Those additional 10,000 first home buyers will be able to obtain a loan to build a new home or purchase a newly built home with a deposit of as little as 5 per cent 3. However, in more good news, the budget. Low Deposit Home Loan. Make your dream of owning your home a reality. Get into a home of your own sooner, with a home loan deposit from as low as 2%. You can choose to buy established or build. You may even be able to use your first home owner grant towards your deposit. For the very few ‘no deposit’ home loans that do exist, there are generally very tight criteria to meet to be eligible, including a near-perfect credit record and a very stable work history. The loan is also likely to come with a higher interest rate. However, many lenders offer what could be the next best thing — 5% deposit home loans.

• Home Loan Deposit Scheme

Other options for first homebuyers with no deposit

1. When it comes to saving for a home deposit, you’ll often hear people bring up a minimum figure of 20%. In other words, if the purchase price of your home is $500,000, many people will tell you that you need to.
2. You may be able to use a Family Security Guarantee 1 where your parents use available equity (supported by a mortgage over their property, or a term deposit) to assist you with your home purchase.

If you have no deposit or very limited savings, you might be able to find resources by tapping into other sources of money.

If your family members are able and willing (and we understand this is not often the case) they could provide a cash gift to increase your deposit. However, there are rules that apply.

Alternatively, if your parents own their home and are willing to guarantee part of your deposit, they could be your guarantor. The guarantor doesn’t need to pay anything, however if their guarantee is worth more than 20% of your home’s value, you may be able to avoid paying lenders mortgage insurance, and that’s a valuable saving.

There’s also the option to use a windfall, such as an inheritance or a monetary gift from family members.

Lenders usually like to see that you saved up for a deposit — it shows that you’re more likely to meet your loan repayments — but some may be willing to accept cash gifts as deposits under certain conditions. The lender may ask for a statutory declaration, which states that the money is being handed over to you unconditionally.

Home Loan Deposit Scheme

While it may be possible to buy a home using a small deposit, it can be difficult as a first homebuyer to know what choices will suit your needs. An Aussie Broker can help you weigh up your options for saving up a deposit, as well as compare rates across a wide range of options.