300 889 743 or fill in our free assessment form and one of our mortgage brokers can let you know if you qualify for a 95% home loan.

How big of a deposit do I need?

As a general rule, first home buyers will need to contribute around 5% to 10% of the purchase price as a deposit.

The actual amount varies depending on the various first home owners grants and stamp duty concessions available in each state.

Second home buyers and investors will usually need a 10% deposit, half of which will cover the deposit on the property and the other half will cover stamp duty, conveyancing fees and other minor costs.

These figures are a rough guide only, please refer to your mortgage broker or conveyancer for exact figures.

You can buy a home with no deposit if your parents guarantee your loan.

The secret to borrowing a little bit more than 95%…

This option is only viable for people with a high income.

One of our lenders allows you to apply for an additional loan facility with a limit of up to $20,000 along with your 95% home loan!

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 home loan.

The catch is that you must have 5% of the purchase price saved in a bank account to pay your deposit and qualify for the home loan.

The interest rate is the same as the home loan, however you are required to pay off the loan quickly so the repayments are relatively high.

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 don’t have the funds to cover the stamp duty and other purchasing costs.

Not all lenders offer 95% loans

Australian lenders consider all loans over 80% of the purchase price to be a high risk. Because of this, they insure these loans with Lenders Mortgage Insurance (LMI).

LMI providers have their own lending guidelines that are stricter than those used by the banks so it’s harder to get approved.

In addition to this, lenders only have so much money to lend out. They want to maximise their profit while keeping risks under control. 95% home loans are a high risk so most of their available funds are allocated to less risky loans.

In short, lenders pick and choose who they approve for 95% loans.

Are you eligible for a 95% loan?

Call us on 1300 889 743 or complete our free assessment form to find out!

Can I borrow more than $1,000,000?

Did you know that most lenders will only approve a 95% mortgage up to $700,000 or $800,000?

Some less conservative lenders will allow you to borrow up to $1,000,000.

However, the lender’s mortgage insurers have restrictions which will stop you from borrowing over $1,000,000.

One of our lenders has a special agreement with their insurer and can consider a 95% loan up to $2,500,000 for people who are in an exceptionally strong financial position.

For loans up to $1,000,000, LMI can usually be capitalised (added to the loan amount). Anything above that can’t be capitalised so, in effect, you’re borrowing approximately 91.5% after your LMI premium has been deducted from the loan.

How much is LMI?

LMI is relatively costly for 95% loans.

The cost of LMI varies according to:

  • Mortgage insurer: there are only a handful of mortgage insurers in Australia and they all have slightly different premiums
  • The loan amount: LMI is calculated on a tiered scale, the higher the loan amount, the higher the premium
  • The deposit amount: the lower the deposit, the greater the LMI
  • Type of savings: an applicant that contributes genuine savings (or has a satisfactory 6-month rental history) will incur a lower LMI premium than an applicant who has non-genuine savings

You can use our Lenders Mortgage Insurance Calculator to get an estimation of how much you could save by avoiding mortgage insurance.

Are there any LMI discounts or LMI waivers?

  • Discounted LMI premiums: A few lenders are starting to offer first home buyers a discount on their LMI premium.
  • Insurance duty for NSW purchase: An LMI policy over the property in NSW is exempt from insurance duty provided that the premium for that policy was paid on or after 1st July 2017.
  • Certain professions: Medical professionals, Accountants, Legal professionals, Professional Athletes may all qualify for the No LMI loans when borrowing up to 90% of the property purchase price.
  • 15% Deposit No LMI: If a single or couple’s combined taxable income is around $180,000, you may qualify for a no LMI loan if you have a deposit of at least 15% saved.
  • Guarantor loans: By using your parent’s property to cover the 20% deposit, you may be able to borrow 100% of the property purchase price + associated property costs and avoid paying any LMI.

Please call us on 1300 889 743 or complete our free online assessment form and we’ll provide a tailed solution for you.

