The 11 Lenders Still Writing 98% Home Loans in April 2026

Ricky Esteb April 16, 2026 · 11 min read

Saving a 20% deposit in 2026 means saving $160,000 on an $800,000 home. At the median household savings rate, that is six to eight years of putting money aside while property prices keep moving against you. It is the single biggest barrier to home ownership right now.

So borrowers reasonably ask: what if I only have 2%?

The answer, pulled from our live panel data this morning, is that there are exactly 11 lenders in Australia that will still write a 98% LVR owner-occupier home loan in April 2026. That is out of 105 lenders we track, covering every major bank, non-bank, mutual and credit union licensed to write home loans in this country. The field has thinned a lot since APRA's serviceability buffer stayed at 3% and non-conforming lenders pulled back from high-LVR space in late 2025.

This article is the full list — who they are, what they actually require, and which ones quietly exclude most borrowers. All figures come from policy data our system pulled from the latest AFG Lender Information Matrix, verified against each lender's current product guide.

How Rare 98% LVR Really Is in April 2026

The distribution is starker than most borrowers realise. Here is where all 105 lenders on our panel currently cap owner-occupier LVR:

Three takeaways worth flagging:

• The 95% tier is still the meat of the market. 40 lenders — including every Big 4 and most mid-tier banks — cap at 95% LVR for a standard low-deposit purchase. That is where most first home buyers actually settle.
• The 98% club has shrunk. Back in Q4 2023 our equivalent pull would have shown 16–18 lenders at 98%. Three non-bank lenders dropped their caps back to 95% during 2024, and a further two tightened in 2025 after APRA held the buffer at 3%.
• The 98% lenders are not the lenders most borrowers know. No Big 4 sits here. The only well-known name is Bankwest, and its 98% is restricted to owner-occupied P&I through a broker channel.

That last point matters. Walking into a Commonwealth Bank branch and asking for a 2% deposit loan gets you rejected at 95%. You have to know where to look.

The Full List: 11 Lenders at 98% LVR (April 2026)

Here is the complete list, with the policy settings that actually decide whether you qualify. "Gift funds accepted" means parent-gifted deposits are counted towards your 2%. "Buffer" is the serviceability buffer on top of the actual rate — 3% is standard APRA; anything lower is favourable.

Credit Union SA deserves an honourable mention at 97% LVR — one percentage point short of 98 but often more accessible than some in the 98 club because it accepts interstate applicants. We have included it in our broader panel comparisons at the end.

Mutual and Professional Banks (6 of 11)

Six of the eleven are professional or mutual banks. Two things to know about this tier.

First, membership is usually required. Firefighters Mutual Bank lends to current and former firefighters and their immediate family. Teachers Mutual and UniBank require you (or a family member) to work or have worked in education or higher education. Health Professionals Bank is for medical, nursing and allied health workers. QBANK is for Queensland emergency service workers, police, public servants and their immediate families. Beyond Bank, Bank Australia and Great Southern Bank are open to the public.

Second, the 98% product is genuinely cheaper than a 95% product at most major banks, because mutuals return profit to members as better rates rather than paying shareholder dividends. We consistently see assessment rates in the 8.38-8.49% range (the rate lenders use to test whether you can service the loan), compared with 8.76-8.99% at the Big 4. On a $600,000 loan, that is roughly an extra $50,000 of borrowing capacity.

The trade-off is process. Mutual banks move slower than a big broker channel — allow 18-25 business days from submission to conditional approval rather than the 3-10 day turnaround you get from Bankwest or Macquarie.

State Government Lenders (2 of 11)

HomeStart Finance and Keystart are unusual entries. Both are owned by their respective state governments — South Australia for HomeStart, Western Australia for Keystart — and exist specifically to help first home buyers who can't get finance elsewhere.

Two features make them stand out:

• A 2.5% serviceability buffer instead of the APRA-standard 3%. That single point of difference increases your borrowing capacity by roughly 5-7% versus any APRA-regulated bank on this list.
• No Lenders Mortgage Insurance on owner-occupier loans up to 98% LVR. Instead they charge a lower Loan Provision Charge (LPC) of roughly 1% of the loan amount. On a $500,000 loan that is the difference between $5,000 (LPC) and $18,000-$25,000 (traditional LMI).

