LOW DEPOSIT HOME LOANS

How IT WORKS?

1ST STEP: CONSULTATION

Complimentary consultation with your FHBA Coach to determine if it suitable

2ND STEP: OPTIONS

Your FHBA Coach will present you a range of low deposit options (if eligible)

3RD STEP: APPLICATION

Your FHBA Coach will submit an application based on your choice of lender/product

4th STEP: APPROVAL

Upon approval, you can now start searching for your first home with confidence

The Options

We are proud to showcase various low deposit home loan options as per below:

< 5% IN SAVINGS

There are still some lenders who are willing to lend more than 95% of your purchase price

SPECIAL LOANS

Various occupations & educational qualifications may qualify for special no LMI loans

CAPITALISE LMI

LMI is one of the largest costs for low deposit loans, this can be added onto your loan balance

NO LMI LOANS

In some areas of Australia, you may eligible for Government backed loans without LMI costs

Check out the latest interest rates on offer for first home buyers

Lowest Fixed Rate

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Lowest Variable Rate

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Lowest Construction Loan Rate

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No Fee Home Loan

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Repayments are based on the dollar value represented in the search fields with P&I repayments and a 30 year loan term.

WHY LOW DEPOSIT HOME LOANS?

Borrowing 95% is relatively difficult compared to other home loans because you’ll need to meet stricter lender criteria to get approved for a low deposit loan.  Each lenders’ policy regarding genuine savings differs slightly so it is a great idea to seek advice from your FHBA Coach / Mortgage Broker first. Lenders mortgage insurance may also be payable.

Low deposit home loans can be quite flexible and tailored to suit your needs. Typically a low deposit home loan suits aspiring first home buyers with the following characteristics:

CASE STUDIES

Case Study 1: Buying with a deposit of less than 5%

Assuming you are from states such as QLD, SA or WA, where the First Home Owners Grants are more than the $10,000 and there are more first home buyer appropriate homes, this option could be a consideration as you could potentially use the increased First Home Owner Grant to pay for the deposit alongside any other savings you may have, without the requirement of genuine savings.

A small handful of lenders that FHBA Mortgages have access to, will allow the 5% deposit to be made up of your saved funds plus the First Home Owner Grant (FHOG). In a QLD example (within the 2016/17 Financial Year), where a first home buyer is buying an FHOG eligible new home; the minimum deposit required could be as little as $6,000 where a property is purchased for approximately $300,000:

Type of Cost Amount
5% Deposit
$15,000
Property Costs
$3,000
LMI
$8,000

Total Deposit Costs

$26,000

Less: QLD FHOG
$20,000
Total Funds Required
$6,000

Case Study 2: Buying with a deposit of 5%

Unfortunately, most lenders, even those who allow 95% loans don’t allow the First Home Owners Grant to make up part of the 5% deposit required.  The FHOG could still be used to cover the associated costs and a small amount would be returned as part of the settlement or alternatively, a slightly lower loan amount could be borrowed. Usually, the lender will require a minimum of 5% being genuinely saved over a minimum period of 3 months.

If you are looking to buy your first home with a 5% deposit and the property is worth $300,000 then you will need to genuinely save a minimum of $15,000 over a period of at least 3 months, some lenders may request 6 months.

If you haven’t been able to genuinely save over 3 months you still may qualify as there are a small handful of lenders that will now treat your rental payments (if you are renting now) as part of your Genuine Savings calculation.

Get started now

Are you interested in one of the loans mentioned above? Or would you like more information on the home loans that are available to you? Simply complete the form below and a first home buyer expert (Broker/Coach) will be in touch with you:

Disclaimer: The information on our website including this page is general in nature and should be solely relied upon. The advertised rates above were true and correct at the time of the publication. The rates do not take into account other fees and charges which you should also consider. The comparison rates are true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The credit license responsible for the mortgage service offered to clients is Mortgage Australia Group Pty Ltd, Australian Credit License (ACL) number 377294, Australian Business Number (ABN) 99 091 941 749. Mortgage Australia Group Pty Ltd is a member of the Mortgage & Finance Association of Australia (MFAA). AKAL & FHBA Pty Ltd is an authorised credit representative of Mortgage Australia Group Pty Ltd. You should seek professional advice when obtaining finance and purchasing your first property.