Your selected home loans
A low deposit home loan usually means having a deposit of 10% or less of the property's value. Compare low deposit home loan options from a range of lenders from online to well-known bank brands below.
Owner Occupier, Refinance Only, LVR <80%
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
Read our Mozo Review to learn more about the Unloan Unloan Variable
Principal and Interest, LVR <90%
Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required. Advertised rates include Nov RBA rate increase. T&Cs apply.
Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required. Advertised rates include Nov RBA rate increase. T&Cs apply.
Read our Mozo Review to learn more about the loans.com.au Variable Home Loan 90
Investor, Principal & Interest, LVR <90%
Low variable rate home loan for Investors up to 90% LVR with no ongoing fees, free extra repayments and redraw facilities. Winner of the Offset Home Loan Expert's Choice Award for 2022.
Low variable rate home loan for Investors up to 90% LVR with no ongoing fees, free extra repayments and redraw facilities. Winner of the Offset Home Loan Expert's Choice Award for 2022.
Read our Mozo Review to learn more about the Well Money Well Balanced
^See information about the Mozo Experts Choice Home loans Awards
*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.
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.
Save with deals from the following well-known brands and many more...
So, what does a low deposit home loan look like? In Australia, the standard deposit that you need when purchasing property is 20% of the property's value. This means that if you are buying a property for $500,000 you would need a deposit of $100,000. Now, saving up for a $100,000 deposit is no walk in the park and would take most people several years to achieve.
An alternative option to saving up for this deposit is to take out a low deposit home loan which will only require you to save a deposit of around 5 -10%.
So, let’s say you’ve only saved up to $50,000 for a deposit—half of what you need for the 20% deposit. By getting a low deposit home loan, that $50,000 would equal to 10% of the property's value meaning that you would be able to jump onto the property ladder earlier than you could have. Just keep in mind that, when starting with a lower deposit, the amount of interest you are paying is larger as well as your loan size—remember, in this scenario, you’re borrowing $450,000 instead of $400,000.
One thing to note is that the lending criteria for home loans have tightened since the GFC, so it is no longer possible to get a no deposit home loan. Even 5% deposit home loans are relatively rare, so if you are planning on purchasing property it might be a good idea to aim towards snagging a low deposit at 10% of the property's value.
Unless you have a family or government guarantor, if you decide to opt for a low-deposit home loan you will need to pay lenders mortgage insurance (LMI). All home loans that have an LVR of 80% or more are required to take out this insurance. The cost for this insurance is added to your home loan amount. How much you need to pay for LMI will depend on the amount you are borrowing and your LVR. Just keep in mind that LMI isn’t transferable.
It is important to understand that this insurance does not protect you if you can't meet your repayments. You would need to take out mortgage or income protection insurance to cover you in case of illness or redundancy. LMI is insurance you pay to protect the bank or mortgage lender should you default on your repayments.
The property market can be pretty competitive, so using a low deposit home loan to get on the property market can be a helpful way of breaking in. That being said, the LMI that you usually have to pay can seem like just another extra expense that you’ve got to contend with. Thankfully, if you’re a first home buyer (or haven’t owned a property in the past 10 years) then you might be eligible for the First Home Guarantee.
With the First Home Guarantee, the government acts as your guarantor which means that they provide additional security to the loan—essentially, removing the need for you to pay LMI. Keep in mind that the scheme is kept to participating lenders, so you be sure to check that your loan provider actually is a part of the scheme.
So, what else do you need to know about the First Home Guarantee scheme? First off, it’s for low deposits from 5% up to a standard deposit of 20% and is intended for both individuals and joint applicants. It’s important to note that if you’re an individual earning over $125,000 or a joint applicant with a total equalling over $200,000, you won’t be eligible for the scheme.
If you’re a borrower who’s looking to get into the property market now, whether an investor or first time home buyer, then you’ll be interested to know about some of the advantages that come with getting a low deposit home loan. Some of these include:
Less time saving for a deposit: Low deposit home loans can make homeownership accessible to people who have not been able to save a deposit. This is particularly beneficial for first-time home buyers who may struggle to save while also paying rent.
Get on the property ladder sooner: A low deposit home loan has the potential to let borrowers get their home faster than they may otherwise have gotten had they saved for the full 20% deposit.
Hold more money back: With a lower initial deposit, you may be able to maintain a substantial emergency fund which—when combined with an offset account or extra repayments—can lead to
Government schemes: If you’re a first time home buyer, chances are you may be able to get your low deposit loan backed by the government which usually means an exemption from paying lenders mortgage insurance (LMI).