The catch: you must be buying in the state. HomeStart will only lend against SA property; Keystart only against WA property. Their rates are typically 0.20-0.40% above the best broker-channel rate, but over the life of a loan the LMI saving often outweighs the rate premium — particularly for borrowers buying below the scheme's price caps.

That chart highlights the real trap of high-LVR lending: the insurance premium is the bulk of the cost, not the rate. A SA or WA buyer who ignores their state scheme and uses a traditional 98% LVR lender is potentially leaving $15-20K on the table.

Major Bank Exposure at 98%

The only Big 4 or big-brand lender in the 98% club is Bankwest (owned by Commonwealth Bank). Its inclusion is worth a paragraph on its own because it's the one you can walk into a branch and ask about.

Bankwest's 98% policy is owner-occupier only, principal-and-interest only, and requires a broker introduction for best pricing. Genuine savings of 5% still apply — the 2% difference between genuine savings and your deposit typically comes from first home buyer grants, stamp duty concessions, or a family gift. Bankwest accepts all three.

The major banks that didn't make the list — CommBank, Westpac, NAB, ANZ, Macquarie, ING — all cap at 95% LVR. A few will make exceptions for medical, legal or other "professional" borrowers above 90% LVR with LMI waivers. But 98% is firmly off the table from them.

What 98% LVR Actually Costs You

Here is the part most articles skip. High-LVR loans cost more — a lot more — and the cost is front-loaded into LMI. Understanding the real numbers is how you decide whether a 98% loan is a sensible shortcut or a trap.

Take a $600,000 owner-occupier purchase:

Going from a 5% deposit to a 2% deposit on this property adds about $7,000 in extra LMI, roughly $152 per month in extra repayments, and $54,000 over 30 years. In exchange you buy your home roughly 12 months earlier.

Whether that trade is worth it depends almost entirely on one number: how fast the property is appreciating. If prices are moving at 6% per year and you save for another year, that same house becomes a $636,000 property — and you have to save $32,000 more just to cover the 2% buffer on the higher price. In that scenario the 98% loan is cheaper than waiting. In a flat market, it isn't.

On our portal this quarter, 54% of first home buyer applications had a deposit below 10%, and 19% were sub-5%. Most of those will end up buying through the First Home Guarantee rather than a 98% LVR product, because the numbers work better.

First Home Guarantee vs 98% LVR

Before anyone commits to a 98% LVR loan they should run the First Home Guarantee (FHBG) numbers. The FHBG lets eligible first home buyers purchase with a 5% deposit and zero LMI, with the Commonwealth effectively underwriting the 15% gap. It is available through Commonwealth Bank, NAB, Bankwest, and most mid-tier lenders.

On the same $600,000 example, FHBG (5% deposit, no LMI) means a $570,000 loan at around 6.15%, monthly repayments of $3,479. That is $273 per month cheaper than the equivalent 2% deposit 98% LVR loan — while also letting you buy with only $30,000 deposit instead of $12,000 plus $27,000 capitalised LMI.

FHBG eligibility is:

• Singles earning under $125,000 per annum, or couples under $200,000
• Property under the regional price cap (capital city caps range from $700K to $900K; regional vary)
• First home buyer and Australian citizen
• Owner-occupier intent (12-month occupancy minimum)

A 98% LVR loan is the Plan B for borrowers outside those boundaries — single parents above the income cap, buyers above the price cap, non-citizens, second home buyers, or FHBG spots that have already allocated for the financial year. In those cases the 11 lenders above are your market.

How to Qualify at 98% LVR

Four things decide whether any of these 11 lenders will say yes.

1. Genuine savings — usually 5%

Almost every lender on this list wants to see 5% genuine savings — money you have saved in your own name for 3+ months. The remaining 3% of the deposit can come from gifts, grants or concessions, but the 5% genuine savings portion is not negotiable except at HomeStart and Keystart (where it can be waived for buyers under specific concession programs).

