22 Aug 2021

How Can I Buy a House with a Small Deposit?

Missed Mortgage Payments: How Do They Impact Refinancing?

Even though the average deposit for home loans is between 10 and 20%, it is possible to secure a home loan with a smaller deposit. The most significant differences between a low deposit home loan and a standard home loan are lenders mortgage insurance and stricter lending criteria. 


How the Differences Impact Your Loan

Both Lenders Mortgage Insurance (LMI) and the stricter criteria can affect your small deposit loan application. 


  • LMI: Lenders require anyone with a deposit of less than 20% to pay insurance to protect their investment. LMI is affected by the size of your deposit and the value of your property. Smaller deposits may have LMIs worth thousands of dollars. 
  • Lending Criteria: your application will be looked over more carefully by your lender. If your deposit is less than 20%, you will want to make sure all your documents and paperwork are correct and up-to-date to increase your chance of being approved. 


Applying for a Small Deposit Loan

The application process is the same whether you apply for a small deposit or a standard home loan. However, lenders have introduced stricter lending criteria for small deposit loans. Here are some tips to help you strengthen your application:


  • Gather your bank statements, identification, and other required documents
  • Show that you have a savings history
  • Check your credit score
  • Reduce your spending for at least six months before applying


Applying for a small deposit loan can be stressful and complicated. At Mortgage House, we make the process easy. Our small deposit loans are easy to apply for and have competitive interest rates and loan features. 


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