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No-Deposit Home Loans

Own a property in Australia without having to bust your savings

BOOK A CONSULTATION

No-Deposit Home Loans

Own a property in Australia without having to bust your savings

BOOK A CONSULTATION

What is a No-Deposit Home Loan?

A no-deposit or a zero-deposit home loan is a type of loan package that allows borrowers to purchase a property without paying the mandatory upfront deposit. Traditionally, homebuyers are expected to provide a deposit of around 20% of the property's purchase price, but 10% is also acceptable in some cases. However, if you have less than 10% or no savings to put towards your deposit, then with a no-deposit home loan, you can finance the entire property value, making homeownership more accessible.

Types of No-Deposit Home Loans

Guarantor Home Loan: A guarantor loan is a type of loan in which a third party (mostly parents) guarantees that you will not default on the home loan by putting down their own property as a deposit. It is the most common and widely accepted way of getting a home loan of up to 100% with no deposit.
Home Equity as Deposit: If you already own a property with sufficient equity (you have made sufficient repayments on your home loan for some years, or you do not have any mortgage), some lenders allow you to use this equity as a deposit for a new property purchase. This method can be particularly useful for property investors.

If you have at least 5 to 10% of the deposit amount, you can also apply for a low-deposit home loan type. Below are some of the options for the same:

Personal Loan: Some lenders may allow you to use a personal loan to boost your deposit if you have a stable income or are a high-income earner. This can help you reach a better loan-to-value ratio (LVR), potentially securing more favorable mortgage terms.

95% Home Loan: A 95% home loan requires only a 5% deposit, making it more accessible for many buyers. This type of home loan is generally extended to specific professionals such as doctors, nurses, and firefighters as a separate home loan package. Certain high-income earners or individuals with excellent credit history may also qualify. Talk to our broker team today to find out if you qualify!
Gifted Deposit by Parent: Some lenders accept a monetary gift from parents as a deposit. This non-refundable gift which amounts to 5-15% of the purchase price and can qualify as a deposit. The remaining sum required needs to come from your own pocket.

The fastest path to owning/building equity in a property without extensive saving

Pros

Cons

Pros and Cons of No Deposit Home Loans

Potential to benefit from property appreciation earlier

Saves from the danger of your dream property’s valuation spike over the years you spend on saving the deposit amount

May be combined with government grants for first-time buyers

Stricter eligibility requirements and limited lender options

Higher risk of negative equity if property values decrease

Typically requires Lenders Mortgage Insurance (LMI)

Potential for higher interest rates and overall loan costs

Risk of over-borrowing and future financial strain

The fastest path to owning/building equity in a property without extensive saving

Pros

Cons

Pros and Cons of No Deposit Home Loans

Potential to benefit from property appreciation earlier

Saves from the danger of your dream property’s valuation spike over the years you spend on saving the deposit amount

May be combined with government grants for first-time buyers

Stricter eligibility requirements and limited lender options

Higher risk of negative equity if property values decrease

Typically requires Lenders Mortgage Insurance (LMI)

Potential for higher interest rates and overall loan costs

Risk of over-borrowing and future financial strain

The fastest path to owning/building equity in a property without extensive saving

Pros

Cons

Pros and Cons of No Deposit Home Loans

Potential to benefit from property appreciation earlier

Saves from the danger of your dream property’s valuation spike over the years you spend on saving the deposit amount

May be combined with government grants for first-time buyers

Stricter eligibility requirements and limited lender options

Higher risk of negative equity if property values decrease

Typically requires Lenders Mortgage Insurance (LMI)

Potential for higher interest rates and overall loan costs

Risk of over-borrowing and future financial strain

The fastest path to owning/building equity in a property without extensive saving

Pros

Cons

Pros and Cons of No Deposit Home Loans

Potential to benefit from property appreciation earlier

Saves from the danger of your dream property’s valuation spike over the years you spend on saving the deposit amount

May be combined with government grants for first-time buyers

Stricter eligibility requirements and limited lender options

Higher risk of negative equity if property values decrease

Typically requires Lenders Mortgage Insurance (LMI)

Potential for higher interest rates and overall loan costs

Risk of over-borrowing and future financial strain

fAQs

Buying a second property with no deposit is challenging but possible. The most common approach is to use equity from your existing property as a deposit for the new purchase. However, this strategy increases your overall debt, which can be risky if you do not have enough to make repayments at any point during the repayment period.

How do I buy a second property with no deposit?

Want to secure a no-deposit home loan but don’t know which type is the best for your case? Fill out our consultation form today so our team at Select Loan & Mortgage can help you with the process!

Ready to Get Your Dream Home With Us.

Book A Consultation

Select Loan & Mortgage is a one-stop solution for home loan consulting services in Australia.

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ACN: 680 285 143

Address: Level 10, 90 King William Street Adelaide SA 5000

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This page provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.