No Deposit Home Loans: How to Secure Your Dream Home

No Deposit Home Loans

Are you currently saving to buy your first home? If so, are you feeling intimidated by how much money you think you need to save? You’ve probably heard that you need a pretty sizable deposit before you can start applying for a home loan. But this is easier said than done. Fortunately, there are alternative options available, like no deposit home loans.

To avoid Lenders Mortgage Insurance (LMI), you’ll usually need a deposit of at least 20%. And a 20% deposit on a median-priced home in Australia now translates to a whopping $135,700! According to PropTrack’s Housing Affordability Report for 2023, if you’re an “average-income household”, it will take you 5.7 years to save that much money. And those savings are only achievable if you’re putting away 20% of your total household income (something that is increasingly difficult to do with the rising cost of living). 

No Deposit Home Loans in Australia

Woman stopping from breaking piggy bank after hearing about no deposit home loans

At this point, you may be thinking, “A no deposit home loan sounds too good to be true!” And you’re right to be sceptical. In Australia, there are now very few no deposit home loans on offer. Those that are available typically come with eligibility criteria so strict it’s almost impossible to achieve. 

Additionally, a home loan with no deposit is considered to be a “high-risk” loan, meaning it will usually come with much higher interest rates and fees. Fortunately, it’s not all bad news. There are some competitive home loan products available to borrowers who have minimal or even no deposit savings.

Can I Apply for a No Deposit Home Loan?

There are several good options available to borrowers who haven’t been able to save up a home loan deposit. These alternative solutions can potentially give you the best of both worlds: a viable mortgage product from a reputable lender but without the need for a 20% deposit. 

However, as with any kind of loan, individual lending criteria apply. So, if this is something that you’re interested in, the best thing to do is speak directly with a mortgage broker. An experienced broker will be able to talk you through the various options available and help you identify which one is best for you.

What Kind of No Deposit Home Loans Are Available?

While there are a few different kinds of no deposit home loans available, a good tip is to look for ones that don’t require Lenders Mortgage Insurance (LMI). If a borrower hasn’t saved up a 20% deposit, then most lenders will view them as being at a “higher risk” of defaulting. 

Because of this, most lenders will charge Lenders Mortgage Insurance on any loans that borrow more than 80% of the property purchase price. LMI is an insurance policy that the lender takes out to cover any potential losses that may result from you defaulting on your mortgage.

If you haven’t got a 20% deposit saved, then some of the best options available include:

  1. Applying for a guarantor home loan
  2. Taking advantage of government grants for first home buyers
  3. Using a monetary gift from a third party
  4. Utilising superannuation funds
  5. Accessing equity

These are all seen as good options because they make it possible for you to get a mortgage without having to pay for Lenders Mortgage Insurance (LMI).

No Deposit Home Loans Without Lenders Mortgage Insurance (LMI)

Happy couple getting news of no deposit home loan approval

As we’ve already discussed, you have a few different no deposit loan options available. However, each option comes with different lending criteria and various pros and cons. This is why it’s important to thoroughly assess all of your options before making a final decision.

1.   Guarantor Home Loans

This is considered to be one of the best options for Aussie homebuyers who haven’t yet saved up a deposit. A guarantor mortgage is when a family member or friend offers the equity in their property as security for your home loan. 

For example, if your parents own their own home, they can sign on as guarantors for your loan. With a guarantor, a first home buyer may be able to borrow up to 105% of the purchase price, making it easier to cover transfer duty and other associated costs.

2.   Government Grants

If you’re a first home buyer, you can take advantage of government initiatives to jumpstart your home buyer’s journey. These include the First Home Loan Deposit Scheme (which allows you to apply for a mortgage with a 5% deposit and remain exempt from paying LMI) and the First Home Owner Grant.

3.   Monetary Gifts

Some lenders may accept this type of deposit (funds you didn’t save up yourself) provided you can prove the money was a gift and you’re not expected to pay it back. This could include a cash present from your parents, an inheritance or any money that you’ve won.

4.   Superannuation Funds

The First Home Super Saver (FHSS) scheme allows you to use voluntary contributions from your superannuation fund as a deposit for a home loan. Alternatively, if you have a Self-Managed Super Fund (SMSF), you can use your superannuation funds to borrow up to 80% of the purchase price.

5.   Accessing Equity

Some lenders will accept home equity as a deposit. If you already own a house and have built up enough equity, you can use that equity as a deposit to buy an investment property.