While a low deposit home loan can be useful for borrowers who are looking to get on the property ladder early, there are some drawbacks that you should consider.
Lower equity: One downside to having a low deposit is that you’ll be starting with a lower equity which means that there’s a larger loan and, therefore, your regular repayments could be larger than they otherwise would be at a 20% deposit.
Higher Interest Rates: As a lower deposit is viewed as more risky by the banks, home loan providers will generally require that borrowers pay higher interest.
Lender's Mortgage Insurance (LMI): If you have a deposit of less than 20% of the property's value, you will usually be required to pay Lender's Mortgage Insurance. This is a one-off fee that protects the lender, not the borrower, if you can't repay the loan. However, if you then this you likely won’t have to pay LMI.
We've made working out your repayments as simple as possible with our handy mortgage repayments calculator. Just plug in your loan amount and term and we'll instantly tell you what your monthly repayments will be so that you can begin budgeting. Otherwise, head straight to our comprehensive search tool and get a ranking of loans based on price, or compare options to find the best mortgage for you.
The application process for a low-deposit home loan can involve a fair amount of preparation. Generally, you should check you have your documentation in order such as:
Identification (driver's licence, passport, etc.)
Proof of income
Liabilities (such as debts)
Credit score
It’s also a good idea to make sure that you do your research for the loan you’re looking to get as there are other costs associated with a home loan such as stamp duty and legal fees.
If you’re looking for a low deposit home loan, having access to a wealth of local knowledge is a great asset and something you might want to tap into. Below we have a list of local low deposit providers for each state.
___
For buyers based in Sydney, there are plenty of options available for lenders offering low deposit home loans. Here are some lender options:
Bank of Sydney
Macquarie
AMP Bank
Aussie Home Loans
Qudos Bank
Teachers Mutual Bank
Unity Bank
UniBank
There are also regional NSW low deposit lending options available:
Greater Bank
Macquarie Credit Union
Hume Bank
Coastline Credit Union
Newcastle Permanent
Orange Credit Union
Illawarra Credit Union
Regional Australia Bank
Southern Cross Credit Union
The Mutual Bank
For buyers based on Melbourne, there are options available for low deposit lenders local to you. These include:
Bank of Melbourne
Bank of Australia
Australian Unity
Bank First
BankVic
FreedomLend
OneTwo
Well Home Loans
For buyers in regional Victoria, here are a few low deposit lenders:
Bendigo Bank
BankWAW
For buyers located in Brisbane and the Gold Coast, there are local low deposit lenders available to you, including:
Bank of Queensland
firstmac
Auswide Bank
Great Southern Bank
ME
MOVE Bank
QBANK
RACQ Bank
Suncorp
Virgin Money
Reduce Home Loans
For low deposit lenders in regional Queensland, check out:
Heritage Bank
Queensland Country Bank
The Capricornian
For buyers in South Australia, local low deposit lender options include the following:
BankSA
Adelaide Bank
Beyond Bank
Credit Union SA
People's Choice
Tic:Toc Home Loans
For buyers in Western Australia, local low deposit lender options include the following:
Unibank
Bankwest
Goldfields Credit Union
P&N Bank
For buyers in Tasmania, local low deposit lender options include the following:
Bank of us.The Capricornian
MyState Bank
___
If you are planning on purchasing a home with a small deposit, then finding the right home loan is essential. Because, while buying a low deposit does mean you could be paying a higher interest rate, it doesn’t mean you still can’t get a deal on your home loan. Our home loans interest rates page is a great place to find a competitive interest rate, it can also help you compare a range of loan features from offset accounts to extra repayments.
Yes, there are plenty of lenders that allow borrowers to take out home loans with a deposit as low as 5% (so a 95% loan-to-value ratio). A quick look in the Mozo database shows that low deposit borrowers will be able to pick and choose between a variety of big banks, credit unions and online lenders, though the interest rates on offer vary greatly.
The federal government’s First Home Loan Deposit Scheme (FHLDS) is still up and running for first home buyers with low deposits (at least, as of June 2021).
In short, the initiative allows first home buyers with a deposit between 5% and 20% to take out a home loan to purchase a new or existing property without needing lenders' mortgage insurance. Instead, the government acts as a guarantor for the loan.
