How to get a home loan with only a 5% deposit

Plenty of lenders will let you borrow 95% of a property's value. Find a 5% deposit mortgage and buy your dream home sooner.

Saving a 20% deposit just isn't realistic for many Aussie home buyers. Luckily there are plenty of mortgages you can get with just 5% of a property's value saved. You may have to pay lenders mortgage insurance, but 95% home loans can get you into the property market faster.

Read on to see if this is the right choice for you and start comparing your options.

Greater Bank Home Loan Offer

Greater Bank Great Rate Discount Variable with Family Pledge Home Loan - Up to 110% LVR

3.74 % p.a.

variable rate

3.74 % p.a.

comparison rate

Greater Bank Home Loan Offer

Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, Qld and ACT only.

  • Interest rate of 3.74% p.a.
  • Comparison rate of 3.74% p.a.
  • Application fee of $0
  • Maximum LVR: 110%
  • Minimum borrowing: $150,000
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Compare a wide range of home loans with 95% LVRs

Rates last updated November 13th, 2018
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Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.74%
3.74%
$0
$0 p.a.
110%
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, Qld and ACT only.
3.62%
3.62%
$0
$0 p.a.
95%
A low deposit mortgage with a competitive rate and plenty of flexibility. QLD residents only. Eligible borrowers can get a 15% discount on home and contents insurance for the life of their loan.
3.87%
3.91%
$600
$0 p.a.
95%
A home loan with no ongoing fee and a redraw facility that you can borrow up to 95% LVR.
3.59%
3.99%
$600
$395 p.a.
95%
Get interest rate discounts and waived fees on this package loan with a 100% offset account.
3.79%
4.75%
$375
$15 monthly ($180 p.a.)
95%
A fixed rate home loan with 100% offset account.
4.65%
5.02%
$0
$395 p.a.
95%
No application fee and 100% offset account. Refinance to this loan and you could get $1,500 cashback.
3.79%
4.87%
$0
$395 p.a.
95%
Enjoy a fixed home loan with discounts on rates and other NAB products.
3.87%
3.92%
$600
$0 p.a.
95%
A low deposit mortgage for aspiring home owners. Fees are low and you can make extra repayments.
3.89%
5.12%
$600
$8 monthly ($96 p.a.)
95%
A fixed rate home loan with additional repayment options.
3.75%
4.72%
$0
$299 p.a.
95%
Let the experts help you get a mortgage. Speak to a broker about this sharp fixed rate loan and compare many other mortgage offers from across the market.
3.49%
3.52%
$500
$0 p.a.
95%
This mortgage combines a very sharp interest rate with a 100% offset account and it's available with a 5% deposit.
4.08%
4.09%
$0
$0 p.a.
95%
Special Owner Occupier Rate. Free Offset Account.
4.09%
5.06%
$600
$8 monthly ($96 p.a.)
95%
Fix in a competitive rate for three years.
4.64%
4.69%
$600
$0 p.a.
95%
New customers can score a discounted rate and access to a redraw facility.
4.48%
4.70%
$595
$0 p.a.
95%
Switch to this loan and get a $1,500 refinance cashback. Discount off the standard variable rate and no application fee.
4.33%
4.34%
$0
$0 p.a.
95%
A special investment rate and an offset account.
4.29%
4.26%
$0
$0 p.a.
95%
A competitive 3-year fixed rate loan with a high max insured LVR.
3.99%
4.86%
$595
$0 p.a.
95%
Split you home loan for free with one of the lowest fixed home loan rates.
3.99%
4.66%
$375
$15 monthly ($180 p.a.)
95%
A three year fixed rate loan with 100% offset account.
4.14%
4.33%
$0
$0 p.a.
95%
Borrow up to 95% LVR with no application fee and low ongoing fee.

Compare up to 4 providers

How can I get a mortgage with a 5% deposit?

Couple getting a cheap mortgage.Most home loans require a 20% deposit (80% maximum loan-to-value ratio). But some products have a maximum insured loan-to-value ratio of 90 or even 95%. This means you can forget the 20% deposit and buy your property with a smaller deposit.

There's only one catch. Getting a loan with less than a 20% deposit means you'll have to pay lenders mortgage insurance. This is an extra cost which protects your lender, not you, in case you can't repay your debt. It's a one-off cost but it can add up to thousands of dollars, especially if you're borrowing 95% of a property's value.

