Here’s something not everyone realises: You can actually buy a home in Australia without a deposit.

Most standard home loans require a deposit of at least 5% to 20%, which can take years to save. But with the right support, such as a guarantor or access to a government-backed scheme, you could borrow the full purchase price and get into the market much sooner.

They’re not for everyone, and there are a few hoops to jump through, but if you understand how it works and whom it’s designed for, it can help you get into the property market faster.

Let’s break down how no-deposit home loans work, who’s eligible, and how to improve your chances of getting approved.

What Is A No-Deposit Home Loan?

A no-deposit home loan, also known as a 100% home loan or zero-deposit loan, is a type of home loan that allows you to borrow the full purchase price of a property without needing to contribute an upfront deposit. Typically, lenders require at least a 5% to 20% deposit before approving a home loan. With a no-deposit loan, that requirement is removed through alternative support.

The most common type of zero-deposit home loan is a guarantor loan, in which a family member offers their property as security.

How Do No-Deposit Home Loans Work?

No-deposit home loans work by replacing the need for a cash deposit with alternative forms of security or financial backing.

Here are the most common ways this works:

1. Guarantor Home Loan

This is the most common way to get a no-deposit home loan. A close family member, typically a parent, offers part of their property’s equity as security for your loan. With this support, you can even borrow up to 110% of the property value, which covers not just the purchase price but also extra costs like stamp duty, legal fees, and moving expenses. It’s worth noting that without a guarantor, no lender will offer more than 100% of the property’s purchase price.

The guarantor must be an immediate family member, have enough equity in their home, and be willing to provide a limited guarantee. Most lenders will also require them to get independent legal and financial advice before the loan is approved. As you build equity in your property and pay down the loan, the guarantor can be released from the agreement.

As the borrower, you’ll need to show strong repayment capacity and have enough funds to cover upfront costs associated with the purchase. If you’re borrowing up to 100% with a guarantee, many lenders will want to see genuine savings (usually 5% of the property value held for at least three months).

2. Use Equity As A Deposit

If you already own a property, you may be able to use the equity you’ve built up as a deposit for a new home. This is a popular option for current homeowners who want to upgrade, invest, or buy a second property without dipping into their savings

If you have sufficient equity, then you don’t need any savings at all. You can use your existing equity as a deposit by refinancing. In some cases, lenders may even offer a cash rebate to refinance. We can value your property for free and let you know if this option is available to you.

To qualify for this strategy, you have to have enough usable equity built up in your current property in Australia.

Lenders assess serviceability by looking at your income, expenses, and debts to make sure you can comfortably manage the loan repayments.

Learn more about equity loans and how they work.