Loan-to-value ratio (LVR) is an important term to get to grips with in the world of home loans, particularly if you're planning on taking out a low deposit home loan. That’s because LVR is one of the key metrics used by lenders to determine how ‘risky’ you are as a borrower - the lower your deposit is, the higher your LVR will be, and the riskier you’ll be to lenders.
Typically, lenders will also charge higher interest rates to borrowers with greater LVRs, but the good news is that as you pay off your loan and lower your LVR, you may be able to switch to a better rate.
There are so many types of home loans available to borrowers these days that you can really cherry pick the features that will best suit you.
Interest rates on low deposit home loans are generally slightly higher and you may find that the borrowing limits are also lower on these loans so before you start property hunting it is a good idea to get an idea of the maximum loan amount available if you do have a smaller deposit.
Other features worth reviewing include:
offset account feature. Having an offset account attached to your home loan can save you a lot of money in interest over the life of your loan. Think of an offset as a bank account and the balance in that account is offset against your loan amount. So say you have $3000 in your offset bank account but you owe $500,000 on your home loan. Instead of paying interest on the full loan amount you will only pay interest on $497,000. This may not seem like a lot but over 25 years this adds up.
extra repayments. Having the ability to make extra repayments will also reduce the interest and the length of your loan term. Lump sums you get from work bonus or at tax time can make a difference but so too will putting an extra $50 each month onto your home loan.
You could be up for the following fees depending on your loan choice:
Application fee. This is a fee payable when you apply for a home loan for the lender to assess and process your application. Some lenders waive this fee if you proceed through to settlement.
Valuation fee. You could be charged a valuation fee by the lender for them to value your property. It is important to understand that their valuation may be different to the price you paid for the property or the price given to you by a real estate agent. The lender will base their loan amount off the valuation done by their valuer.
Settlement fee. This is a nominal charge for a bank or lender representative to attend settlement on your behalf and file paperwork.
Service fee. Some loans will have a monthly or an annual service fee. It is important to review this carefully, a $10 a month fee might not sound like much but over a 25 year home loan this adds up to a cool $3000.
Discharge fee. This is a fee payable at the end of the loan term.
In addition to the fees charged by the lender, you may have to pay state or government fees and charges.
Stamp duty calculator. See here if you’ll need to pay stamp duty on your property purchase.
Check out the table above to find the right low deposit home loan for you.
While a low deposit home loan may help you get into the property market or your dream home sooner, they’re not without their drawbacks - namely, higher rates and lenders’ mortgage insurance. These are costs you’ll likely need to factor into your budget, so you may want to weigh them up against saving up for a 20% deposit instead.
While it’s still possible to secure a competitive rate with a low deposit home loan, lenders do tend to charge a premium for mortgages with LVR’s over 80%. And at the end of the day, a higher interest rate will only add to the amount of interest you pay over time.
As we’ve explained above, LMI is the other main drawback buyers will need to be wary of when contemplating taking out a low deposit home loan. It’s a cost that generally can’t be avoided, and one that can run into the thousands or tens of thousands of dollars.
Has a good mortgage rate and cash bonus .
Read full reviewHas a good mortgage rate and cash bonus .
don’t trust this bank and there branch managers all they did to us was lie and treat us like second rate citizens. steer clear And try to go somewhere else.
Read full reviewdon’t trust this bank and there branch managers all they did to us was lie and treat us like second rate citizens. steer clear And try to go somewhere else.