Before considering getting a loan with a 5% deposit calculate how much LMI will add to your costs (you can use Genworth's LMI calculator). It could be worth paying extra to get your own property faster. But while LMI costs can be capitalised (meaning you can borrow this sum along with the money needed to buy a property) it will affect how much you can borrow.

Is there anything else I need to be aware of?

Aside from LMI costs you should be aware that some 95% home loans come with higher fees or a less competitive interest rate. But because the mortgage market is so competitive you can find many loans that keep fees and interest rates low even when lending you most of a property's value. The table above is filled with such products, but be sure to read the fine print on fees and features when comparing.

A smaller deposit means more paying more in interest

Getting a loan with such a small deposit inevitably means paying more in interest over time. To get a clearer idea of the difference in interest costs, use our loan repayment calculator and enter your borrowing details. Use the same interest rate and loan term but try entering different loan amounts. The difference in interest you'll pay over the life of the loan can be significant. Here's an example:

Property cost: $600,000

  • 20% deposit = $120,000 (loan amount of $480,000)
  • Interest rate: 3.65%
  • Loan term: 30 years
  • Monthly repayments: $2,195.81
  • Total interest payable: $310,490.12

Property cost: $600,000

  • 5% deposit = $30,000 (loan amount of $570,000)
  • Interest rate: 3.65%
  • Loan term: 30 years
  • Monthly repayments: $2,607.52
  • Total interest payable: $368,707.02

Find more low deposit loans and advice here

Can I get a mortgage without a 5% deposit?

It is possible buy a property without saving a deposit at all, but it isn't easy. Most lenders require at least 5% genuine savings. In other words, they will lend you 95% of a property's costs, but that 5% needs to be money you've saved. This is often defined as money that's been sitting in your account for at least 6 months. But there are ways around this:

  • Parental guarantor. If your parents own a property they can use it as security to guarantee your mortgage. You have the option of saving 5% yourself and getting your parents to guarantee the other 15% of the deposit. This way you can avoid LMI. But some lenders will allow your guarantor to cover the full 20% of the deposit. Just keep in mind that your guarantor will have to pay the portion of the mortgage they've guaranteed if you can't repay it.
  • First home owners grant (FHOG). If you're eligible for a first home owners grant this can form part of your deposit, making it even easier to get to 5%.
  • Selling shares or other assets. You can sell off an investment and use the cash as a deposit but you may need to satisfy the genuine savings rule.
  • Cash gift or inheritance. If you're fortunate enough to receive a cash gift or inheritance you could use this as your deposit but again, watch out for the genuine savings rule. Some lenders may accept a 10% deposit made of a gift or inheritance, but you need to do your research.

Learn more about how you can save a deposit with our comprehensive deposit savings guide.

How do I apply for a low deposit mortgage?

Using the table above you can sort through loans with 95% LVRs and read reviews of the various products and lenders. Look at the fees, flexibility and features the loans come with to get a better idea of which ones work for you.

When you've found a product you're interested in hit the green button and you'll be taken to either a website or a form, where you can leave your details and get in touch with a mortgage expert. They'll guide you through the application process.

To make the process easier you'll need to meet the following requirements:

  • Be at least 18 years of age
  • Be a permanent Australian resident or citizen
  • Have a good credit history
  • Have a good employment history

Once you meet the above criteria, you are ready to proceed with your application. It’s important to ensure you have the following information and documents ready:

  • Proof of identification
  • Employment details
  • Financial details

Need professional help getting the right loan? Chat to a broker

Richard Whitten

Richard is a home loans expert at finder. He can help you navigate the complex world of home loans and find a better deal.

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UBank UHomeLoan Variable Rate - Discount offer for Owner Occupiers, P&I Borrowing over $200,000

Take advantage of a low-fee mortgage with a special interest rate of just 3.59% p.a. and a 3.59% p.a. comparison rate.

loans.com.au Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.64% p.a.
comp rate of 3.66% p.a.

Tic:Toc Live in Loan Variable Rate - Principal & Interest

Get a very low interest rate and avoid big fees. Apply online for full approval in under 30 minutes and add a 100% offset account for $10 a month.

HSBC Home Value Loan - (Owner Occupier P&I)

Get a low interest rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online. Available with just a 10% deposit.

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