Talk to a Broker About No Deposit Home Loans

The ability to apply for a home loan, without having to save for a deposit first, means owning your own home could be more achievable than you think. But no deposit home loans do come with certain risks and restrictions, so it’s important to start with the right advice. 

If you’re ready to get a foot on the property ladder, then contact the home loan experts at Sunshine Coast Financial Solutions. Our experienced team of mortgage brokers will happily answer your questions and provide free advice tailored to your financial situation.

Give us a ring at (07) 5437 9073 or schedule an appointment to discuss your options.

 

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What our Clients Say

Sunshine Coast Financial Solutions - Mortgage BrokerExcellentSunshine Coast Financial Solutions - Mortgage Broker5.0 Based on 490 reviews fromSee all reviews review us onHeidi BlattnerHeidi Blattner ★★★★★ Excellent service, fast and efficient. I have been using the SCFS team for years and recommend them to anyone for finance solutions. You lean back and relax while they do the hard work and find you the best deal. Very happy 😊Jesse SkinnerJesse Skinner ★★★★★ Today is approval day something I did not think I would be doing in this day and age with how life has been but thanks to the team at SCFS it's all been made possible and easy couldn't recommend a greater team, will definitely be using them for my next few housesSarah FosterSarah Foster ★★★★★ I've been using Sunshine Coast Finance for a number of years over which time they have taken care of the finance for 3 properties, I can't recommend them enough.Mick & Amy LongMick & Amy Long ★★★★★ On behalf of my wife and I, We highly recommend Chris and his team for your financial needs. They made our process feel smooth and enjoyable, and we will definitely be returning in the future for their services.Kayla CochraneKayla Cochrane ★★★★★ My husband and I have worked with Daryl for a while now and the experience has been nothing but beyond exceptional. The work he puts in to help us is incredible. We would be lost without his expertise and guidance. We couldn’t recommend Sunshine Coast Financial Solutions more highly.Francesco PiccardoFrancesco Piccardo ★★★★★ It was the first time for me to buy a house. I really had no idea how complicated it is. The Sunshine Coast Financial Solutions team support was amazing; they took care of everything and negotiated a very convenient interest rate. The communication was also fantastic. Great result with a minimum effort. Highly recommendedJack HindsonJack Hindson ★★★★★ Mick SheardMick Sheard ★★★★★ Steve SmithSteve Smith ★★★★★ Tracey BrewsterTracey Brewster ★★★★★ Absolutely amazing service. From start to finish the communication was 100%. We were kept up to date throughout the entire process and always felt supported. Daryl was so easy to talk to, responded to every question we had and I cannot thank him enough, we really appreciate all that he did for us. I will not hesitate using their service again in the future and have passed on their details to friends! Thankyou again for everything!Ben BrewsterBen Brewster ★★★★★ Excellent professional and friendly service, excellent communication, kept us informed throughout process. Highly recommendSerena AndersonSerena Anderson ★★★★★ The team at scfs are awesome. Thank you so much for making my home refinance a breeze. I've been asked by few people now, how I got this so quickly. I said "my broker is the gun". Thank you so much Chris, Shanina, Adam, Daryl and Tracey, for all your hard work, and dealing with me. Definitely 5 stars👍Aimee BiceAimee Bice ★★★★★ I highly recommend Chris and his team @ SCF Solutions to anyone going through a divorce or any other life transition that involves financial decisions.Chris’s expertise, practical approach, and easy-going nature provided the clarity I needed to make informed decisions about my financial future. Chris’s open and honest manner empowered me with a strong understanding of my financial position and lending capability which eased the burden associated with the division of the matrimonial home. He treated me like a priority and provided valuable guidance and support every step of the way as I navigated through an emotionally challenging time.Communication during critical times in the process such as loan approval and settlement was outstanding, even when this fell over the Christmas/New Year period. Someone from his team was always available to answer any questions or concerns and provide reassurance when needed.Second time I have engaged Chris over the past 8 years, and I can proudly say I will remain a lifelong customer!If you want the best possible mortgage to suit your specific financial situation then you can’t go past Chris and his team.Jill EllisJill Ellis ★★★★★ Chris and his staff members are always very helpful and informative.Callum EllisCallum Ellis ★★★★★ Another brilliant experience with the SCFS team. Excellent from start to finish - thanks so much Chris and the team 👍Melissa FreemanMelissa Freeman ★★★★★ Excellent, thank youRyan76314Ryan76314 ★★★★★ My partner and I had Jo and Shanina from SCF help us with our home loan, everything was