There's no such thing as a genuine "no deposit" loan any more. There are real ways to buy with barely any.
Since the responsible-lending era, mainstream lenders don't hand ordinary borrowers a 100% loan. So "no deposit" really means one of three legitimate routes: the Government 5% Deposit Scheme, the 2% single-parent guarantee, or a family guarantor. Each bridges the gap to 20% — and each still needs you to genuinely afford the repayments. Here's how they work, honestly, including the risks of a small deposit.
Almost nobody has 20% saved. Here's how the gap actually gets bridged.
A 20% deposit is the point where lenders don't charge Lenders Mortgage Insurance (LMI). Most low-deposit buyers can't wait to save it — so they bridge the gap a legitimate way. On the national median dwelling value, 20% is roughly $184,000 and a 5% deposit is roughly $46,000. Three routes close what's in between.
The 5% Deposit Scheme
You put in 5%; Housing Australia guarantees the lender for the gap to 20%, so it's treated as a 20%-equity loan. From 1 October 2025 there are no income caps and no cap on places. For eligible first home buyers — citizens or permanent residents, 18+, buying to live in.
No LMI payableFamily Home Guarantee (2%)
Eligible single parents and single legal guardians of at least one dependent child can buy or build with a deposit from as little as 2% — Housing Australia guarantees up to 18% of the value. You need not be a first home buyer, subject to not currently owning a home.
No LMI payableA family guarantor
Outside the scheme, a relative pledges equity in their own property as extra security, lifting you to an effective 80% LVR without a 20% cash deposit. Powerful — but the guarantor's own home is on the line if you default, so they should get independent legal advice.
No LMI payableSkip the scheme and a guarantee, and the gap has a price tag: LMI.
Borrow at 95% LVR (a 5% deposit) with no scheme place and no guarantor, and the lender charges Lenders Mortgage Insurance — a large one-off premium that protects the lender, not you. Indicatively:
LMI can usually be added to the loan — but then you pay interest on it for the loan term. The premium climbs steeply as your deposit shrinks. This is exactly what the 5% scheme or a family guarantee saves.
Bridging the deposit is only half the test. Lenders still assess whether you can genuinely service the loan against a rate buffer — a smaller deposit never lowers that bar. And at 95% LVR, only a small price fall can push you into negative equity: national dwelling values fell 0.4% in June 2026. Dollar figures use the national median dwelling value (indicative, ~$922,838, Cotality Feb 2026) and percentages of it; actual deposits, caps, premiums and eligibility depend on the property, lender and your circumstances. Not an offer of credit.
The deposit has become the wall. That's why these routes matter.
Saving a full 20% has moved out of reach for many households — which is the whole reason low-deposit pathways exist. But it's also the stretched context you'd be buying into, so serviceability, not just deposit, has to stack up.
Source: Cotality (formerly CoreLogic) Housing Affordability Report, Australia (November 2025, data to the September 2025 quarter). These figures show why buyers seek a 5% or scheme-backed pathway — and why lenders scrutinise low-deposit applications closely.
Three legitimate pathways — and what to check on each.
1 · The Government 5% Deposit Scheme
Formerly the First Home Guarantee. You buy with as little as 5% and pay no LMI because Housing Australia guarantees the lender for the gap to 20%. From 1 October 2025 the income caps were removed and the cap on places (previously about 35,000 a year) was lifted.
You apply through a participating lender, not Housing Australia directly. Both the price and the assessed value must sit at or under the property price cap for your area (table below).
2 · The 2% single-parent guarantee
The Family Home Guarantee lets an eligible single parent or legal guardian of a dependent child buy or build with a deposit from 2%, no LMI, with Housing Australia guaranteeing up to 18% of the value.
Same citizenship, residency and property-cap rules as the 5% scheme. You don't have to be a first home buyer, provided you don't currently own a home. More on our single-parent home loans page.
3 · A family guarantor
A relative uses equity in their own property as additional security, so you reach an effective 80% LVR without a 20% cash deposit — avoiding LMI. LMI protects the lender, not you, so avoiding it is a genuine saving.
The serious caveat: the guarantor's home is at risk if you default, and they should take independent legal advice. Full detail on our guarantor loans page.
The scheme only works up to a price cap — and it varies by area.
Both the purchase price and the assessed value must be at or below the cap for your location. These are the caps in effect from 1 October 2025 (Darwin's rose to $750,000 from 1 July 2026). Re-check the current table before you rely on it — caps are reviewed periodically.
| State / territory | Capital city & regional centres | Rest of state |
|---|---|---|
| NSW | $1,500,000 | $800,000 |
| VIC | $950,000 | $650,000 |
| QLD | $1,000,000 | $700,000 |
| WA | $850,000 | $600,000 |
| SA | $900,000 | $500,000 |
| TAS | $700,000 | $550,000 |
| ACT | $1,000,000 | — |
| NT | $750,000 (Darwin) | $600,000 |
| Jervis Bay & Norfolk Island | $550,000 | — |
| Christmas & Cocos Islands | $400,000 | — |
Source: firsthomebuyers.gov.au (Housing Australia) — Property Price Caps, effective 1 October 2025; NT/Darwin change effective 1 July 2026. Accessed July 2026. Caps are periodically reviewed — confirm the live figures for your area before committing.
