Low Deposit Home Loan First Home Buyer

What is a low deposit home loan?

No matter where you live, saving for your first home can be difficult. The costs of buying can seem rather disincentive – with deposits, repayments, stamp duty, fees and charges and legal fees all to consider. Low deposit home loans can help home buyers get started, and getting into the property market is a step that can set you up financially for the rest of your life.

Being a first home buyer looking for a low deposit home loan is not uncommon, especially when you consider there are ways around needing a 20% deposit most banks and lenders require. A low deposit home loan is a regular mortgage than can require as little as 5% deposit. Applying for a low deposit first home buyer home loan can be simple. It’s no different than applying for a regular mortgage, with the same types of loans, including:

  • Fixed Home Loan: A fixed home loan is a mortgage that allows home buyers to fix their interest rates for an agreed period, usually between 1 and 5 years. This can be a good option for a first home buyer looking to stick to a budget, with repayments remaining the same over the fixed term.
  • Variable Home Loan: Interest rates can increase or decrease over the life of your mortgage, if you choose a variable home loan. Variable mortgages are popular for low deposit home loans as the interest rates are usually lower than comparable contemporary fixed rate loans.

Mortgage House prides itself on being different from the big banks, by taking our time to help tailor a home loan exactly to your needs. We will study your financial situation in great detail and work closely with you every step of the way to help you find a suitable mortgage or choose from our large range of credit products.

With high property prices, how can I save for a deposit?

Saving for a deposit, any deposit, can be difficult, which is why Mortgage House can present you with a range of suitable low deposit home loans. Most of the big banks and lenders can require a deposit of about 20%, which means they will let you borrow up to 80%. It’s called a Loan-to-Value Ratio, and you will see LVRs mentioned in the detailed information of most home loan credit products. Being a first home buyer, you are probably looking for details about low deposit home loans and what they can offer you and your family. But there may be another ways to get a home loan with a low deposit and lower the costs of buying your first home.

It’s called Lenders Mortgage Insurance and it’s designed to protect the lender against home buyers defaulting on their mortgages. The Reserve Bank has predicted about 25% of all Australian home buyers use LMI. By paying for LMI, banks and lenders can lower the deposit needed for a home to as little as 5%. LMI can be expensive, but the good thing is you can add the full amount to your mortgage and pay it off over the life of the loan. And if, as a first home buyer, it helps you get into the market, having an asset to your name can help you financially in the medium and long term.

However, it is important to realise that banks and lenders will still look at other areas of your application, such as credit history, income, employment history and expenses, meaning LMI may not be a silver bullet. If you’re unsure about whether you want to add LMI to the costs of buying a home, or want to have more than the minimum deposit amount that may be required then our Budget Calculator below can help. It can give you a clear and easy-to-understand picture of your current financial situation, and help you identify any areas you may be able to adjust to help you save.


What is the price of the property that you want to buy?
How much do you want to borrow?
What type of loan do you require?

Full Doc: Home loan suitable for people who are able to provide full evidence of their income when applying for a loan.

Low Doc: Home loan suitable for the self employed or people who are unable to provide full financial documents when applying for a loan.

Full Documentation

Low Documentation

Do you want a fixed or variable rate loan?



Mortgage Deal Interest Rate Annual Fee Comparison Rate Repayments
Monthly Fortnightly Weekly

Important Disclaimer: This information is intended as a guide only. The calculation of fortnightly and weekly instalments varies with the specific loan product. Higher loan repayments will be required on principal and interest loans where the instalment calculation is based on half the monthly payment for a fortnightly payment or a quarter of the monthly payment for a weekly payment. Details of terms and conditions, interest rates, fees and charges are available upon application. Mortgage House's prevailing credit criteria apply. We recommend you seek independent legal and financial advice before proceeding with any loan.

Can guarantor loans help?

If you’re a first home buyer looking for a home loan, then there may be credit products other than low deposit home loans that can help you realise your property dreams. If the costs of buying seems out of reach at the moment, then a Family Pledge home loan may be suitable for you and your family. Family Pledge mortgages allow you to borrow up to 100% of the value of the home you are looking to buy, with an immediate family member going guarantor, using a percentage of residential real estate they own. Depending on how much your family member is willing to pledge, some banks and lenders may even let you borrow more than the full value of the property, allowing you to cover costs such as stamp duty and legal fees and charges. If you choose a Family Pledge loan, you won’t need to pay Lenders Mortgage Insurance, as the bank will have already limited its risk.

One of the other advantages of credit products such as Family Pledge mortgages is that you can refinance, or redraw, your home loan, once you have enough equity in your home. That allows you to repay your family member when you can, and free them of their pledge. Close family members can be guarantors, although it is important they have strong equity in their home. It is also important they have a strong credit rating. Banks and lenders will hesitate to rely on someone with a poor credit file. Australian banks and lenders also prefer to lend to Australian residents who are aged between 18 and 65.

How much can I borrow?

As a first home buyer with a low deposit home loan, it may be difficult to gauge from the start how much you might be able to borrow. Our Borrowing Calculator is a good place to start. Simply fill in all the information as accurately as you can, including your income and expenses, and the details of the loan, and we’ll give you an indication or your borrowing power. This information can act as a guide and can help home buyers narrow down, or expand, their property search.

When working this out, ensure you take into account the other costs of buying a home, such as stamp duty, legal fees, Lenders Mortgage Insurance, house and contents insurance, and things such as moving fees. All of these things can add up, and it is important, where possible to consider them in your budgeting. Another important thing to consider when looking at a low deposit home loan is that your credit file is in order, and that you have a good credit rating. If you have ever applied for credit of any kind – including a credit card, home loan or ever a mobile plan – you will have a credit file. That file sums up all the data available, including whether you have defaulted on a loan or missed any payments, and gives you a rating.

The higher your rating, the more your chances you have of being successful on a loan application. If you’re looking to apply for a first home buyers low deposit home loan, it’s important to find out what your credit rating is and, if necessary, take steps to improving it.

Do I pay stamp duty?

Whether or not you pay stamp duty, and how much you pay, can depend on where in Australia you live. Some states and territories have exemptions or, at the very least, discounts, for stamp duty for first home buyers. Stamp duty can add an unexpected jolt to the costs of buying your first home. Stamp duty is a tax that is paid on the transaction of buying a home or block of land. How much stamp duty you pay can also depend on the value of the property you are looking to purchase. Use our Stamp Duty Calculator below to get a better understanding of how much stamp duty you may have to pay when you buy a home, if you do at all.


The price of buying the property
The State/Territory where you will be buying the property
What is the primary use of the property e.g. will it be your main residence or are you buying the property as an investment?
What is the type of the property that you are buying?
Are you a first time buyer of property? You may receive discounts on the stamp duty paid as first time buyer.



Important Disclaimer: This is intended as a guide only. Values used in the calculations are subject to change.

Registration Fee


Transfer Fee


Stamp Duty Fee


Total Stamp Duty Costs