quick and effortless which is what we wanted. Highly recommend them!We also just had a 1 year review from Tracey and she ensured we were still getting the best rate :)AmyAmy ★★★★★ Chris and his team have helped me again to buy a property which was a stress free and quick process. I have complete trust in Chris and would highly recommend his business.BaykaiBaykai ★★★★★ Chris and the team have been very helpful throughout the process keeping me informed every step of the way.SCF saved me lots of money from my current loan and will keep an eye on it from now on.Well done teamDanica RizzoDanica Rizzo ★★★★★ Adam and the team made our process super easy and they were very helpful. Would definitely recommend them ☺️stacey angelidesstacey angelides ★★★★★ Chris and his team made financing our new home purchase a smooth process that left nothing to chance. With his support we were able to confidently bid on and secure our dream home and he made sure we had the very best deal we could achieve in record time.Chris coached us through each step and was always available to answer our questions and provide guidance when we needed it.Overall his team is professional, friendly, helpful and always approachable.We couldn't have achieved the result we did without his help and we would definitely use his services again.We can thoroughly recommend Sunshine Coats Financial Services and Chris Wilson to anyone looking to arrange their finance. You won't be disappointed!Tom PearceTom Pearce ★★★★★ Chris & the team have been fantastic from start to finish. Patient, professional & supportive throughout the whole property purchasing journey. They have gone above and beyond to help me into a property, I am very happy with my experience from start to finish. I can’t speak highly enough of their transparent and professional approach.Joy DyerJoy Dyer ★★★★★ Once again, Chris and the team at SCF have provided us with excellent service. They are professional, efficient and always available to answer questions and concerns. We would highly recommend them.Ersen TuzluErsen Tuzlu ★★★★★ I recently purchased my home using the SCF Solutions for my financial needs, and I must say that I had a fantastic experience. The person who handled all my transactions on my behalf, Daryl Hermann, was extremely meticulous and efficient. His attention to detail and promptness in completing all the necessary tasks left me truly grateful. I highly recommend SCF Solutions for anyone in need of financial services. Thank you, Daryl, and the entire team at SCF Solutions for your outstanding support!Alan MurrayAlan Murray ★★★★★ Chris and his team were absolutely fantastic.Clear and transparent from the start, SCF made the experience of buying our home seamless.Highly recommend SCF for your lending solutions.Craig JenkinsCraig Jenkins ★★★★★ So much thanks to Chris and the team at SCFS. We had a very difficult and compressed settlement subject to many finance extensions. The whole way through the journey the whole team were absolutely professional and got us into our new home.I Very highly recommend there services toAll.Your sincerelyCraig Jenkins & Katherine ThompsonJustin WijayaJustin Wijaya ★★★★★ Adam and the team at SCF have been fantastic in finalising my re-finance. Adam provided insightful knowledge on lenders that would be more suited to my situation and the best avenues to go forward with. He achieved my expected result within a really short timeframe. No question was too silly. Can’t recommend Adam enough.Amie FitzgeraldAmie Fitzgerald ★★★★★ The team were amazing to work with. They made the process so easy, kept us updated on the process and gave us multiple options to achieve our goals. Couldn’t recommend them enough!!Peter NotmanPeter Notman ★★★★★ Chris and the team make it so easy and hassle free. Cannot recommend them highly enough and wouldn't use anyone else apart from them.Candice ShippCandice Shipp ★★★★★ Chris is very professional and always does everything to help us out!Sonia LynchSonia Lynch ★★★★★ Chris and the team were fantastic in helping us get our mortgage for our first home in Australia. They helped us through the process and were supportive, attentive and helpful throughout the entire process. I would heartily recommend SCF!Elliot BakerElliot Baker ★★★★★ Chris was great to deal with, straight to the point and got what we needed done. Explains everything you need to know in detail.Extremely happy with the outcome 👌🏻Tony DavisTony Davis ★★★★★ I am a repeat client of Chris and his team. In every experience I have had has been 100% positive. Chris and his team do everything possible to make every step through the process explained and run smoothly. I highly recommend anyone looking to finance or refinance to talk to Sunshine Coast Financial Solutions.Sam McGuireSam McGuire ★★★★★ the scfs team were fantastic from start to finish in getting my new loan. Nothing was a problem for them. Getting everything sorted very fast. Very fast replies and always keeping you updated.I can't recommend daryl and the team enoughThanks againFleur BrennetFleur Brennet ★★★★★ Chris, Shanina and the rest of the team were so super helpful, understanding and really got the best rate for me! Not only that their communications