A low deposit gets you in sooner — it also increases your risk.
Buying with little deposit isn't a shortcut; it's a considered trade-off. The honest picture:
LMI, or a guarantor's home on the line. Without the scheme or a guarantee you pay LMI — a cost that protects the lender, not you. A guarantee instead puts a relative's property at risk.
Bigger loan, higher repayments. Borrowing more means larger repayments and far more total interest over the life of the loan.
Negative-equity exposure. With only a thin equity buffer, a modest price fall can leave you owing more than the home is worth — a real problem if you need to sell or refinance. National values fell 0.4% in June 2026.
Tighter serviceability. Lenders assess your repayments against an interest-rate buffer above the actual rate — a low deposit sharpens, not softens, that test.
Sources: ASIC MoneySmart (LMI and home-buying guidance); APRA serviceability-buffer practice; Cotality/CoreLogic Home Value Index (June 2026). Maximising leverage magnifies both gains and losses. This is general information, not personal credit or financial advice — consider your own circumstances and seek advice.
Bridging the deposit doesn't lower the serviceability bar
Whichever route you take, the lender still assesses your income, expenses and credit history against the full loan. A smaller deposit never reduces what you must prove about affordability — if anything, high-LVR lending gets the closest scrutiny. The honest starting point is a look at your income, savings, credit file and family situation, then mapping which pathways are genuinely open to you.
General information only — not personal credit, tax or financial advice. Scheme rules, price caps and lender policies change; we confirm current criteria against your situation before you commit to anything.
No & low deposit home loans, answered straight.
Can I really buy with no deposit in Australia?
Not through a genuine 100% loan — mainstream lenders no longer offer those to ordinary borrowers. What is real is a very low deposit through a legitimate route: the Government 5% Deposit Scheme, the 2% single-parent Family Home Guarantee, or a family guarantor whose equity covers the gap to 20%. Each still requires you to genuinely service the loan.
What is the Government 5% Deposit Scheme?
It's the First Home Guarantee, run by Housing Australia. An eligible first home buyer can purchase with as little as a 5% deposit and pay no LMI, because Housing Australia guarantees the lender for the gap to 20%. From 1 October 2025 there are no income caps and no cap on the number of places. You apply through a participating lender, and the property must be at or below the price cap for your area.
How is the single-parent scheme different?
The Family Home Guarantee lets an eligible single parent or single legal guardian of at least one dependent child buy or build with a deposit from as little as 2%, with no LMI — Housing Australia guarantees up to 18% of the value. You don't have to be a first home buyer, as long as you don't currently own a home. The same citizenship, residency and property-cap rules apply.
What is LMI, and how do these routes avoid it?
Lenders Mortgage Insurance is a one-off premium charged when you borrow above about 80% of the value. It protects the lender if you default — not you. Indicatively it's around $17,028 on a $500,000 purchase or $26,305 on a $600,000 purchase at 95% LVR, and it rises steeply as your deposit shrinks. Both the Government scheme and a family guarantee remove the need for LMI, which is a genuine saving. Figures are indicative only and vary by insurer, lender and profile.
How does a family guarantor work?
A relative pledges equity in their own property as additional security, lifting you to an effective 80% LVR without a 20% cash deposit — so no LMI. The guarantee is limited to a set amount and released once you build enough equity. The important caveat: the guarantor's home is at risk if you default, and they should get independent legal advice. Full detail is on our guarantor loans page.
What are the risks of buying with a small deposit?
You either pay LMI or put a guarantor's home at risk; you borrow more, so repayments and total interest are higher; and with a thin equity buffer a modest price fall can leave you in negative equity — national dwelling values fell 0.4% in June 2026. Lenders also assess repayments against a rate buffer above the actual rate. A low deposit gets you in sooner but raises your risk — it should be a considered choice.
What upfront costs are there besides the deposit?
Stamp duty (unless you qualify for a first home buyer concession or exemption in your state), conveyancing and legal fees, building and pest inspections, lender application and valuation fees, and moving costs. Even on genuinely low-deposit routes, most buyers need real cash for these — and it's sensible to keep a buffer after settlement.
So what deposit do I actually need?
It depends on the route: as little as 5% under the Government scheme if you're eligible, 2% under the single-parent guarantee, or potentially no cash deposit with a full family guarantee. Otherwise, a smaller deposit plus LMI with lenders that accept it. The honest first step is assessing your income, savings, credit file and family situation, then mapping which pathways are genuinely open to you.
Not sure which route is open to you? Let's map it.
Tell us about your deposit, your income and your situation — we'll check the current scheme rules, weigh a guarantor against LMI, and show you the pathways that genuinely fit, across our panel of 50 lenders. No credit check to start.
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