Low deposit home loans comparison

How to get a home loan with a low deposit

Rates and fees last updated on

With the right lenders, it's still possible to buy a home with a small deposit

There are some lenders out there willing to accept applications from people who only have a small deposit saved. This is great news for first home buyers, but also for those on a tight budget who can't manage to save the huge deposit amounts some banks want to see.

Compare home loans with 5%-10% deposit

Rates last updated October 21st, 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
3.65%
3.66%
$0
$0 p.a.
90%
Enjoy a low variable rate with no ongoing fees and borrow up to 90% of the value of the property.
3.65%
4.84%
$0
$395 p.a.
90%
A 2 years fixed platinum package that has $0 application and a loan redraw facility.
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.
3.69%
3.69%
$0
$0 p.a.
95%
Enjoy an offset account and extra repayments up to $10,000 so you can pay off your loan sooner.
3.77%
3.81%
$200
$0 p.a.
95%
A basic home loan with a low interest rate and a redraw facility available.
3.79%
3.82%
$0
$0 p.a.
90%
A home loan with a special rate for owner occupiers. Free offset account.
3.65%
4.10%
$500
$0 p.a.
95%
Get a discounted fixed interest rate for the first 12 months while you settle into your new loan.
3.99%
4.02%
$600
$0 p.a.
90%
Take advantage of a 0.60% discount on your rate, a 100% offset account and no ongoing fees.
3.99%
4.80%
$0
$0 p.a.
95%
A low 3-year fixed rate with the option to split your loan for free.
3.84%
3.84%
$0
$0 p.a.
110%
Requires a family member to act as guarantor. Discounted rate available with family pledge loans. Family pledge loans require no LMI and no deposit. NSW, Qld and ACT only.
3.84%
4.58%
$445
$0 p.a.
90%
A two year discounted rate which reverts to an ongoing life of loan discount afterwards.
3.84%
4.83%
$0
$0 p.a.
95%
Get a competitive 2-year fixed rate with no application or ongoing fees.
3.88%
4.89%
$0
$395 p.a.
95%
A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.96%
3.98%
$0
$0 p.a.
90%
Take advantage of a redraw facility, competitive variable rate and no application or settlement fees for a limited time.
3.97%
3.99%
$0
$0 p.a.
90%
A discounted interest rate home loan with no monthly fees.
3.99%
5.25%
$600
$8 monthly ($96 p.a.)
95%
Enjoy a low rate fixed home loan with the ability to borrow up to 95% of the property value. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.99%
4.77%
$0
$0 p.a.
95%
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
4.17%
4.17%
$0
$0 p.a.
95%
Borrow up to $650,000 with a competitive rate. Deposit of only 5% required.
4.39%
4.78%
$0
$395 p.a.
95%
A bank home loan that allows you to borrow up to 95% LVR.
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.
3.83%
4.14%
$0
$299 p.a.
95%
A package home loan with a 100% offset account and high maximum LVR.

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Why do you need a deposit?

Some banks insist on seeing that the deposit amount you have is genuinely saved. This means they want to see evidence of regular savings deposits going into a savings account towards building up your deposit over time. Usually, they'll ask to see your savings account statements to verify this.

Lenders want to ascertain what level of financial responsibility you have before you get into such a large, long-term debt. After all, if you can manage to pay your living expenses and still find the discipline to put money aside each week, they have more confidence that you'll do the same thing when it comes to making your mortgage repayments on time.

How much deposit do you need?

One of the biggest traps many home buyers fall into is saving a big enough deposit to purchase a home, but they completely forget to put aside enough money to cover the rest of the fees and charges associated with buying a home.

For example; your bank may ask that you have a 5% deposit. This means you'll need to put down at least 5% of the purchase price of the home, while they lend you the remaining 95% of the price.

So if you buy a house for $300,000 you will need a $15,000 deposit.

Did you know?

Borrowing 95% of the property value means that you will need to pay a lenders mortgage insurance fee. This is a fee that your bank's insurer charges them for lending you money above the usual safety threshold of 80% of the property price. You only need to pay this fee once. Unfortunately, it can often add thousands of dollars.

