Low or no deposit home loans in Australia

Low or No Deposit Home Loans in Australia

Interest rate for home loans in Australia

Introduction to home loans and deposit in Australia

The housing market in Australia is arguably as volatile as it has ever been in the last few years. The economic crash pretty much worldwide has left a lot of people without the large amounts of credit needed to get a normal deposit for purchasing a home or even a car. Home loans are hard to come by today, especially with a bad credit and the majority of them require a large deposit that takes many years of saving and frugality to put together.

However, you can’t just click your fingers and get one of these loans. Unlike a payday loan, this is a viable and long-term payment strategy – it just changes the dynamics a little from a traditional loan. You will be scrutinized very thoroughly so if you have a weak or patchy credit and/or employment history, you may find yourself rejected even by the smallest of home loans firms.

What do you need to pay?

Even with a Low or No deposit loan, you’ll need to put some kind of fee down. However, these home loan arrangements are far more beneficial to you – they can provide up to 95% of the purchase price of the house, leaving you with a fraction of the deposit you would usually be asked to try and pick up. This can be the fast track that families need to get themselves quality accommodation for years to come.

The deposit is necessary because the credit crunch has pretty much made it impossible for people to just borrow as much as they like, today companies are looking for a bit of insurance or reliability from their clients. When you take on this type of payment project, you will need something known as Lenders Mortgage Insurance, which can add another few thousand dollars to the overall cost. The worst part for you is that this insurance covers the lender, not you!

Because they are doing you such a big favor, they need some kind of collateral in return. This can be avoided if your parents will act as your guarantor, though.

Interest rate for home loans in Australia

Interest rate for home loans in Australia

The Interest Rates

The money that you put down on your home as the deposit will determine how much you actually need to pay as an interest rate. This can be quite an issue for some people, as it can leave you chasing a large interest rate on the loan because you can’t afford to get a large deposit in place. Going for a low or no deposit home loan can mean you get the home you want, but in the long-term you might need to pay a little bit extra.

For many families though, this is worth it. Being able to move into a property that you can mold and build as your own for years to come is far more exciting than living in squalor for a few years to afford it, right? If you can’t afford to get the deposit together that you need for a standard variable loan, then going for a Low or No deposit loan might be the next best thing for you.

No deposit home loans Australia: How to get a home loan with zero deposit

No deposit home loan

A New Era

For many people, the glory days of 0 deposit home loans are finished. There is simply no longer the volume in the market or the excess of cash floating around at the moment for home loan firms to offer the entire percentage of the home loan for a family. In the past, this let a lot of people take on projects way out of their financial reach and build up to it, paying the loan back at a fair rate. The economic crash has put paid to this type of behavior though and it means that in the future, many people will have to battle to get zero deposit home loans in Australia.

If you are looking to get a home loan without deposit requirements, then you will need to be able to provide proof of a very strong credit history and employment record. Your credit record will need to be immaculate to get this kind of no deposit home loan, but it’s worth trying for as it can leave you with just the debt to pay, as well as your own capital that you already had to put into the development and growth of your new property.

Using Your Connections

Use your connection to get a no deposit home loan

Use your connections!

However, home loans with no deposit are still attainable so long as you can get a family member, like your parents, to act as your guarantor. This can help you save thousands in mortgage payments, insurance extras and high interest rates. By having a responsible person speak up for you and offer themselves as the next in line should that be needed, you can find hat getting a home loan no deposit required is much easier.

So long as your guarantor owns a property of their own and can vouch for you legitimately, then this is the perfect way to convince a no deposit home loans team that you are worth taking on. While you may not be able to get a 0% home deposit loan, you can regularly get access to as much as 95% of the entire fee, as long as you have the assistance of a guarantor who is responsible themselves and can give the company a detailed history of their financial history you have a great chance of getting a 0 deposit home loan.

Filing With The Right Institution

Of course, it also depends on the bank that you use. Some banks will take on zero deposit home loans by offering a much larger interest rate. When you are into the five and six figure regions, do you really want to be adding those extra percentages on? Using the right no deposit home loans firm is very important, as they can be the ones that give you the rates you can actually afford.

Getting the right firm who will take your guarantor at face value is the key to getting the type of loan you are looking for – it just takes a bit of work and determination to make sure that it goes through. If you can convince a loved one or a close friend to provide you with the guarantor details, you are in a much better position for the long-term.

