Do you have a 5% deposit ready? This home loan might work for you

Woman first home buyer

As property prices continue to surge at record rates, saving for a first home deposit has only gotten harder. New research reveals that Sydneysiders are feeling this financial strain the most, with a $100,000 deposit no longer enough to fetch them a median-priced property. 

According to online lender, home buyers in NSW with a 5% deposit of $100,000 may only be able to fund properties of up to $780,000. This falls a massive $115,933 short of the current median property price for Sydney. 

Meanwhile Victorian buyers with the same-sized deposits are estimated to be able to afford properties of up to $710,000 - just shy of Melbourne’s median price of $717,767. 

However, for all other capital cities, home buyers with a 5% deposit of $100,000 could comfortably buy a median-priced property in the area.

Capital cityMedian property priceWhat you can afford with a 5% deposit of $100kWhat you can afford with a 5% deposit of $50k
Darwin$438,645$675,000$380,000’s calculations include “hidden costs” that typically get subtracted from your home deposit, including legal fees, stamp duty and lenders mortgage insurance (LMI) - the latter of which is usually required if a borrower has saved up less than 20% of the property value.’s chief executive officer, Scott McWilliam said the growing unaffordability of properties is a concern for first home buyers. 

“The heat in the housing market has left many first home buyers anxious about getting priced out of buying their dream home," he said. 

“As a result, borrowers are looking to other solutions, such as the bank of mum and dad, to help them get a foot in the door.”

How to fast track your property plans 

Indeed guarantors - whether that’s your parents or the government under the First Home Loan Deposit Scheme - are the main way for first home buyers with smaller deposits to avoid LMI and lower their barriers of entry into the property market.  

But what about borrowers who aren’t able to secure a guarantor? has just launched a new home loan product called ‘Quickstart’ which offers an alternative solution.

Instead of taking LMI out of the first home buyer’s deposit, Quickstart includes part of this cost in the loan itself. This would essentially increase the borrower’s maximum loan-to-value ratio (LVR) from 95% to 98%. 

According to’s numbers crunch, this boost in borrowing power means a $100,000 deposit in Victoria could now be enough for you to buy a property at Melbourne’s median price. And a $50,000 deposit could get you a median-priced property in Brisbane or Darwin. 

Let’s break down the numbers: 

  • The Quickstart loan could help Victorian buyers with a $100,000 deposit afford properties up to $740,000, which would cover Melbourne’s median price of $717,767. 
  • Quickstart could enable Queensland buyers with a $50,000 deposit to afford properties up to $537,000, which sits above Brisbane’s median price of $535,618. 
  • Quickstart could also allow North Territory buyers with a $50,000 deposit to afford properties up to $445,000, which exceeds Darwin’s median price of $438,645. 

So how does Quickstart work? 

“We have developed Quickstart with unique features that help borrowers accelerate their purchase plans,” McWilliam explains.

"By accepting deposits as little as 5%, accommodating part of the lenders mortgage insurance in the total loan amount (up to a total of 98% of the property value), and [offering] flexibility on the source of the deposit, borrowers have the option to move quickly and secure the home they want sooner rather than later,” he says. 

Under the Quickstart loan, there may be no need for first home buyers to provide proof of genuine savings. Given that they can demonstrate six months’ rental history, they can sidestep the standard requirement to keep their deposit inside their bank account or savings account for three months. This means they’ll be able to use money from cash gifts or inheritances for their deposit instantly. 

The Quickstart loan is available to borrowers with a 90-95% LVR at variable rates from 3.59% p.a. (3.61% p.a. comparison rate*) for owner occupiers making principal and interest repayments. LMI is capitalised up to 98% LVR. 

Just remember to weigh up the higher costs that will likely come with low deposit home loans - namely, higher monthly loan repayments and more interest accrued over the life of the loan. 

For more information, read our article on the pros and cons of buying property with a 5% deposit. Or scroll down below for a snapshot of other first home loans.

You can also check out even more offers for first home buyers over at our first home loans comparison hub.

Compare first home loans - last updated 21 January 2022

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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