I've been with a credit union and Commonwealth Bank (CBA), had experience with NAB and am now with Westpac (for over 10 years) and they are honestly the best banking experienced I've ever had. Westpac has surpassed my experience with any other bank. I was purchasing a property and CBA couldn't match Westpac's rate. NAB promised to beat them but were stuffing us around and dragging their heels as settlement approached. Westpac "rescued" us from the situation by offering us a cheaper rate than NAB would and processing our loan application quickly. However, shortly after we swapped they upped their variable rate 0.2 % above the RBA move and our seemingly fantastic discount vanished within months. We now understood how they could offer us such a fantastic rate and felt a little conned BUT our experience in the 10 plus years later we have overall been extremely happy with them. During this time we have experienced many of their products from their fixed Investment home loans, to their variable principal place of residence loan, to their Life account, Bump Account and Altitude Mastercard -the service has been fantastic throughout. The reason we stay with Westpac is: the security of a big bank (we feel more protected from hacking -something the government $250k guarantee does not cover, and protected by their size and reputation -ie from bankruptcy as the government guarantee only covers to $250k and not things like hacking ), and the service -I've always walked into my local branch and received prompt service no matter what my question, the telephone and web banking service is pretty amazing too as is the app. I fixed my home loan within minutes via the app. There were no hidden surprises either. The phone service is always prompt and helpful. I've never been one to budget but thanks to the app I'm now fully away of my monthly expenditure and income allowing me to calculate an average per month. It also gives you a net position -as in net worth -which is brilliant. It categorises expenditures and sorts them biggest to smallest allowing you to quickly identify something unusual. It also gives you a rolling figure of income and expenses for the past 12 months. You can get your tax data, home loan rates and other info quickly and easily. I also enjoy their Life account (currently offering 4.75% variable on savings) as I've compared it to other savings accounts on the market and they are either riskier (in my opinion) or have more "hoops" to jump through to qualify for bonus interest -or both. I found it easier to qualify for bonus interest with Wespac than with many other products offered by other institutions on the market. I also love their Altitude Rewards Card (if your signing up with Westpac try and ask for the platinum card). I earn points on nearly everything I buy which has allowed me to get hundreds of dollars of gift cards but you can also use points to buy products and even get cash back. You can also set it up so that you automatically direct debit the spending on this credit card from your savings account which means you never pay interest. Another added money saving/earning bonus that's effortless. If you temporarily lose your card you can easily temporarily lock and unlock your card via the app -no need to call the bank. Finally, I've found around 90% of the time Westpac is true to their word and will honour their word. Overall, I have done my research and I highly recommend them - you do pay a premium over a non-big four bank but in exchange they offer security, excellent service, a fantastic app, easier hurdles for bonus interest, automated functionality such as auto direct debit, a huge range of highly flexible products, a great credit card with a good points system.
Read full reviewI've been with a credit union and Commonwealth Bank (CBA), had experience with NAB and am now with Westpac (for over 10 years) and they are honestly the best banking experienced I've ever had. Westpac has surpassed my experience with any other bank. I was purchasing a property and CBA couldn't match Westpac's rate. NAB promised to beat them but were stuffing us around and dragging their heels as settlement approached. Westpac "rescued" us from the situation by offering us a cheaper rate than NAB would and processing our loan application quickly. However, shortly after we swapped they upped their variable rate 0.2 % above the RBA move and our seemingly fantastic discount vanished within months. We now understood how they could offer us such a fantastic rate and felt a little conned BUT our experience in the 10 plus years later we have overall been extremely happy with them. During this time we have experienced many of their products from their fixed Investment home loans, to their variable principal place of residence loan, to their Life account, Bump Account and Altitude Mastercard -the service has been fantastic throughout. The reason we stay with Westpac is: the security of a big bank (we feel more protected from hacking -something the government $250k guarantee does not cover, and protected by their size and reputation -ie from bankruptcy as the government guarantee only covers to $250k and not things like hacking ), and the service -I've always walked into my local branch and received prompt service no matter what my question, the telephone and web banking service is pretty amazing too as is the app. I fixed my home loan within minutes via the app. There were no hidden surprises either. The phone service is always prompt and helpful. I've never been one to budget but thanks to the app I'm now fully away of my monthly expenditure and income allowing me to calculate an average per month. It also gives you a net position -as in net worth -which is brilliant. It categorises expenditures and sorts them biggest to smallest allowing you to quickly identify something unusual. It also gives you a rolling figure of income and expenses for the past 12 months. You can get your tax data, home loan rates and other info quickly and easily. I also enjoy their Life account (currently offering 4.75% variable on savings) as I've compared it to other savings accounts on the market and they are either riskier (in my opinion) or have more "hoops" to jump through to qualify for bonus interest -or both. I found it easier to qualify for bonus interest with Wespac than with many other products offered by other institutions on the market. I also love their Altitude Rewards Card (if your signing up with Westpac try and ask for the platinum card). I earn points on nearly everything I buy which has allowed me to get hundreds of dollars of gift cards but you can also use points to buy products and even get cash back. You can also set it up so that you automatically direct debit the spending on this credit card from your savings account which means you never pay interest. Another added money saving/earning bonus that's effortless. If you temporarily lose your card you can easily temporarily lock and unlock your card via the app -no need to call the bank. Finally, I've found around 90% of the time Westpac is true to their word and will honour their word. Overall, I have done my research and I highly recommend them - you do pay a premium over a non-big four bank but in exchange they offer security, excellent service, a fantastic app, easier hurdles for bonus interest, automated functionality such as auto direct debit, a huge range of highly flexible products, a great credit card with a good points system.
More home loan reviews
Your selected home loans