Borrow 100% of Home Loan? Discover Your Options Now
Struggling to secure a full home loan? Uncover proven ways to get the funding you need. Take control of your home buying journey today.
Are you dreaming of owning a home but worried about the upfront costs? You're not alone. For many Australians, the thought of saving a significant deposit while dealing with day-to-day expenses can feel overwhelming. The good news is that there are ways to navigate this challenge, and understanding your home loan options is a crucial step. In this post, we'll explore whether it's possible to borrow 100% of your home loan in 2026 and what you need to know to make an informed decision.
Understanding 100% Home Loans
In the past, 100% home loans, also known as no-deposit home loans, were more readily available. These loans allowed borrowers to finance the entire purchase price of a property without needing a deposit. However, financial regulations and a focus on responsible lending practices have made these loans rare today.
As of 2026, most lenders require a minimum deposit of 5% to 20% of the property's value. This shift is largely due to the increased focus on reducing financial risk for both lenders and borrowers. Lenders need to ensure that borrowers can manage their mortgage repayments without undue stress, while borrowers are protected from overextending financially.
Current Rates, Requirements, and Options
Current interest rates for home loans in Australia typically range from 6.49% to 12%, depending on factors such as the lender, loan type, and borrower’s financial situation. While 100% home loans are not commonly offered, there are still options for those who need to borrow more than the conventional amount.
| Loan Type | Interest Rate | Deposit Required |
|---|---|---|
| Standard Home Loan | 6.49% - 8.5% | 5% - 20% |
| Low Deposit Loan | 7% - 9% | 5% - 10% |
| Guarantor Loan | 6.75% - 8% | 0% (with conditions) |
One viable option for borrowing more than 80% of the home value is through a guarantor loan. A guarantor, typically a family member, uses their property as additional security. This can sometimes allow you to borrow up to 100% of the purchase price, or even more to cover additional costs such as stamp duty.
Steps to Secure a High LVR Loan
For those considering a high Loan-to-Value Ratio (LVR) loan, such as a guarantor loan, here's a step-by-step guide:
- Assess Your Financial Situation: Begin by evaluating your income, expenses, and existing debts. Use a budget planner to understand how much you can afford in loan repayments.
- Talk to a Mortgage Broker: Engage with experts like Esteb and Co, who have access to a panel of 83+ lenders. They can provide insights into which lenders might be open to offering high LVR loans.
- Find a Suitable Guarantor: If considering a guarantor loan, identify a person willing to act as a guarantor and discuss the implications with them.
- Gather Necessary Documentation: Collect your income statements, credit history, and any other required documents to streamline the application process.
- Apply for Pre-Approval: Submit your application for pre-approval to understand how much you can borrow and at what terms.
- Conduct Property Research: Choose a property that fits within your budget and meets lender guidelines.
- Finalise the Loan: Once you have found a suitable property, work with your broker and lender to finalise the loan offer.
Tips and Considerations
Navigating the world of home loans can be challenging, but these tips can help make the process smoother:
- Understand Lender's Mortgage Insurance (LMI): If borrowing over 80% of the property value without a guarantor, you may need to pay LMI, which can be a significant cost.
- Maintain a Good Credit Score: A strong credit score can improve your chances of securing favourable loan terms.
- Consider Future Financial Stability: Ensure that you can comfortably manage repayments even if interest rates rise.
- Seek Professional Advice: Consult with financial advisors and mortgage brokers to ensure you're making informed decisions.
- Prepare for Additional Costs: Beyond the deposit, be aware of other costs like stamp duty, legal fees, and moving expenses.
Frequently Asked Questions
- 1. Can I still get a 100% home loan in 2026?
- While traditional 100% home loans are rare, using a guarantor can potentially allow you to borrow up to 100% of the property's value.
- 2. What is a guarantor loan?
- A guarantor loan involves a third party, usually a family member, providing additional security to the lender, allowing the borrower to access higher LVR loans.
- 3. Will I need to pay Lender's Mortgage Insurance (LMI)?
- If you borrow more than 80% of the property's value without a guarantor, you will likely need to pay LMI.
- 4. How can Esteb and Co assist me?
- Esteb and Co can guide you through the home loan process, offering access to a wide range of lenders and helping you find the best loan for your needs.
- 5. Is my credit score important when applying for a home loan?
- Yes, a good credit score can improve your chances of securing a loan with favourable terms.
- 6. What other costs should I be aware of when buying a home?
- Aside from the deposit, be prepared for additional costs like stamp duty, legal fees, and any applicable moving expenses.
- 7. How can I improve my chances of loan approval?
- Maintaining a strong credit history, ensuring a stable income, and engaging with a knowledgeable mortgage broker can all enhance your chances of approval.
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With direct experience helping Australians secure home loans, car finance, and business funding, Ricky founded Esteb and Co to bring transparency and technology to mortgage broking.