No Deposit, Low Deposit, 106% Home Loans

No and low Deposit Home Loans

As it gets harder to save deposits for property, more and more borrowers are opting for no and low deposit home loans. Not all lenders offer them for all postcodes in Australia and you will find that no deposit home loans typically come with more 'conditions' and 'serviceability' requirements, but for many Australians, particularly professionals who can service a loan but maybe not save a deposit, no deposit loans are a fantastic way to get out of the rent cycle and into your own property. There are many options with no deposit home loans and typically these relate to the way you choose to amortise the related fees or make repayments. Your options are probably broader than you think and this market is increasingly competitive, so talk to your local mortgage broker to work out which lender and offer is best for you.

More Information or comparison

If you would like to talk to us confidentially about low or no deposit home loans and how they work, email us the form below or call at any time on 13 XINC (13 9462) and we will return your call within 2 business hours.

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Some Options: 100% no deposit - no application - 'quick start' Home Loans

Normally you have to save at least a 5% deposit plus costs before applying for a loan. With a no-deposit loan, you can borrow 100% of the purchase price of the property, but you still have to pay your normal property purchase and finance application fees and lender's mortgage insurance. One X Inc Finance lender, St George used to offer a 'Quick Start' option which had no LMI or loan extension fee. While it did have a higher interest rate and higher early termination fee, it proved a good option for some professionals.

These are just a couple of the options available and if you are a professional on a good income, want to get out of the rent cycle faster or are an investor - talk to your local mortgage broker about how the different no deposit home loans work.

how are eligible postcode decisions made?

Postcodes eligible for no deposit home loans are revised by lenders ongoing. Decisions are made based on the credit risk profile of the postcode, which is in turn based on the postcode's valuation history. If you are considering a no deposit home loan, make sure when you are discussing your finance application with your mortgage broker that you let them know the postcodes you are looking in.

mortgage payments versus renting

The availability of low and no deposit home loans means that the 'tipping point' between a mortgage payment and continuing to rent is far closer. And that is before you consider the advantages of property appreciation!

 

Pros of no deposit home loans

  • You can buy property sooner without waiting until you save a larger deposit
  • Most come with features such as additional repayments and redraw

Cons of no deposit home loans

  • Stricter lending criteria makes approval more difficult
  • You are limited to certain types of properties
  • As you are borrowing more money, you'll pay more interest in the long term
  • Mortgage insurance will be higher than "deposit" home loan products
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