Interest Rate Discounts

Get a 1.40% rate discount!

Did you know that one of our lenders has a special 95% plus LMI home loan available for low risk borrowers?

  • One lender currently has a 1.40% discount as a special offer for loans over $500,000, and 1.30% for loans over $250,000 up to $500,000!
  • You must be buying a property (refinances are not accepted).
  • You have at least 5% in genuine savings (some exceptions are made for renters).
  • You’re borrowing no more than 95% of the property value plus LMI.
  • You must have been in your job for at least 6 months, with 24 months in the same line of work.
  • You’ve got a perfect credit history.
  • You’re borrowing more than $250,000 and less than $1,000,000.

Give us a call on 1300 889 743 or fill in our free assessment form and we’ll help you to apply for a home loan with the lowest possible interest rate!

How can I avoid being overcharged?

When the banks seek funding on the international money markets, they pay a higher interest rate if their home loans tend to be a high percentage of the property value.

As a result of this, banks try to balance their home loan portfolio by charging a higher interest rate for 95% home loans.

Not every lender has this same approach! Some lenders have pricing that’s just based on the loan size.

By applying with one of these lenders you can get a fantastic interest rate.

The key is to know which banks are pricing aggressively to get more market share! As a mortgage broker, this is where we can help you to shop around and choose the best home loan.

Which lenders are the most competitive?

We usually work out which lenders can approve your home loan then work out what the best loans on offer from those lenders are.

There is no point shopping around for the best interest rate only to get your loan declined by the lender you choose!

If you make many applications, this will damage your credit score, which in turn will reduce your chances with other lenders. So don’t just apply with several lenders to see who approves your loan.

If you’d like to know which bank or lender is most suitable for your 95/5 loan then please call us on 1300 889 743 or fill in our free assessment form.


Will my application be credit scored?

Yes, almost all lenders use credit scoring to assess loans at 95% LVR. If your loan fails the credit score of the lender then it’s unlikely to be approved.

Use our Credit Score Calculator to find out if this will be a problem for your loan or not.

Are non-bank lenders better for 95% loans?

The major lenders tend to be very conservative with their lending policies for 95% home loans. The main reason that we choose a non-bank lender for our 95% borrowers is because they can’t get approved by a bank.

There isn’t normally a large difference in the interest rates offered by banks as opposed to non-bank lenders.

In fact, a lender of ours will occasionally come out with a special offer that’s way ahead of the competition!

Which loan features are available?

All standard loan features are available, including:

  • 100% offset
  • Fixed interest rates
  • Basic loans
  • Professional packages
  • Line of credits aren’t normally available
  • Restrictions apply to interest only loans

Talk to an expert mortgage broker

Here at Home Loan Experts, we have mortgage brokers that specialise in 95% home loans.

Please fill in our free assessment form or call us on 1300 889 743 to discuss your situation with an expert to land the right home loan for you.

  • New discounts are now available up to 1.5% off the Bank Standard Variable Rate. Most borrowers are eligible for a 1.3% to 1.4% discount.

    This will depend on your loan size and if you have genuine savings or not.

  • Mountie

    I was planning to get a home loan but I don’t have significant savings of my own. Is there any chance that I can borrow 95% for a home loan, like by paying some other additional fees or something?

  • Hi Mountie,

    The lenders that offer 95% home loans will require you to have a clean credit history, stable employment, good income and at least a 5% deposit, which are genuine savings. Aside from this, the property you’re buying must not be very high risk such as a bushfire prone property in a rural area. Please call us on 1300 889 743 to discuss your situation in detail with one of our high LVR home loan specialists.

  • AnthonyManuel Dos Santos

    I was planning in getting a home loan. Although my tax return says that i only get 36000 a year. I got a company and i pay myself around $1200 a week but cant get a loan. I got the 5 percent of deposit. I would be looking to buy a house about $380000.

