{"id":9485,"date":"2024-10-10T20:55:10","date_gmt":"2024-10-10T20:55:10","guid":{"rendered":"https:\/\/www.nerdwallet.com\/au\/?page_id=9485"},"modified":"2024-10-10T20:55:12","modified_gmt":"2024-10-10T20:55:12","slug":"buy-a-house-with-no-deposit","status":"publish","type":"page","link":"https:\/\/www.nerdwallet.com\/au\/home-loans\/buy-a-house-with-no-deposit","title":{"rendered":"5 Options For Buying A House With No Deposit"},"content":{"rendered":"\n

Compiling a 20% deposit<\/a> presents a barrier for many potential homebuyers. <\/p>\n\n\n\n

In specific circumstances it may be possible to buy a house with a much smaller deposit or no deposit at all.\u00a0<\/p>\n\n\n\n

Can you buy a house without a deposit? <\/h2>\n\n\n\n

Traditionally, to buy a property in Australia<\/a> you need a deposit of 20% of the property\u2019s value, after which you can borrow the remaining 80%. <\/p>\n\n\n\n

For some, saving that 20% figure<\/a> is extremely difficult and may seem out of reach.<\/p>\n\n\n\n

However, while it is not common, it may still be possible to purchase a property with no deposit, provided you meet a certain lenders\u2019 criteria, which is assessed on a case-by-case basis. <\/p>\n\n\n\n

How to get a home loan with no deposit<\/h2>\n\n\n\n

As the name suggests, a no deposit home loan is when you are able to secure a mortgage without any deposit, or cash savings. <\/p>\n\n\n\n

The most likely of these scenarios is when you have a guarantor. A guarantor home loan<\/a> is when someone you know (usually a relative) uses the equity<\/a> in their existing property as security for your home loan. <\/p>\n\n\n\n

For example, if you wish to purchase a $500,000 property, you would usually need a 20% deposit ($100,000) to avoid paying lenders mortgage insurance (LMI). If you have a guarantor, the lender may allow you to borrow 100% of the property’s value, as long as the guarantor\u2019s equity covers at least 20% of the price. Once this 20% has been paid off, the guarantor is removed from the loan. <\/p>\n\n\n\n

It\u2019s important to note that this comes with substantial risk for the guarantor, as they will be financially responsible should you default on your mortgage. <\/p>\n\n\n\n

Lending criteria\/eligibility: <\/strong>A guarantor may help with the deposit, but your home loan application will still depend on other factors before it is approved, such as: <\/p>\n\n\n\n