Some banks will let you capitalise your lenders mortgage insurance (LMI) fee on the top of your mortgage amount. So they'll lend you 95% of the purchase price of your new home, plus an additional 2% to cover the LMI fee.

There are also government fees and charges to account for. When you buy a home you will need to pay stamp duty. This is calculated differently for each state, so it's worth checking on a good stamp duty calculator how much you're likely to pay based on the amount you're paying for your home.

Don't forget to add in things like legal fees, conveyancing fees and transfer fees to your total. Find out the true cost of buying a property here.

First home buyers may be able to get a little assistance here with the First Home Owner Grants helping to cover those fees.

Can anyone get approved for a low deposit home loan?

While the banks might advertise that you can borrow up to 95% of the purchase price of your new home, it's important to realise that lending criteria still applies.

Good credit history

In order to get your loan approved at a high LVR like 95%, you will need to have a clean credit history. This means you should have no defaults showing on your credit report for missed payments on other bills.
credit histor

Good employment history

You will also need to demonstrate that you have a stable employment history. This means showing that you've been in the same job for at least 6-12 months, or been working within the same industry in a similar role.

There are some job roles and industries where banks may consider approving your loan after only being in your job a short time. These can include nurses or paramedics, who are required to study for three years prior to gaining an employment contract. Those years of study, plus an ongoing contract can sometimes be strong enough to sway a credit assessor to approve your loan even if you've been employed less than 12 months.

You're unlikely to get your loan application approved if you're still on probation with a new employer, so it's best to wait until your probation has ended.

Genuine savings

If you can show where your 5% savings amount came from, this will go in your favour. For example, showing your savings account statements with regular deposits going into it will be viewed favourably.

Genuine savings

Good asset position

The credit assessor will view your existing assets and consider them in terms of whether you're doing well based on your age and income. For example, if you're a first home buyer and you have 5% savings and a car, this may be considered a positive asset position for your age and income.

If you're in a high income job and you're buying your second home, the bank will want to see that you have started to build up equity in your home and that you don't have all your credit cards maxed out. They want to see that you've been putting your income to good use wherever you can.

Controlled debts

If you submit your home loan application and it shows that you have several credit cards, a car loan, and a personal loan all outstanding, it's likely your loan will be declined. If your outstanding debts add up to more than 7% of the purchase price of your house, you likely won't get approved.

Instead, one idea is to work on getting debts under control. Consider paying down credit card balances and close any unnecessary accounts. Consider also paying off any unsecured personal loans you have.

Remember, when the bank considers whether you'll be able to afford your new mortgage, they take your after-tax income amount and then they deduct all the payments you make on your current debts. Then they take away an extra amount to cover your living expenses and bills. The amount remaining is how much they think you have left to pay your mortgage.

So if you can reduce any unnecessary debts before you apply, you suddenly strengthen your application, as you've freed up your income from the burden of all those repayments.

Do no deposit loans still exist?

It was once possible to borrow the entire purchase price of a home with a no deposit home loan. These loans allowed you to buy a home without having to save a deposit at all. While, true no deposit home loans no longer exist, there are options for borrowers who are having trouble saving a deposit.

Gifted deposit

If you have generous parents and they're willing to extend you a gift to act as your deposit amount, you might be able to get away with a very small history of genuine savings.

If you're able to reduce your loan amount so you're only borrowing 90% of the purchase price, some banks won't ask you to prove that you have genuine savings. This means mum and dad need to come up with 10% of the purchase price and offer it to you as a gift. The bank will let you borrow the remaining 90% you need, but don't forget that you still need to pay stamp duty and other government fees and charges on top of that as well. Have you received a gift of money for a deposit?

Guarantee from parents

If your parents own their home and they are happy to act as guarantors on your mortgage, you should find you can borrow 100% of the purchase price of your new home without having any savings.

Essentially, the bank takes a guarantee from your parents that is secured by the equity they have in their own property.

Just be absolutely sure that you and your parents understand all the implications of guarantorship before you enter into this type of agreement.