In the following we will give you some more information about home loans in the following cities and states of Australia:

  • Victoria
  • Queensland
  • Melbourne
  • Brisbane
  • Adelaide
  • Sydney

Options in Victoria and Melbourne

No deposit home loans Victoria



As the main state in the south of Australia, Victoria is host to some of the most beautiful cities in the entire nation. Victoria is also home to Melbourne, the capital and second largest city in the whole of Australia. It’s historical and cultural origins go back to the Aboriginal peoples, and this is apparent in the beautiful yet cultured architecture found all across the State.

The Gold Rush also played a huge part in the rise of the Victoria area, and today it’s one of the most wealthy and attractive parts of Australia because of its history of wealth and success. Living here can be expensive, especially in the capital, but with no deposit home loans Victoria can be a little bit easier to live in. There are many big name banks and firms in the Victoria are that you can get involved in that are likely to take you on as a no deposit client, or at the very least a low deposit client.

Presuming you are able to show the bank a guarantor that is reliable and trustworthy, though, getting a no deposit home loan in Victoria should be possible. Living in Victoria is easily attainable if you can prove that your financial future is secure and that you have reliable people you can use as your guarantor who will cover for you in times of hardship or difficulty.


No deposit home loan Melbourne

Getting a home loan in Melbourne, Queensland

The second largest city in the entire country, and the capital, this metropolitan masterpiece is one of the finest parts of the whole of Australia. It was, however, ranked the fourth most expensive city in the world by EIU in 2013 so living here can be quite a difficulty! Especially for first time home buyers in the area, getting settled and finding something that you can actually live in for years to come can be quite difficult.

It’s a city that has a wealth of styles and influences to it, and the variety within the city is easily apparent quickly. If you are looking to get finance to get a no deposit home loans Melbourne has many different options to you. As one of the cultural and economic hubs of the country, it’s no surprise to see the immense amounts of variety of financial institutes who are willing to back those with security.

Living in Melbourne is an incredible privilege and if you want to make the most of your surroundings then why not make sure that you get the finance you need to get the type of property that you desire most? Don’t settle for less, make sure that you get the very best that you can for the finance that you can get access to!

So long as you can provide proof that you have a reliable guarantor, then getting a no deposit home loan in Melbourne should be simple to do.

Options in Queensland and Brisbane, Adelaide, Sydney


No deposit home loans Queensland


As the second largest state in the whole country, Queensland has been hugely popular for many years and acts as a border to the Northern Territory, as well as New South Wales. The capital of the state is Brisbane and in there you will find plenty to do and see – but as well as that, you’l find plenty of beautiful homes that you can pick up for fair and honest prices. Otherwise known as the ‘Sunshine State’, this is one of the most important parts of the entire Australian map.

Queensland was first occupied by a mixture of Aboriginals and Torres Strait Islanders. The first Europeans set foot on Australia in 1606, and the East coast was claimed by the British in 1770. This was the beginning of Australia becoming what it is today. If you are looking for somewhere to stay that is going to be cost-effective but extremely attractive to live within, then there aren’t too many better places to get started with than Queensland.

It’s got the style and the class about it, so just make sure that you look around and give the wide selection of properties the time and patience that they deserve! Jumping into a decision based on where you will live is never a good idea.


The capital of Queensland, there’s nothing more enjoyable than spending your time in the bright lights and colorful themes found all across Brisbane. It’s got a population of around three million, and is one of the most upwardly mobile cities in the entire world. It’s always developing and growing, heading towards being more and more of a metropolis. It covers from the Brisbane River valley all the way down to the Great Dividing Range, but overall being part of the Brisbane community can be enormous fun. Looking at properties in the Brisbane area?

It’s all about getting your timing right and working with the right firm – so long as you can provide proof that you have a steady and comfortable working life, then being part of the culture here in Australia is going to be incredibly easy. Brisbane is open to anyone living here who is able to contribute, so going to any of the following banks might be a good idea for you – they are always looking for new customers and are happy to look into the potential of anybody’s financial future to see if you are eligible for the financial aid that you have signed up for.


Adelaide might be a bit smaller than other parts of Australia, but this open-plains area is perfect for somebody who wants to live somewhere of true temperate beauty. It’s a beautiful place to live that gives you plenty of nature to look at and other extras to enjoy. It was voted by The Economist as one of the most Livable cities in the world, voted into the top 10 between 2010-2012.

Looking to live in a modern and easy to enjoy area? Then Adelaide might be the one for you.

The best way to know is to speak to some of the finance companies that are here in Adelaide, they can all provide you with the information you need to have a more comfortable time here than you could possibly have imagined. No deposit home loans in Adelaide are easier to get than other places as it’s not quite as populated or full of rich types as the other main cities in Australia, so getting no deposit credit is possible.


