Low Deposit Home Loans

Gain access to your own home more swiftly with a deposit as low as 2% of the property value. Discover the workings of low-deposit home loans.

Low-deposit home loans are tailored to expedite your homeownership journey, enabling you to purchase a property with a deposit as minimal as 2% of the property value. The reins of homeownership are now within your grasp.

Let’s explore the pathway to acquiring your property sooner through a low-deposit home loan.

How Do Low-Deposit Loans Operate?

With borrowers providing a reduced deposit, their Loan-To-Value Ratio (LVR) tends to be higher, often necessitating the payment of Lenders Mortgage Insurance (LMI) to protect the lender in case of borrower default.

Once approved for a low-deposit home loan, you can enjoy competitive interest rates similar to those offered to individuals with a 20% deposit. This means that despite your smaller deposit, you won’t face higher interest rates as a penalty.

Details:Low-Deposit Home Loan: 5%Traditional Home Loan: 20%
Required DepositYesNo
Lenders Mortgage Insurance (LMI)Low-Deposit Home Loan: YesTraditional Home Loan: No
Time To HomeownershipQuicker entry into the property marketLonger savings period required
  Traditional Home Loan: Tips on buying your first home sooner
How Much Deposit Do I Need?

Typically, you’ll need at least 5% of the property value, which is the minimum accepted by most lenders. However, we work with lenders on our panel who offer flexible options, allowing you to qualify for a home loan with a deposit as low as:

  • 3%
  • 5%
  • 10%
  • 15%

Government Assistance for Low-Deposit Buyers In addition to lender offerings, the government provides various schemes and grants to help you become a homeowner sooner. These include:

Home Guarantee Scheme:
    • First Home Guarantee
    • Regional First Home Buyer Guarantee
    • Family Home Guarantee This scheme involves a guarantor arrangement where the government guarantees loans, enabling eligible buyers to avoid paying Lenders Mortgage Insurance (LMI) even with a deposit as low as 2% of the property value.
Help to Buy Scheme:
    • The government assists first-home buyers by contributing up to 40% of the property price for a new home and up to 30% for an existing one.

Qualification Criteria To increase your chances of approval for a low-deposit home loan, consider the following criteria:

  • Stable income: Lenders closely evaluate your income as it determines your capacity to make mortgage repayments.
  • Loan purpose: Your intended use for the home loan, such as purchasing, refinancing, or building an owner-occupied or investment property, may be considered.
  • Property restrictions: Some restrictions exist on property types and locations for low deposit home loans.
  • Clean credit history: A clean credit record with no late payments on personal loans, credit cards, or rent is essential.
  • Genuine savings: Most banks require at least 5% of the purchase price in savings accumulated over a minimum three-month period.
  • Reasonable assets: A relatively high level of assets, including vehicles, jewelry, and savings, is favorable.
  • Stable employment: Lenders prefer applicants with a long-term, stable job history.
  • Low debt levels: Ensuring your unsecured debts do not exceed 5% of the property’s purchase price is important.

Interest Rate Discounts Special arrangements with our lenders allow us to offer interest rate discounts:

  • 10% deposit: Enjoy a 1.20% to 2.37% discount on loans over $500,000.
  • 5% deposit: Access the same deal with specific requirements and limits.
  • 3% deposit or less: Our focus will be on getting you approved with less negotiating power.
  • 15% deposit or more: With a larger deposit, our brokers have more negotiating power.

Find out if you’re eligible for an interest rate discount by completing our free assessment form.

A low deposit home loan is a type of mortgage that allows you to purchase a property with a smaller deposit, often less than the standard 20%. These loans are designed to help individuals enter the property market with a more manageable upfront payment.

While the specific deposit requirement varies among lenders, most low deposit home loans allow you to borrow with a deposit as low as 2% to 5% of the property’s purchase price. However, it’s essential to note that a smaller deposit may result in additional costs, such as Lenders Mortgage Insurance (LMI).

Lenders Mortgage Insurance (LMI) is a type of insurance that protects the lender in case the borrower defaults on the loan. For low deposit home loans, LMI is typically required when your deposit is less than 20% of the property’s value. The cost of LMI varies depending on the loan amount and deposit size.

Yes, several government schemes and grants aim to assist low deposit home buyers. For example, the Home Guarantee Scheme offers various guarantees, including the First Home Guarantee, which can help you avoid paying LMI with a deposit as low as 2%. Additionally, the Help to Buy Scheme provides support by contributing to the property price, making it more accessible.

Eligibility criteria may vary among lenders, but some common factors include:

  • Stable income to demonstrate your capacity to make mortgage repayments.
  • Clean credit history with no significant late payments or defaults.
  • Property restrictions that may limit the types of properties or locations eligible for low deposit loans.
  • Reasonable assets, such as savings or valuable possessions.
  • Stable employment history, often requiring full-time employment.
  • Low debt levels, with unsecured debts not exceeding a certain percentage of the property’s purchase price.

Some lenders offer interest rate discounts for borrowers with specific deposit amounts. For example, you may be eligible for a discount if you have a 10% deposit or more. The amount of the discount and specific conditions can vary, so it’s essential to inquire with your lender or mortgage broker about available discounts.

Choosing The Right Lender Matters

The choice of the right lender is of utmost importance, as it can significantly impact your application’s success and determine whether you secure an excellent deal or settle for what traditional banks offer low deposit borrowers.

Different banks can offer substantial variations in factors like interest rates, discounts, and terms, such as the possibility of waived Lenders Mortgage Insurance (LMI). A skilled mortgage broker with expertise in credit and established relationships with numerous lenders can empower you to negotiate and obtain the most advantageous mortgage terms.

Apply For A Low-Deposit Home Loan Today!

Take the first step toward securing a low-deposit home loan today! Connect with one of our specialists in low documentation home loans by dialing 1300 401 847 or completing our complimentary assessment form now.

Our Approach to Finding the Ideal Solution for You

We begin by gaining a comprehensive understanding of your current circumstances and your long-term objectives. Our process is designed to provide you with a tailored recommendation, and it's as simple as following these few steps:


Start by filling out our free assessment form or giving us a call.


Our team will carefully evaluate your unique financial situation.


We thoroughly examine the various options available through our network of trusted lenders.


The end result? We'll pinpoint the most fitting and advantageous home loan offers for you.

Clients Love


Highly recommended. Irfan is an incredibly knowledgeable and professional broker. Irfan was able to help us every step of the way in our journey to buying our first home.

Lesile Morgan Happy Client

Irfan helped us qualify for first time home loan program. He informed us about home loan guarantee program offered by state. We paid just 5% deposit and no lender mortgage insurance. Amazing!

Brandon Zales Happy Client

Clear Pacific was able to provide true zero cost loan for refinancing our home mortgage. We wanted to get fixed rate mortgage in this rising interest rate market. Thanks you john.

Alex Kamarl Happy Client
95% of our borrowers get a discount below the bank standard variable rate
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