Existing property

If you already have equity in your family home, you may be able to use this to secure the purchase for your next property. Effectively, this lets you borrow 100% of the purchase price of your new property without having any savings.

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21 Responses

  1. Default Gravatar
    September 6, 2017

    why can’t income protection be classed as income?

    • Staff
      MaySeptember 8, 2017Staff

      Hi Belle,

      Thank you for your inquiry.

      As the term implies, income protection insurance is your “protection” by the time you lose your income if you are no longer able to work due to injury or sickness. So lenders may not consider this as your proof of income.

      In terms of a home loan, your financial situation such as your income, assets, liabilities and credit history will be evaluated by the lender when they consider your application. As for your income, lenders would need to check whether you have income from an employment, business, pension etc. Please note though that each lender has their own set of eligibility requirements and this differ from lender to lender. On this page you can find some tips about lending criteria for home loans, which you may find useful.

      Cheers,
      May

  2. Default Gravatar
    JezameAugust 25, 2017

    Hi, when I was in my mid 20′s I became bankrupt. Now in my late 30′s it is no longer on my credit record, and I have $40k in savings averaging $3k per month. Do I have to declare my past bankruptcy even if well over 10 years ago? And if I do, would I still be able to access the 95% loans?

    • Staff
      JonathanAugust 26, 2017Staff

      Hello Jezame,

      Thank you for your question.

      Yes. Although information is eventually cleared from your credit file, if you’re declared bankrupt, your name and personal details are recorded on the National Personal Insolvency Index (NPII) permanently. It is a public record that can be viewed by anyone for a fee and maintained by the Australian Financial Security Authority (AFSA). Your lender would verify the date of discharge and will weigh in your current financial situation. If you have not declared this and your creditor found out, this may result to exclusion immediately.

      95% loans is generally available for those with good or higher credit standings, as higher mortgage ratio increases “Default risk”. You may instead check Home Loans For Discharged Bankrupts.

      Hope this helps.

      Cheers,
      Jonathan

  3. Default Gravatar
    RobbieAugust 12, 2017

    Hi
    I am 54 my wife is 44.I been working same job last 11 years we wan’t to build a new home. we have about $10,000 in savings never own our own home we are eligible for Victoria first home owners grant would banks look at us ?

    • Staff
      ArnoldAugust 12, 2017Staff

      Hi Robbie,

      Thanks for your inquiry.

      The $10,000 First Home Owner Grant is available to eligible applicants buying or building a new home valued at up to $750,000. From 1 July, a $20,000 First Home Owner Grant will be available to applicants buying or building a new home in regional Victoria valued up to $750,000.

      Also, if you are buying your first home and it is valued at less than $600,000, you may be eligible for a duty reduction of up to 50%. This concession applies to new and established homes.

      From 1 July, first home buyers purchasing a new or established home valued below $600,000 will be exempt from stamp duty, while buyers purchasing a new or established home valued between $600,000 and $750,000 will be eligible for a stamp duty concession, applied on a sliding scale.

      Please see the full guide here.

      Hope this information helped.

      Cheers,
      Arnold

  4. Default Gravatar
    sueJuly 8, 2017

    My partner is 52 and is a self employed tiler who owned a house over twenty years ago. We have one child. I am a stay at home mum whob never owned a house. Can he access his Super to purchase a home in Qld State and would we qualify for the first home loan grant? Would we need to apply for low document loan given he is self employed & can you explain low document application loan verses a standard loan?

    • Staff
      JonathanJuly 11, 2017Staff

      Hello Sue!

      Thanks for the inquiry! :)
      One of the determination in QLD government in qualifying for the grant is you or your spouse should not held an interest in residential property before 1 July 2000, regardless of how the property was used. You can check the full guide on this page.

      As for the difference between low doc loans versus a regular home loan, two main points. First is the requirement, wherein low doc loans is more beneficial for self-employed because they provide self-certification document instead of traditional proof of income such as pay stubs, income tax return and company financials. Second is on the rates, generally low doc loans due to their intrinsically higher risk, have a bit higher rate. Although some lenders recently give almost the same rates for low doc and regular home loans. You can check our full guide on this page.

