What Are Low Deposit Home Loans?
While traditional home loans require significant savings to meet deposit requirements, low-deposit home loans allow buyers to borrow a higher percentage of the property’s value. In many cases, this means borrowing up to 90-95% of the purchase price. Lenders may require borrowers to pay the Lender’s Mortgage Insurance (LMI) if the deposit is below 20%, which protects the lender in case the borrower defaults on the loan.
At Smartfinn Advisors, we specialise in guiding clients through the process of securing low-deposit loans, offering personalised advice and personalised loan solutions to meet their financial needs.
How to Qualify for a Low-Deposit Home Loan
Good Credit Score
Stable Income
Lender’s Mortgage Insurance (LMI)
Guarantor Option
Some buyers can qualify for a low-deposit loan with the help of a guarantor, typically a family member. The guarantor provides security by using their property as collateral, which may reduce the lender’s risk and allow you to avoid LMI.
Government Assistance for First-Time Buyers
FAQS
How much deposit do I need for a low-deposit home loan?
What is Lender’s Mortgage Insurance (LMI), and how does it affect low deposit loans?
Can I avoid paying LMI with a low-deposit home loan?
Yes, in some cases. If you qualify for the First Home Loan Deposit Scheme (FHLDS), you may be able to secure a home loan with a 5% deposit without paying LMI. Another option is to have a guarantor who can use their property as security for the loan, eliminating the need for LMI.
