How 100% home loans work

Rates and fees last updated on

100% home loans comparison100% home loans are a thing of the past. Here are some other ways to buy a home with no deposit.

Unsecured 100% home loans aren't around any more. But there are still low deposit home loans which allow you to borrow with a 5% deposit.

This guide will tell you how to find loans with low deposits or guarantor loans with no deposit at all.

Looking for a low-deposit loan? Compare loans with 90-95% max LVR that allow guarantors

Rates last updated August 22nd, 2017
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Loan purpose
Offset account
Loan type
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.99%
3.99%
$0
$0 p.a.
110%
Discounted rate available with family pledge loans. Family pledge loans require no LMI and no deposit. NSW, Qld and ACT only.
3.69%
4.86%
$0
$395 p.a.
90%
A special rate for first home buyers buying residential property and borrowing over $150K. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.99%
4.04%
$600
$0 p.a.
90%
A discounted interest rate home loan with no monthly fees.
4.04%
5.05%
$600
$8 monthly ($96 p.a.)
95%
Fix in a competitive rate for three years. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.98%
5.13%
$600
$8 monthly ($96 p.a.)
95%
A fixed rate home loan with additional repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.
4.03%
5.08%
$600
$10 monthly ($120 p.a.)
95%
Get a 2-year fixed rate with flexible repayment options to help you save.
3.99%
4.98%
$0
$395 p.a.
95%
A discounted package rate for owner occupiers with the ability to package a Qantas rewards earning Amplify credit card. $1,500 cashback available for refinancers. Conditions apply.
3.99%
4.99%
$0
$395 p.a.
95%
A package home loan with fee free extra repayments available during the fixed term.
4.75%
5.05%
$0
$299 p.a.
95%
A fully featured home loan with an offset account and discounts available.
3.79%
5.26%
$600
$0 p.a.
95%
Short term fixed rate home loan with no ongoing fees with an interest only repayment option.
4.19%
4.83%
$0
$395 p.a.
95%
You can save on a host of Westpac products by packaging your 5-year fixed rate home loan.
5.55%
5.71%
$990
$10 monthly ($120 p.a.)
95%
Enjoy a competitive interest rate, make fee free extra repayments and a redraw facility.
4.45%
4.85%
$0
$395 p.a.
95%
Pay no application fee with 100% offset account with redraw facility and borrow up to 95% LVR.
4.62%
4.67%
$500
$0 p.a.
95%
Ideal for first home owners or anyone who wants a no-frills, basic variable rate home loan.
3.80%
3.81%
$0
$0 p.a.
95%
A no frills loan with a competitive rate and a maximum LVR of 95%.
5.24%
5.38%
$600
$8 monthly ($96 p.a.)
95%
The Westpac Rocket Repay Home Loan lets borrowers to own their home sooner with a 100% offset to save on interest.
4.70%
5.09%
$0
$395 p.a.
95%
A package home loan with discounted interest rate.

Compare up to 4 providers

What is a 100% home loan anyway?

Normal deposits are usually around 20% of a property's value. With a 100% home loan you could borrow a higher percentage of the property value, making it easier for you to own your own home without spending the time to save a 20% deposit.

What's the catch? You'll need a guarantor. A guarantor is a close family member who offers their own property as security if you default on your loan.

Monetary gifts from your parents or other family members can help you increase your deposit, but it’s important to note that most lenders today expect at least 5% of the property value through genuine savings.

Features of a 100% home loan

  • Linked with a guarantor. The only true no-deposit home loans left in the market are guarantor home loans. Having a guarantor is not a decision that should be taken lightly. If the borrower defaults on the home loan, then the mark appears on both the borrower and guarantor’s credit history, not to mention that it becomes the guarantor’s responsibility to pay back the default. Because of this, it’s important that you have a very close and trusting relationship with your guarantor.
  • Maximum LVR. While the vast majority of home loans cap the amount you can borrow at 95% of the property value, guarantor loans can allow you to borrow up to 100% - 120% of the property value as your loan amount. Some financial providers cap this loan amount, for example at $1,000,000.
  • Offset accounts. Some 100% home loans offer you the option of an offset account. This is where a transaction account is opened up with your home loan and the two are linked together. The money in your transaction account will be offset daily against your home loan, helping you reduce the end balance you have to pay.
  • Additional repayments and/or general repayment flexibility. Guarantor home loans typically allow you to make additional repayments when you can to help you reduce your loan and avoid paying interest. There are also generally choices for flexible repayment options. This also allows you to release your guarantor earlier. Most lenders will allow your guarantor to be released once you've built up equity through regular repayments.
  • Redraw facilities. 100% home loans often have a redraw facility. This means you can redraw repayments that you have already made when you need the money the most.

Are there any risks with 100% home loans?

If your parents or family members go guarantor on your loan, you also have to consider that they’re responsible for keeping up your repayments in the event that you cannot. You'll also need to pay all the normal application fees up front.

