Buying a home with less than a 20% deposit

While some people believe you need a 20% deposit to buy a home in Australia, there are several options that could help you secure a home loan with less.

By exploring low deposit home loans, government schemes, equity or LMI you could move into your new home sooner.

Let’s take a closer look at some of the options.

Low deposit home loans

If you’re ready to buy but don’t have a 20% deposit saved, a low deposit home loan could help you fast-track your purchase.

Some lenders, like Liberty, offer low deposit home loans that allow you to borrow up to 95% of the property purchase price. This option may suit borrowers with a steady income and strong repayment capacity but limited savings.

Smaller deposit plus LMI

Saving a large deposit can take time, and property prices may continue to rise. For some buyers, it may be more practical to buy a house with a smaller deposit and pay Lenders Mortgage Insurance (LMI), rather than risk being priced out of the market.

Leveraging LMI could help you reach your homeownership goal sooner and start building equity earlier. A Liberty Adviser can help you assess if this option works for your circumstances.

Use your equity

If you’ve owned property for a while, you may have built up equity – your share of the property value.

This equity can potentially be used as security to buy a second property for investment purposes, without requiring another deposit.

Government schemes

The Australian Government offers multiple schemes and grants to help eligible first home buyers enter the property market.

These schemes could make it easier to save for a deposit, allow you to buy with a deposit as low as 5%, or avoid paying LMI.

Explore your options

A deposit of less than 20% doesn’t have to hold you back from buying a home.

For help determining your path forward and finding a free-thinking loan, reach out to a Liberty Adviser in your area today.