Home loans in Sydney

Sydney’s beautiful skyline

Sydney is the most populous city in the whole of the Oceanic area, and is populated by just under five million people. Are you looking to live in one of the true culture capitals of the world? Then using Sydney to your advantage may be just what you are looking for. It’s got the potential to be an incredibly enjoyable venue to live in, regardless of what you are looking for or who you are moving here with.

The variety of cultures and styles means that anyone from any background could settle here in Sydney – it’s a truly beautiful place to live.

However, your best bet at getting long-term success in Sydney is to visit somewhere like a financial institution to see about getting long-term financial assistance. No deposit home loans in Sydney are quite common as long as you can show that you have a relevant and honest financial history and that you are currently employed, and would be able to meet the necessary payments.

This type of situation lets you get on the home ladder without having to waste any time, and makes perfect sense for those who want to get comfortable in a new home without shelling out the incredible fees to do so.

Low deposit home loans for people on a budget

Low deposit home loanAs has been mentioned throughout, not everybody will be eligible to pick up a no deposit home loan. Sometimes, depending on your own financial position or what you have going for yourself in terms of support via guarantors, you might be rejected for the full 100%. Remember, the economic market in Australia took a hiding when the crash occurred, and it left many firms without the resources to give out the type of blasé loans they were a few years ago.

Instead, many people are instead being offered low deposit home loans instead. These are equally as beneficial, and give you the chance to really pick up a home for a fraction of the usual price. If you go with a normal home loan, you can pay anything from 10-20% of the deposit up front. Although doing this lowers your interest payments and the amount you owe later, it can be too much for some people to actually save away. In the volatile world of short-term employment, it’s difficult for people to get the large sums of money required saved away.

However, a low deposit home loan changes all of that. Instead, you can only need to pay 3-5% of the deposit, as the financial firm will cover the rest for you. However, you might need to pay higher interest rates or a top payment of Lenders Mortgage Insurance. However, if you are able to get a guarantor to back up your credentials you can skip this type of situation entirely! It depends on the financial strength of your past and how reliable you seem on the documentation.

Make no mistake; this isn’t something that you can get just because you ask. You will have to undergo a series of extensive tests and examinations of your financial and employment history to make sure that you are up to the task. The economic crisis not only reduced the lending values, but the rates of people accepted. You might need to try out with a few banks, but low deposit home loans are becoming far more popular all across Australia and it’s very easy to see why.

A small deposit will influence your loan in a variety of ways – you will probably pay more in the long run than you would if you paid a larger deposit, but if you cannot afford this what are you supposed to do? Make sure that you can afford the payments and that you can last long-term as the owner of a property. Don’t jump into any big decisions and just go for it – this can leave you in dire financial straits. Take the time to think about the benefits of a low deposit home loan and if it suits your own financial history and earning potential.

If you have been looking on the market for a long time, though, and want to make sure that your housing future is secured now for the next twenty or thirty years then a low deposit home loan can be the perfect option for you.

Summary: How to get your home loan with no or low deposit

Home loans without depositThe best way to get yourself a low or no home deposit, then, is to make sure that you have three things:

  • A strong credit history
  • Regular employment and therefore income
  • A guarantor with a steady employment and financial history themselves, preferably with a paid up mortgage

This type of assistance can make getting the loan that you are looking for much, much easier. There’s nothing wrong with having to get involved in this type of financial arrangement – thousands of people do it every year, it’s a great long-term solution for those who need housing now and don’t want to go into the rental ladder. The only problem is that you still need to have a credible history to get the loan – it isn’t just handed out like candy as the original loans were prior to the crash.

Make sure that your financial history is going to be secure, and if you need to help get the rates down and even get rid of the Lenders Mortgage Insurance, your best bet is to get a friend or family member involved that can help you actually achieve what you are looking for. Using them as a guarantor can immediately dwarf the interest rates and extra payments that you would need to be dealing with. They can help reduce everything, and can even be the difference between getting a No Deposit or a Low Deposit home mortgage.

Whatever you are looking for, having somebody who can vouch for you is very important – it gives you more credibility and makes your life in general much easier to actually put in place. With no large deposits to save up, and a monthly amount to pay back instead, it can be much easier to start building your future starting today in the home that you have long dreamed of living in.


About the author

Jonathan Heart

Hello, I'm Jonathan Heart. I'm an accountant by day and a financial enthusiasts / investor by night who invests primarily in Australian real estate and blue chip shares. I live in Sydney and I thoroughly enjoy spending my spare time reading and writing about all things related to finance in Australia.

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