And it’s essential to consider if you will be able to afford a 100% home loan in the long run. Although it might give you instant access to funds for your home, you are still required to pay the loan and interest off accordingly.

Can I get a no deposit home loan with no guarantor?

There's a reason why most homebuyers use a parent or close family member as a guarantor for a no deposit home loan. Most lenders won't give you a loan unless you have one. There are a few other options, but they can be quite restrictive or specific.

But you could get a loan without a guarantor by:

  • Using equity in another property you own
  • Purchasing a property through a self-managed super fund (but only for investment purposes)
  • Using a personal loan as a deposit (though this is difficult and may involve high interest rates)

For most borrowers, using a guarantor is the way to go.

Learn more about no deposit home loans in our full guide

How do I compare no deposit home loans?

  • Fees. As with all home loans, 100% guarantor home loans do have fees and charges. Some are upfront and some are on a monthly and annual basis. It’s important to compare the fees and charges associated with the loan before deciding which one is right for you.
  • Interest rates. It’s also very important to compare the interest rate. A lower rate could allow you to make extra repayments and release your guarantor sooner.
  • Flexibility. A flexible home loan is a good home loan. This may be in terms of flexibility in your repayments, the opportunity to redraw and any other flexibility the loan allows for you. Look at your options and go with a home loan that provides you with the most wiggle room on the things that matter to you.
  • Restrictions. Some home loans will also have restrictions in regards to making additional repayments, redrawing etc. Try and select an account that isn’t restrictive and gives you some freedom.

If you decide a 100% home loan with a guarantor isn't the right fit for you, a low deposit loan might be a great way to get you into your first home sooner.

Marc Terrano

A passionate publisher who loves to tell a story. Learning and teaching personal finance is his main lot at finder.com.au. Talk to him to find out more about home loans.

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10 Responses

  1. Default Gravatar
    RathanavearyOctober 30, 2016

    I would like to get the !00% home loan information ASAP
    Thank you.

    • Staff
      MayOctober 31, 2016Staff

      Hi Rathanaveary,

      Thank you for contacting finder.com.au we are a financial comparison website and general information service we are not mortgage specialists so can only offer general advice.

      There are still lenders that may offer 100% of the purchase price of a property, provided you will have a guarantor, which lowers your risk as a borrower. You can read further on this page on how a home loan with guarantor works.

      Though it may also be best to reach out to a mortgage broker to discuss the options available for your specific situation.

      Hope this helps.

      Cheers,
      May

  2. Default Gravatar
    gavinFebruary 24, 2016

    Can I get a home loan for 175000 without a deposit

    • Staff
      BelindaFebruary 25, 2016Staff

      Hi Gavin,

      Thanks for reaching out.

      Your ability to qualify for a low deposit home loan will depend on the lender’s eligibility criteria, your income and assets, your credit history and any existing debt or liabilities that you have.

      Above on this page you can compare a range of low deposit home loans with 95% loan-to-value (LVR) ratio to see if there’s one that matches your borrowing needs.

      Alternatively, if you don’t have a deposit then you may want to consider opting for a guarantor home loan to increase your borrowing power. Keep in mind that if you borrow less than 80% LVR for a full documentation loan, you’ll need to pay lender’s mortgage insurance (LMI).

      Thanks,
      Belinda

  3. Default Gravatar
    GTDecember 19, 2015

    I have a fully paid property in overseas. Is there any possibility that I use my overseas property as a collateral to obtain 100% loan for purchasing a property in Australia?

    Many thanks in advance.

    • Staff
      MarcDecember 21, 2015Staff

      Hi GT,
      thanks for the question.

      Generally, Australian lenders will require Australian property as security, as this enables them to be able to sell the property off in the event that a borrower defaults on their loan.

      I hope this helps,
      Marc.

  4. Default Gravatar
    ElizabethDecember 13, 2015

    I would like to buy a home. I am gainfully employed by the NSW Govt have held my position for 22 years.

    I have no guarantor or deposit to buy a home I earn up to 85K per year. Am I able to get 105 home loan, I am so sick of paying rent.

    Thanks Liz

    • Staff
      MarcDecember 14, 2015Staff

      Hi Liz,
      thanks for the question!

      Unfortunately, now after the global financial crisis, lenders in Australia will not lend out more than 95% of a property’s value without a guarantor. This is because loans above 95% are considered to be of a much higher risk than regular loans. You might want to consult a financial advisor to help you get on the path to saving a deposit.

      Sorry I couldn’t be of more help,
      Marc.

  5. Default Gravatar
    carolJuly 3, 2015

    can I get a loan for 100,000 with no deposit from somewhere

    • Staff
      BelindaJuly 6, 2015Staff

      Hi Carol,

      Thanks for your enquiry.

      Some lenders will allow you to borrow 100% of the property price, however this can only be achieved through a guarantor loan, vendor finance or using security from another existing property.

      On this page, you can compare a range of home loans that require little or no deposit in the table provided above. You can also fill out the form to speak with a mortgage broker to discuss your options.

      Kind regards,
      Belinda

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