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100% home loans

True 100 percent home loans are a thing of the past, but you can get a no-deposit loan by using a guarantor. The next best option is a loan with a 5% deposit.

Australian lenders won't lend you 100% of a property's value any more. It's just too risky. You'll need at least a 5% deposit to get a home loan, if not a full 20% deposit. There are only 2 ways to get something close to a true 100% home loan: Have a guarantor, or be creative with how you build your deposit.

What is a 100% home loan?

Every home loan has a maximum loan-to-value ratio (LVR). This is the amount you can borrow in relation to your property's value and your deposit size. In plainer terms, a maximum LVR just means a minimum deposit. It's how much you need to have saved as a deposit to get the loan.

Many home loans have LVRs of 80%, meaning you need at least a 20% deposit. You can borrow 80% of your property's value. Here's an example:

  • You buy a property with a value of $800,000.
  • You have a 20% deposit of $160,000.
  • You borrow the remaining 80%, or $640,000.

So a 100% home loan means the maximum LVR would be 100%. But these loans don't really exist any more.

Borrow 100% with a guarantor

Woman and her boyfriend just bought their own house.The only real way to borrow 100% these days is with a guarantor. This is usually a family member who owns their own property and can guarantee your deposit.

With a home loan guarantor, you can borrow 100% of the property's value and then pay it back, like any other mortgage. All the guarantor has to do is sign the contract and offer their property as security. If you keep making repayments, all is well. But if you can't repay the mortgage, suddenly your guarantor's property is at risk. Your lender could force your guarantor to pay part of your mortgage obligations and even sell their home.

Here are the basic things you need to know about guarantors:

  • Eligibility. A guarantor should be a family member over 18 years old who has equity in their property and good credit.
  • Risk. If you default on your mortgage (meaning you can't make repayments) then your guarantor might have to pay up. This could force them to sell their property in order to pay back your lender.
  • Repaying the deposit. If your guarantor only agreed to guarantee a 20% deposit then once you've repaid 20% of the loan they're off the hook even if you default. This helps minimise the guarantor's risks.
  • Avoid LMI. Another advantage of having a guarantor is you can avoid lenders mortgage insurance (LMI) even though you haven't saved a 20% deposit yourself. This could save you thousands.

Can I borrow more than 100%?

Yes. With a guarantor some lenders will let you borrow up to 110% of a property's value. You can also borrow less than 100% by contributing some of your own savings. This is a good way to for low deposit borrowers to get a loan while avoiding LMI.

You can also read more on no deposit borrowing in our longer guide.

Finder survey: How did Australians secure a low-deposit home loan?

Government grant26.67%
Lender offer (E.g. essential worker loan,green energy loan)16.67%
Source: Finder survey by Pure Profile of 1112 Australians, December 2023

Build a deposit through cash gifts, inheritance or other alternatives

If you can't get a guarantor you could scrape a deposit together from many sources. Lenders do want you to have at least 5% of a property's value in genuine savings, but there is a way around this. You can get a deposit together in the following ways:

  • Your parents could give you deposit money as a gift or you could inherit the money.
  • You could sell an asset, such as shares, to fund your deposit.
  • You could use equity in another property you own.
  • A first home owners grant can count as part of a deposit.

The genuine savings rule is the tricky issue with the options above (and the fact that not everyone can take advantage of gifts or assets). But if money from a gift, sale or inheritance has been sitting in your account for three to six months most lenders will accept it as genuine savings regardless.

The complete guide to saving up a deposit

Get a low deposit mortgage

Lastly, you can save a 5% deposit the old-fashioned way and look for a low deposit home loan. There are many mortgages out there which you can get with a 5% or 10% deposit.

How do you spot a low deposit home loan? Look at the maximum insured loan to value ratio (LVR), which should be 90–95%. A 90% LVR means a 10% deposit. A 95% LVR means you only need a 5% deposit. But don't forget there's lenders mortgage insurance on top.

Buying a home with first home buyer help

There are some state and federal policies to help first home buyers enter the property market. You can build your deposit with this support and minimise your deposit size. While most borrowers won't be able to use these policies to borrow 100%, it could help them get close.

Here's how it works. In many states, eligible first home buyers can get a grant of $10,000 towards their first home. There are multiple restrictions, and eligibility depends on the value of the home and often whether it's a newly-built home or not. These grants can form part of your deposit.

If your home only cost $200,000 (which in many parts of Australia is unlikely) you could actually use the $10,000 grant as a 5% deposit. That's essentially a 100% home loan because you don't need a deposit. Although lenders will definitely need to see proof that you are earning (and saving) enough money to repay the loan.

The federal government also has a scheme called the First Home Loan Deposit Scheme. This scheme allows a small number of eligible borrowers to get a home loan with a 5% deposit and avoid paying LMI. This could save you thousands, as LMI for low deposit borrowers can be expensive.

Why won't lenders give you a 100% home loan any more?

Having a deposit makes you a safer borrower in the eyes of lenders. It demonstrates your ability to save money, and suggests you are financially responsible enough to meet your ongoing mortgage repayments.

There was a time when lenders might give you all the money you need to buy a house without a deposit. In a time when property prices are rising fast, some lenders felt it was safe enough to lend 100%. If you couldn't repay the loan, the lender could simply sell your property and recover the debt.

But after the 2008 Global Financial Crisis, Australian banks tightened their lending criteria. The American financial collapse proved that if something goes wrong in the economy, property prices can fall at the same time borrowers can't afford to make repayments. Suddenly those homes aren't worth as much, and lenders can't recover their losses.

By tightening their lending criteria, Australian banks and lenders are now better able to lend to people who can realistically afford to repay their loans. By limiting loan-to-value ratios below 100%, lenders can have more confidence that borrowers have some equity in their properties, making them better able to recover debts if the borrowers default on their mortgages.

Image: Shutterstock

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Frequently asked questions about 100% home loans

Written by

Richard Whitten

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full profile

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10 Responses

    Default Gravatar
    RathanavearyOctober 30, 2016

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

      MayOctober 31, 2016Finder

      Hi Rathanaveary,

      Thank you for contacting Finder.

      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 how a home loan with a guarantor works through our guarantor home loans page.

      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.


    Default Gravatar
    gavinFebruary 24, 2016

    Can I get a home loan for 175000 without a deposit

      Default Gravatar
      BelindaFebruary 25, 2016

      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.

      You can compare a range of low deposit home loans on our comparison table 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 the lender’s mortgage insurance (LMI).

      I also recommend getting in touch with a licensed mortgage broker A broker can help you understand your financial position and they can leverage their panel of networks to find a lender that’s more inclined to review your application. 

      Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you.


    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.

      MarcDecember 21, 2015Finder

      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,

    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

      MarcDecember 14, 2015Finder

      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,

    Default Gravatar
    carolJuly 3, 2015

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

      Default Gravatar
      BelindaJuly 6, 2015

      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,

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