2. Stable income

PAYG borrowers need at least 6 months in current role, or 12 months in industry. Self-employed borrowers are often excluded from 98% LVR products entirely — only Bank Australia, Bankwest and the two state government lenders will consider self-employed applicants above 95%, and they typically require 2 full tax returns.

3. Clean credit file

Above 95% LVR, no lender on this list will accept a paid default, a missed repayment in the last 24 months, or an overdue debt over $500. Credit scores below 650 are declined at the door. If you're close to the line, pulling your Equifax file before applying is worth the $30.

4. Serviceability at a 3% buffer

Your actual loan will be assessed at a rate 3% above the product rate (so for a 6.15% loan, servicing is tested at 9.15%). Most of the mutual banks use HEM+higher-of-both-methods for living expenses, which is the strictest setup. You need to show enough surplus after tax, existing debts, HEM-inflated living costs, and the stress-tested repayment.

If you're inside those four boxes, a 98% LVR loan is absolutely possible. If you are outside any of them, your options are narrower — waiting and saving, or partnering with a broker who can place you with the right credit union or specialist lender at 95%.

Frequently Asked Questions

Which Australian lenders still offer 98% LVR home loans in 2026?

11 lenders on our 105-lender panel: Bank Australia, Bankwest, Beyond Bank, Firefighters Mutual Bank, Great Southern Bank, Health Professionals Bank, HomeStart Finance, Keystart, QBANK, Teachers Mutual Bank, and UniBank. Credit Union SA writes to 97%. All other major and mid-tier lenders cap at 95% or below.

Can I get a home loan with a 2% deposit in Australia?

Yes, through the 11 lenders listed above, subject to serviceability, genuine savings, and credit criteria. In most cases 5% of the 98% must be genuine savings in your own name for 3+ months; the remaining 3% can come from gift funds or first home buyer grants.

What is the difference between 95% and 98% LVR?

A 5% versus 2% deposit. On a $600K property that is $30K versus $12K upfront — roughly 12 months less saving for a typical first home buyer. LMI at 98% is meaningfully higher (about $27K versus $20K at 95% on a $600K purchase), so the total cost of borrowing is higher even though the barrier to entry is lower.

Is a 98% LVR home loan a good idea?

Only in specific circumstances. It is rarely the right choice if you qualify for the First Home Guarantee, which achieves the same result with a 5% deposit and no LMI. It is often the right choice if you are priced out of FHBG (above the income or price cap) and property prices are rising faster than your savings rate. Run both scenarios before committing.

What is LMI on a 98% LVR loan?

Approximately 3.5-5% of the loan amount, varying by lender and loan size. On a $600K purchase with 98% LVR ($588K loan) expect $20,500-$29,400 in LMI. Most lenders allow you to capitalise the LMI, which pushes your effective LVR above 100% and lifts monthly repayments.

Who is eligible for the First Home Guarantee instead of 98% LVR?

Single first home buyers earning under $125,000 per annum, or couples under $200,000, buying under the price cap (varies by location). For most buyers this is significantly cheaper than a 98% LVR loan. Places are limited each financial year — check availability before planning around it.

Do all 11 lenders require 5% genuine savings?

Nine of the 11 require 5% genuine savings. Beyond Bank and Great Southern Bank apply a higher 20% rule in some circumstances (check at application), and HomeStart/Keystart waive genuine savings for buyers using specific SA/WA government concession schemes.

How long does a 98% LVR approval take?

Typically longer than standard lending. Expect 18-25 business days from submission to conditional approval for the mutual and professional banks, and 3-10 days for Bankwest via broker channel. Allow an extra 5-10 business days for unconditional because LMI has to be underwritten separately.

Richard Esteb

Licensed Mortgage Broker & Founder

Credit Rep #574071 | ACN 681 636 056

With 11+ years of experience inside private lending, Ricky founded Esteb and Co to bring transparency and technology to mortgage broking. He has sat on both sides of the table - as a lender and as your advocate.