      Hope this helps.

      Cheers,
      Jonathan

  5. Default Gravatar
    JasonAugust 17, 2016

    HI, Which lenders will take A 5% deposit and also let you put the LMI on top of that?

    • Staff
      MayAugust 17, 2016Staff

      Hi Jason,

      Thank you for your question.

      On this page, you can actually compare a range of loans in the market with only 5% deposit.

      As for the LMI, we only have limited information about this but usually, LMI will be taken out by a lender when they allow you to take out a loan with a higher LVR, say 95%. Also, as LMI is not automatically applied for, you must organise it with the application to the loan.

      Seeking a professional advice from a mortgage broker would also be best as they’ll be able to take all your circumstances into account and offer you a range of lending options.

      Cheers,
      May

  6. Default Gravatar
    kylieMarch 26, 2016

    What sort of grants are available to first home buyers? How do u go about applying for them and how can u apply them to your deposit?

    • Staff
      BelindaMarch 29, 2016Staff

      Hi Kylie,

      Thanks for reaching out.

      We have a first home owner grant (FHOG) guide which outlines the grants and concessions available for first home buyers in each state and territory.

      To be eligible for the FHOG, you must satisfy a range of criteria but generally you must be aged 18 years and over, at least one applicant must be a permanent resident or Australian citizen and all applicants cannot have previously owned a residential property in Australia.

      If you believe you’re eligible for the FHOG in your state, then you can visit your state government department for details about how to apply. Generally, you can apply through a FHOG approved agent or through the Office of State Revenue (OSR).

      All the best,
      Belinda

  7. Default Gravatar
    LouiseFebruary 15, 2016

    My husband and I had our home we were paying off. We then borrowed and invested in a company that built units and the directors fraudulently siphoned off any profits and went into liquidation. We were left with a huge debt and chose to sell our home, become debt free and pay out the investment loan. We lost around $220,000 dollars. Now my husband is a pensioner 67years old and I have a regular income of $490 per fortnight. Is there any way we could go for a loan and start again. There are houses around $140,000 in our area. I am 63

    • Staff
      MarcFebruary 16, 2016Staff

      Hi Louise,
      thanks for the question.

      Unfortunately it’s difficult for me to give you an answer without looking at all of your personal situation, including your assets, other debts and credit history. You might wish to consult a mortgage broker to find out what options may exist for you, as they will take into account all aspects of your application before suggesting a lender and loan.

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

  8. Default Gravatar
    judyFebruary 11, 2016

    do lenders allow you to use the first home owners grant as part of the deposit

    • Staff
      MarcFebruary 15, 2016Staff

      Hi Judy,
      thanks for the question.

      Yes, some lenders will allow you to use your grant to form part of your deposit.

      I hope this helps,
      Marc.

  9. Default Gravatar
    paulineOctober 13, 2015

    We are over 55 and looking to buy our first home, however we do not have a deposit at this stage and have about $50000 in debt and paying off some of the smaller debts and have no defaults. My husband has been in the same job for 8 yrs and I work casual.
    Would we be considered by any lender for a mortgage

    • Staff
      MarcOctober 14, 2015Staff

      Hi Pauline,
      thanks for the question.

      Unfortunately Australian lenders will generally require a deposit of at least 5% of the property’s value for a borrower to qualify for a home loan, unless the borrower has a guarantor who can use the equity in their property to guarantee the deposit or a portion of it for the borrowers.

      I hope this helps,
      Marc.

  10. Default Gravatar
    RebeccaJune 9, 2015

    daughter has ability to quickly repay mortgage of $185,000 at weekly repayments of $250 but only has $6000 savings towards deposit. What does she do

    • Staff
      BelindaJune 11, 2015Staff

      Hi Rebecca,

      Thanks for your enquiry.

      On this page, you can compare a range of lenders that offer the ability to borrow 95% loan to value ratio (LVR).

      Your daughter might be interested to learn more about guarantor loans which could help with her deposit.

      It is advisable that she speaks with a mortgage broker to discuss her options.

      Thanks,
      Belinda

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