    Cheers Anthony

  • Hi Anthony,

    Self employed is always more complex, we’d need to see your returns as in some cases we can add back depreciation, one off expenses and any additional super you have paid. If there were no add backs then lenders would see that your salary is higher than your past company earnings so would not use your current income as it may not be sustainable. In the past some people have paid themselves an inflated salary so lenders are wary.

    You can use our self employed income calculator to see what lenders would assess or you can just flick your tax returns to one of our brokers and we can do an assessment of this for you.

    The good news is that you may have more options than you think. If you haven’t done your 2016 tax return and you are paying yourself $1,200 per week now then you can lodge your 2016 return showing your current income of $62,400. Some of our lenders just use the most recent year in their assessment rather than using your previous year. If you’d like our help then fill in our free assessment form here

  • AnthonyManuel Dos Santos

    Hi the tax return i have is 2016 but only shows 36000 although I think I got around 23000 in depreciation.
    Cheers Anthony

  • Ok we could likely assess your income as $60,000 with some lenders. It does depend on the type of business and what assets the depreciation come from.

  • AnthonyManuel Dos Santos

    Would you be able to contact me? 0466639234

  • Bianca460

    I’m a certified veterinarian and I would like to borrow 95% and avoid LMI at all costs. Can you help with this?

  • Hi Bianca460,

    To qualify for waived LMI, veterinarians are usually allowed to borrow up to 90% LVR provided that you can meet standard lender requirements such as having membership of an appropriate industrial organisation. Please call us on 1300 889 743 to discuss this with an expert mortgage broker who specialises in no LMI home loans.

  • Milford

    Does this info hold true for 95% LVR investment loans as well or is this just for home loans?

  • The policies regarding 95% investment loans are similar to this but there are some specific differences, which we have expanded upon on a separate page. Please check out the 95% investment loans page for the full details:

  • mike

    What are the main methods that banks use to calculate serviceability?

  • Lenders generally use Net Surplus Ratio (NSR), Debt Servicing Ratio (DSR), and
    Surplus / Uncommitted Monthly Income (UMI) to calculate your serviceability. They differ in how they weigh up your income and expenses, and the way they display the result. The DSR method was commonly used in the past however is too simple and tends to be inaccurate for property investors or for people earning over $200,000 or under $30,000.

  • Kathy Oxley Walklate

    I have genuine savings 5% plus pay rent want to buy a hobby farm of around 5 acres what would my chances be

  • Hi Kathy,
    We actually have a page on hobby farms here you might find helpful
    Yes it’s likely you would qualify for a 95% loan. It may be 95% + LMI or 95% including LMI, we’d need to know more about the property to be sure. If it’s 95% including LMI then you may need a slightly larger deposit to cover stamp duty and LMI.
    Please contact us if you’d like us to work out which lenders can help you

  • Kathy Oxley Walklate

    I just found out for 5 acres around me is $1.2 – $1.5 so i guess that puts us out of the property market
    We have paid $400 a week rent for 9 years and have genuine savings of $25,000.00 with exelllent credit ratings no credit cards but have two personal loans .
    Would it help if we had a first home buyer on contract ? Your thoughts please

  • Hi Kathy,
    Adding a first home buyer to the contract wouldn’t assist because if you aren’t first home buyers then they would not receive any benefits (in most cases).
    It’s best to consider a guarantor loan

  • Kathy Oxley Walklate

    I have already been told by a bank that because my mother doesn’t own the land her home is on (retirement home) we can not use her equity even though she had a mortgage on the house and has paid it off also have been told i can not use my brothers equity either
    Oh well thank you for your time in answering my questions

  • No worries best of luck Kathy.

  • Adeeb

    Hi my yearly income is net $85000 and i have $25000 loan on credit card and personal loan , i have two permanent job can i get 5% deposit home loan

  • Hi Adeeb
    Please use this calculator and it will let you know your borrowing power. A rental history or 5% genuine savings would be needed for you to get approved due to the amount of debt you have.