were so clear, consistent and they were always available for help and advice! Would highly recommend to anyone!! Thank you team!!Daniel SwartDaniel Swart ★★★★★ SCFS have assisted us with brokerage a few of times now and Chris, Matt, Shanina and the team have been fantastic every time!Brooke ThomasBrooke Thomas ★★★★★ We recently worked with Chris and his exceptional team. The experience was nothing short of magical – the team worked seamlessly to navigate the complex world of mortgages. Their expertise and dedication made the entire process smooth, leaving us thoroughly impressed. I highly recommend this team for anyone in need of mortgage assistance.Jarryd duffyJarryd duffy ★★★★★ Another positive experience with Chris and the team. We won't go anywhere else after dealing with Sunshine Coast Financial. Honesty and transparency as always.Teagen AllisonTeagen Allison ★★★★★ A huge thank you to Chris and the team who helped us secure a loan in only 2 days.We sent the enquiry last Monday and by Wednesday had the approval.Chris and the team even managed to secure us a better interest rate.Incredible service as always. Hassle free and such an easy process.We cannot recommend enough.Matthew TerrillMatthew Terrill ★★★★★ Proactive and excellent to deal with, would recommend highly to anyone.CSCS ★★★★★ Daryl helped with refinancing my home loan. The whole process was quick, seamless and very professional. I would highly recommend SCFS for their services and diligent work.Simon RoperSimon Roper ★★★★★ Chris and his team are consummate professionals, with incredible knowledge of the finance industry. Found us the best deal quickly and had approval in record time. These guys are a must if you want finance without fuss. We cannot speak highly enough of this Company.Luke RyanLuke Ryan ★★★★★ Chris and his team went above and beyond. We were first time home buyers and knew nothing about mortgages and the purchasing process. The process was made simple and stress free by the SCFS team.We purchased a property just before Christmas and Chris & his team were prompt and efficient and worked hard to make sure everything got over the line before the holiday period hit.I can confidently recommend their services. The real bonus here is that this is all at no cost to the purchaser. I will be using SCFS for any future loans and recommend their services without hesitation. Get around it and give them a call.Janine JGJanine JG ★★★★★ Chris and all the team at Sunshine Coast financial solutions have been absolutely fantastic. I cannot fault their service, professionalism and assistance with all my financial needs when I was obtaining finance.. refinancing and buying land. I'm not savvy at all in the finance area so the staff were incredibly helpful and highly efficient at getting me all the information I needed and helped me to understand what I was doing. I highly recommend them to anyone who needs help in this area. Thanks to Shanina especially... You really know your stuff and I couldn't have done all of this without you.Emily HallEmily Hall ★★★★★ My partner and I recently worked with Daryl, Chris and the team at SFC solutions and I just have to rave about them! They made the whole mortgage process a breeze. From the moment I reached out, they were super responsive and attentive to all my questions. They really took the time to understand my financial situation and goals, which made me feel confident in their expertise. They guided me through each step, explaining everything in simple terms. I couldn't believe how smoothly everything went. Working with Daryl, Chris and the team took the stress of being first time buyers away. If you're in the market for a mortgage, I highly recommend giving them a call. They're the best!Sarah FairleySarah Fairley ★★★★★ The team were fantastic. We got an appt the next day and they started working on getting us finance straight away. Such good communication, so friendly and went the extra mile for us, definitely recommend!!Des EichmannDes Eichmann ★★★★★ Damon AveryDamon Avery ★★★★★ That's team,Made it so easy, great communication, will be back when we need to refinance again!!!Tiaki ChaplinTiaki Chaplin ★★★★★ Thank you Chris & Team! You’ve done it again. It’s been 2 years since we first approached Chris at SCFS to assist us with remortgaging our home at the time which he did and we had an exceptional experience. We have since moved entering the market again recently and we would never go anywhere else, this time is no exception to the last - another exceptional experience. Chris and his team are so professional, incredibly efficient and extremely knowledgeable not to mention down to earth. I would recommend Chris and his team at SCFS to anyone requiring mortgage assistance and I would even go as far as to say that you’re mad if you don’t. Thank you for making our dreams come true, yet again. So bloody grateful guys! Thank you! 🙏kelvin scottkelvin scott ★★★★★ Chris, Matt and the team at Sunshine Coast Financial Solutions were incredible throughout the whole process! Guided us through step by step and we're happy to answer any questions and give advice. Super quick to respond and reassured us confidently as we navigated applying for a home loan.js_loader