Can I Get a Home Loan With No Deposit in Australia? (2026)

Updated

Can I Get a Home Loan With No Deposit in Australia? (2026)

Buying a home with no deposit in the traditional sense is not available from mainstream Australian lenders — a deposit is required. However, there are legitimate pathways that allow some buyers to purchase with a very low deposit (2–5%), with government support or family assistance covering the gap. Understanding what is actually available avoids expensive mistakes.

The Reality — No True Zero-Deposit Loans

Australian lenders are required under responsible lending obligations to assess a borrower’s genuine savings and capacity to repay. A 100% mortgage (no deposit at all) is not available from mainstream lenders in Australia — and has not been since the GFC.

What IS available:

  • Low-deposit loans (5% deposit)
  • Government-backed schemes that eliminate LMI on low-deposit loans
  • Guarantor loans (family equity used instead of your savings)
  • Government rental or social housing-linked purchase pathways (limited)

Option 1 — Government First Home Guarantee (5% Deposit, No LMI)

The First Home Guarantee (formerly First Home Loan Deposit Scheme) allows eligible first home buyers to purchase with as little as a 5% deposit — with the Australian Government guaranteeing the remaining portion to 20%, eliminating the need for Lenders Mortgage Insurance (LMI).

Key eligibility:

  • First home buyer (must not have previously owned property in Australia)
  • Australian citizen or permanent resident
  • Income limit: $125,000 (single); $200,000 (couple) per year
  • Property price cap varies by state and city (typically $700,000–$900,000 in major cities for 2024–25)
  • Must intend to live in the property as owner-occupier

Benefit: A 5% deposit on a $700,000 property is $35,000 — compared to the $140,000 that would otherwise be required for an 80% LVR loan.

Option 2 — Guarantor Loan (Using Family Equity)

A guarantor loan allows a family member (typically parents) to use equity in their own property to guarantee your loan — allowing you to borrow without a deposit (or with a very small deposit).

How it works:

  • Your parents own a home with sufficient equity
  • They provide a security guarantee over a portion of their property
  • This guarantee replaces the LMI that would otherwise apply
  • You borrow up to 100% of the property purchase price (effectively)
  • As you repay and build equity, the guarantor’s security can be released

Key risks for the guarantor:

  • If you default, the guarantor’s property is at risk
  • The guarantor should get independent legal advice before signing
  • Lenders assess whether the guarantor can service the guaranteed portion if required

Option 3 — Regional First Home Buyer Guarantee

Similar to the First Home Guarantee but specifically for buyers in regional areas. Allows eligible regional first home buyers to purchase with a 5% deposit with no LMI. Place numbers are limited — check NHFIC (Housing Australia) for current availability.

Option 4 — Family Home Guarantee (Single Parents)

The Family Home Guarantee allows eligible single parents (not necessarily first home buyers) to purchase with a 2% deposit, with no LMI. Available to Australian citizens who are single parents with at least one dependent child.

Property price caps apply (similar to First Home Guarantee). Income threshold: $125,000/year.

What You Still Need (Even With These Schemes)

Even with a 5% deposit scheme or guarantor loan, you need:

  • Stamp duty (unless you qualify for a first home buyer exemption or concession in your state — see Stamp Duty Australia Guide)
  • Legal fees and conveyancing ($1,500–$2,500)
  • Building and pest inspection ($700–$1,200)
  • Moving costs
  • Lender fees (application fee, settlement fee)

Many first home buyer stamp duty concessions exist — in some states first home buyers pay no stamp duty up to certain price thresholds.

The Risk of Low-Deposit Borrowing

Negative equity risk: Buying with a 5% deposit means 95% LVR. Any fall in property values could put you in negative equity (owing more than the property is worth). This is manageable if you stay in the property long-term — but creates difficulties if you need to sell within the first few years.

Repayment pressure: A high LVR loan means a larger loan balance and higher repayments. Ensure you have a genuine buffer for rate rises, income changes, or unexpected costs.

Frequently Asked Questions

Is there such a thing as a no-deposit home loan in Australia?

True no-deposit (100% LVR from a mainstream lender) is not available in Australia. The closest option is a guarantor loan, which allows you to avoid a deposit using family equity — but the loan amount still reflects the property’s full value.

Can I use a personal loan as a deposit?

Some buyers attempt to use personal loans as a deposit. Most lenders treat this as additional debt (not genuine savings) and assess it in serviceability — effectively worsening your position. Many lenders specifically ask whether any part of the deposit is borrowed.

What is genuine savings?

Most lenders require at least 5% of the purchase price in “genuine savings” — funds that have been in your account for at least 3 months, evidencing your savings ability. Gifts, inheritance, and some government grants may or may not qualify depending on the lender.

This article provides general information about low-deposit home loan options in Australia. Scheme availability, income thresholds, and property price caps change regularly. Check the Housing Australia (NHFIC) website for current details and speak with a licensed mortgage broker. Find one through MoneySmart.