Q: What’s the lowest deposit for home loans?
- 5% deposit
In Australia, it’s possible to secure a home loan with a deposit as low as 5% of the purchase price of the property. However, keep in mind that a low deposit typically means you’ll need to pay Lenders Mortgage Insurance (LMI), which is a one-off insurance premium designed to protect the lender in case you’re unable to repay your loan.
- 10% deposit
A 10% deposit is another common option for home loans in Australia. With a 10% deposit, you’ll still need to pay LMI, but the premium will be lower than if you had a 5% deposit.
- 20% deposit
A 20% deposit is considered a standard deposit for home loans in Australia. With a 20% deposit, you won’t need to pay LMI, which can save you thousands of dollars in insurance premiums.
- First Home Loan Deposit Scheme
The First Home Loan Deposit Scheme is a government initiative designed to help first-home buyers enter the property market. Under this scheme, eligible borrowers can secure a home loan with a deposit as low as 5% without paying LMI, as the government provides a guarantee for the remaining 15% of the deposit.
- Guarantor Home Loan
If you don’t have a sufficient deposit, you may be able to apply for a Guarantor Home Loan. This type of home loan allows a family member or friend to act as a guarantor for your loan, using their own property as security. This can help you secure a home loan with a lower deposit or no deposit at all.