How borrowers can combat the housing affordability crisis

We’ve heard for a while now that we’re in a housing affordability crisis, and many Aussies feel like home ownership is increasingly becoming out of reach for them. 

However, while all the news can feel very doom and gloom, there are actually a lot of things to stay positive about and a lot we can do to combat housing affordability. 

Looking for a better property price 

Another thing to consider when looking at housing affordability is the city you live in. This can affect your decision-making as the regional cities and some capital cities are a lot cheaper than say Melbourne or Sydney.

While these numbers may seem a bit daunting, there are workarounds that we can find. For one, regional cities like Geelong, Gold Coast, and Newcastle tend to be better priced which could be an attractive option for those who don’t feel tied down to the capital cities.

With remote work seemingly here to stay, many families will also find themselves wanting to opt for homes in areas that provide a positive living environment rather than the convenience of being close to a capital city CBD.

Think about grants like the Home Guarantee Scheme 

If you’re a first homebuyer, there are more options available to you such as the government’s first home guarantee and regional first home guarantee schemes. 

With these schemes, you can have the government act as a guarantor on a deposit of up to 15%. The government acting as a guarantor basically means that you won’t need to pay lenders' mortgage insurance (LMI)

You usually pay LMI for deposits lower than 20% of the overall property’s value as a way of protecting the bank as (without a guarantor) you’re seen as a riskier borrower.

It’s good to check whether you’re eligible for the home guarantee scheme which was recently expanded to include siblings and friends looking to co-ownership. Also, if you’re not a first homebuyer but haven’t owned a property in the past 10 years then you might be eligible for the scheme too.

Check home loan options like low deposit loans

When it comes to housing affordability, saving for a 20% deposit can feel daunting. However, if you’ve got the cash but not the time to save, you can opt to take out a low deposit home loan. 

Essentially, with a low deposit home loan, you can take out a loan with a deposit that usually ranges anywhere between 5-15% of the total property value. However, keep in mind that unless you have a guarantor (like a parent), you’ll have to pay lenders' mortgage insurance. 

Another way of combating housing affordability is through utilising comparison websites like Mozo. Our database has a number of low deposit home loan providers you can compare so that you get the loan that works best for you

Home loan comparisons on Mozo - last updated 26 February 2024

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  • Mozo Expert Choice Badge
    Home Variable Rate

    Owner Occupier, Principal & Interest

    variable rate
    comparison rate
    Initial monthly repayment
    6.15% p.a.
    6.15% p.a.

    Enjoy a competitive variable interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply) Mozo Experts Choice award winner.

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  • Straight Up

    Obliterate, Owner Occupier, Principal & Interest, <50% LVR

    variable rate
    comparison rate
    Initial monthly repayment
    6.24% p.a.
    6.24% p.a.

    Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.

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  • Neat Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    variable rate
    comparison rate
    Initial monthly repayment
    6.09% p.a.
    6.11% p.a.

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

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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. You can change the loan amount and term in the input boxes at the top of this table. 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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