Can I buy a house with less than 5% deposit?
If you do not have a large deposit saved, but want a home, you do have the option of putting a 3% deposit on a home. The average percentage of a deposit is 20%, but not everyone has the time, money, or space to save 20% of the value of a $500,000 home in Australia. However, 5% is a lot easier to manage.
But can you buy a home with less than a 5% deposit? You can, but it won’t be easy. Some limited banks and lenders feel comfortable working with a borrower that only has 1-3% of the deposit. However, you have a better chance of being approved if your credit report is strong and you have low debt and high income.
Usually, if you qualify for a low deposit loan with less than a 5% deposit, you are required to pay a one-time and non-transferable low deposit fee. The fee depends on how much you borrow and the agreement made between you and the lender. If you are still interested in a low deposit mortgage loan, speak to our Mortgage House lenders soon! Want to have an estimate? Use an online free mortgage calculator in just a few easy steps.
Less than 5% Deposit Conclusion
To conclude, you do not need an average of 20% deposit on a home loan. The lowest you can get is 3%, but not all banks will consider you with a low deposit. Those that do require additional fees.