Can You Buy a House With No Deposit in Australia?

After the GFC, 100% loan-to-value-ratio (LVR) loans largely disappeared from the Australian market. APRA, ASIC, and lender risk policy now treat true zero-deposit home loans as high-risk and they are rarely available outside very narrow circumstances (for example, some lender-staff loans or specialist scenarios). What people usually mean by 'no deposit' is one of three things: • A family guarantor loan, where parents or close family use equity in their home so you do not need to fund a deposit yourself • A government-backed scheme like the First Home Guarantee, which allows a 5% deposit with no Lenders Mortgage Insurance • A small-deposit loan (2% to 5%) where Lenders Mortgage Insurance is paid or capitalised into the loan Each pathway has its own eligibility, structure, and trade-offs. The right choice depends on your savings, family situation, income, and target purchase price.

A family guarantor loan (sometimes called a family pledge or security guarantee) lets a family member, usually a parent, use equity in their home as additional security for your loan. The guarantor does not give you cash; they offer a slice of equity (typically 15% to 20% of your purchase price) as a top-up security. With a guarantor in place, you can borrow up to 105% of the purchase price (covering the property plus stamp duty and costs) without needing a deposit and usually without Lenders Mortgage Insurance. Key points: • The guarantor's liability is limited to the guaranteed portion, not the whole loan • Most lenders allow the guarantee to be released once your LVR drops below 80% through repayments and/or property growth • The guarantor's own loan capacity is impacted while the guarantee is in place • Independent legal advice for the guarantor is mandatory (usually a one-off solicitor cost of around $300 to $500) Family guarantor loans are widely available and remain the cleanest 'no deposit' pathway in 2026 for borrowers with supportive family.

The First Home Guarantee (FHBG), administered by Housing Australia, lets eligible first home buyers purchase with as little as a 5% deposit, with the federal government guaranteeing the gap to 20%. This means no Lenders Mortgage Insurance and a much smaller upfront cash requirement. For 2026, the scheme is open to a wider audience following expansion announcements, including the removal of strict caps on places. Property price caps still apply by location and are reviewed periodically. Indicative caps include higher tiers for Sydney, Melbourne, and Brisbane and lower tiers for regional areas. Always check the current caps at housingaustralia.gov.au before targeting a price point. Related schemes worth knowing: • Family Home Guarantee: 2% deposit for eligible single parents and single legal guardians • Regional First Home Buyer Guarantee: similar to FHBG with regional-specific caps (where active) • Help to Buy: a federal shared-equity scheme allowing the government to take an equity stake of up to 30% (existing) or 40% (new) of your home Eligibility includes income tests, citizenship or permanent residency, and owner-occupier intent.

If you have some savings but less than 20%, you can still buy by paying Lenders Mortgage Insurance (LMI) on top of your loan. LMI is a one-off premium that protects the lender (not you) if you default, and it is typically capitalised into the loan. Indicative LMI costs for a $700,000 purchase: • 5% deposit ($35,000): LMI roughly $25,000 to $35,000 • 10% deposit ($70,000): LMI roughly $12,000 to $20,000 • 15% deposit ($105,000): LMI roughly $5,000 to $10,000 Some professions (medical, legal, accounting, engineering) qualify for LMI waivers at 90% LVR with select lenders, which removes the cost while keeping the small deposit. LMI is a real cost but should be compared against the cost of waiting and saving more while property prices and rents grow. For many buyers in growth markets, paying LMI to enter the market 18 to 24 months earlier is the cheaper outcome long-term.

This is general information only, not personal credit advice. Your actual options depend on your full financial picture, including your income, deposit, credit profile, and the specific loan structure you need. Speak with a licensed broker for advice tailored to your situation.