How Can I Get a Low Deposit Mortgage?
Most lenders in Australia recommend a 20% deposit for home loans. However, some lenders allow you to put down a smaller deposit. Generally, these lenders have strict requirements you have to meet, but you are likely to get approved as long as you meet them, even if your deposit is as small as 1% of the loan amount.
What criteria are there?
For a low deposit mortgage, lenders may require you to meet the following criteria:
- A steady income with a secure job
- You must use the loan to buy, refinance or build a home. However, depending on your application strength, other purposes may be considered by your lender.
- Your property must be low-risk and in a low-risk area.
- You should have a good credit history with no late payments on credit cards or rent and very little debt.
- Most lenders require you to have at least 5% of the price of your property in savings.
- It would be best if you had assets reflecting your age and income.
The more money you can put down on a home loan, the less strict lenders are with the above requirements.
Low Deposit Features
The lower the deposit you put down, the higher risk your loan is considered by banks. Therefore, most traditional lenders don’t accept a deposit of less than 10% plus Lender’s Mortgage Insurance. However, if you can provide a strong loan application and prove that you have strong borrowing power, you may have the same interest rates as a 20% deposit.
Trying to secure a low deposit home loan can be difficult, especially if you try to utilise banks or other traditional lenders. Mortgage House is a non-bank lender that specialises in high-risk loans. Our team of brokers can find you the best home loan no matter the size of your deposit. Contact us today to discover how we can help.