No Deposit Home Loans in Australia: Is It Still Possible to Buy Without a Deposit?

For many Australians, saving for a home deposit can feel like an impossible hurdle. With property prices on the rise, especially in major cities like Sydney and Melbourne, the traditional 20% deposit can mean saving hundreds of thousands of dollars before stepping onto the property ladder. But what if you could buy your dream home without a deposit?

Let’s explore the reality of no deposit home loans in Australia, how they work, and what alternative paths are available for buyers with limited savings.

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What Is a No Deposit Home Loan?

A no deposit home loan is a mortgage where the borrower is not required to contribute any savings towards the purchase price of a property. Instead, the full purchase amount is borrowed from the lender.

While true "no deposit" loans are extremely rare in Australia today, there are a few strategies and government initiatives that make buying a home with little or no deposit possible.

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Options for Buying a Home with No or Low Deposit

1. Guarantor Home Loans

A guarantor loan is the most common way to secure a home loan without a deposit. In this setup, a close family member (usually a parent) uses the equity in their own home as security for your loan.

Pros:

[if !supportLists]· [endif]No need for a cash deposit.

[if !supportLists]· [endif]You can borrow up to 100% of the purchase price (and sometimes even cover stamp duty).

Cons:

[if !supportLists]· [endif]Your guarantor is liable if you default.

[if !supportLists]· [endif]Can strain family relationships if not handled transparently.

2. First Home Guarantee Scheme (formerly First Home Loan Deposit Scheme)

This government-backed program helps eligible first-home buyers purchase with as little as a 5% deposit, without needing to pay Lenders Mortgage Insurance (LMI).

Eligibility criteria:

[if !supportLists]· [endif]Income limits apply.

[if !supportLists]· [endif]Property price caps vary by region.

[if !supportLists]· [endif]Must be an Australian citizen and first-home buyer.

3. Genuine Savings and Gifted Funds

If you can’t meet the full deposit requirement but have some funds (from savings or a gift from a family member), some lenders may consider this enough—especially if you can show a strong income and stable employment.

4. Equity from Other Properties

If you already own another property, you may be able to use your equity as a deposit for your next purchase—another way to buy without fresh savings.

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Risks and Considerations

While buying a home without a deposit sounds attractive, it comes with higher risks:

[if !supportLists]· [endif]Larger Loan Amount: Borrowing 100% of the purchase price increases your repayments and total interest.

[if !supportLists]· [endif]Lenders Mortgage Insurance (LMI): Unless covered by a guarantor or government scheme, borrowing over 80% usually attracts LMI costs.

[if !supportLists]· [endif]Tighter Lending Criteria: Lenders will scrutinise your income, employment history, and spending habits more closely.

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How Efficient Capital Can Help

At Efficient Capital, we understand that not everyone has a sizeable deposit ready. Our expert mortgage brokers work with a wide network of lenders to find the right solution based on your financial situation—whether it’s a guarantor loan, a low-deposit product, or help applying for the First Home Guarantee.

We’ll assess your eligibility, explain the pros and cons, and support you every step of the way—from pre-approval to settlement.

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Final Thoughts

No deposit home loans may not be as common as they once were, but with the right strategy, support, and access to government incentives, buying a home with little or no deposit is still within reach for many Australians.