For many first home buyers, the ideal 20% deposit is just too hard to build. After many years of saving and following all the tips out there to pool extra money, you still don’t have enough to jumpstart your homeownership journey.

But what if we tell you that there are other options you can explore to buy a house with less than a 20% deposit? How about with no deposit?

Yes, these are possible, and we’ll tell you how through this video.

Video Outline

How to Buy a Home with Low or No Deposit?

Low or Zero Deposit Home Loans

Guarantor Home Loans

First Home Guarantee (FHBG)



How to buy a home with low or no deposit First home buyers, here’s how you can buy a home with low or no deposit. If you’re a first home buyer, you might be struggling to save up for your first deposit but what if I told you that you could buy a dream home with little or even no deposit? That’s right, there are strategies you can use to achieve your home ownership goals sooner. Buying a new home can be an exciting experience but the daunting 20% deposit.

Low or Zero Deposit Home Loans


can put a damper on things. Fortunately, there are still options available to help you purchase your dream home without having to pay such a large upfront amount. Yes, there are loans that require low or even zero deposit but it’s important to understand the terms that come with them. So you might be wondering, what’s the difference between these types of loans and normal ones. Well the main difference is that with low or no deposit loans, the lender will usually require you to get and pay for Lenders Mortgage Insurance if the loan covers more than 80% of the property’s value. This means that in the long run, you may end up paying more for your home than you would with a regular home loan.

The cost of LMI varies and often depends on the price of the property you’re buying so working with an experienced mortgage broker especially one who has specialises in Low and No Deposit Home Loans can help you secure a competitive rate for your mortgage insurance. But if you’re looking to potentially avoid paying mortgage insurance altogether, there are strategies that you can use to get into your new home sooner. Let’s discuss these options in more detail. The first option is the Guarantor Loan. A guarantor loan requires a family member to

Guarantor Home Loans


vouch for you by providing equity in a property asset they already own.They will guarantee the equity for the equivalent of the 20% deposit. Just keep in mind that with this option, you’ll need to have a borrowing capacity that equals the full purchase price of the property. Guarantor loans also enable you to borrow the associated costs with purchase such as Stamp Duty and legal fees, if applicable. For example, Jake and Caitlin burst home buyers who wanted to purchase their first property in Sydney worth a million dollars.

They didn’t have any deposit saved however, Jake’s father had a property with available equity and was happy to act as a guarantor. As a result, Jake Caitlyn were able to borrow the full purchase price plus the forty five thousand dollars in associated costs. This removed the requirement of them needing to save the usual 20% deposit of two hundred thousand dollars.

One of the biggest benefits of guarantor loans is that it can help avoid paying lenders mortgage insurance altogether but, you have to keep in mind that you’ll need to have someone in your inner circle who is willing to help. With a guarantor loan, you can finally make the dream of home ownership a reality with the added security of having someone you trust by your side. Let’s move to the second option. The first home guarantee or the FHBG. If you’re a first home

First Home Guarantee (FHBG)


buyer in Australia, the FHBG program can help you buy your dream home sooner. It’s part of the home guarantee scheme run by the federal government and it guarantees part of your home loan, if you’re eligible. Basically, if you get a home loan from a bank that’s part of the program, the government will guarantee part of the loan for you. This means that you can put down as little as a 5% deposit without needing to pay lenders mortgage insurance. But it’s necessary to note that the FHBG guarantee is not a cash payment or deposit for your loan. Instead, it’s simply a guarantee that the National Housing Finance and Investment Corporation, the NHFIC, will cover part of your mortgage repayments if you can’t make them.

The FHBG places are limited for July 1, 2022 to 30th of June 2023 which is soon, there are only 35,000 places available for eligible first home buyers. So if you’re considering applying for the FHBG, it’s best to act quickly to avoid missing out on this opportunity. Making the decision to buy a home can seem overwhelming, especially when you don’t have a lot of money to put down. But with careful planning and research, buying a home with little or no deposit is more than possible.

Please remember that while there are many options available, they all come with different benefits and costs. To make the best possible decision for your specific needs, we strongly recommend seeking advice from a reliable home loan specialist. They’ll be able to provide you with the choices that match your financial situation and lifestyle. If you have any questions or comments, please feel free to leave them below.

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