Quick answer
A low deposit home loan lets you buy with a smaller upfront contribution than the traditional 20 percent. Many lenders accept deposits around 5 to 10 percent, often with lenders mortgage insurance or a government guarantee. Ownright Custom Finance arranges low deposit loans Australia-wide, including for self-employed buyers, gifted deposits and files that need a closer look.
Key points
- Deposits of 5 to 10 percent are common with some lenders
- Lenders mortgage insurance or a government guarantee often bridges the gap
- Genuine savings, gifts and family help are each treated differently
- Self-employed and hard-case buyers can still be assessed
- Suits
- First home buyers, upgraders and buyers with limited savings
- Security
- The property being purchased
- Extra costs
- Stamp duty, legals and sometimes lenders mortgage insurance
- Australia-wide
- Yes
What is a low deposit home loan?
A low deposit home loan is a mortgage where you put in less of your own money than the old rule of thumb of 20 percent. Instead of saving for years, you borrow a larger share of the purchase price against the property. The trade is that the lender takes more risk, so you will usually meet extra conditions: lenders mortgage insurance, a government guarantee, a guarantor or a tighter look at your income and spending.
It is a perfectly normal way to buy. What matters is choosing the right lender and structure so the smaller deposit does not become a bigger problem later.
How small can a deposit be?
Different lenders set different limits, and the limits move as policies change. Many mainstream lenders are comfortable around 5 to 10 percent for well-documented borrowers. Below that, you usually need a guarantor, a special scheme or a lender that specialises in unusual files.
The deposit is only one of the costs. Stamp duty, conveyancing, inspections, moving costs and any insurance premiums sit alongside it, and your state revenue office can tell you what applies where you are buying. Our loan calculator helps you see how the numbers fit.
What is the First Home Guarantee?
The federal First Home Guarantee, delivered through Housing Australia and participating lenders, lets eligible first home buyers purchase with a 5 percent deposit and avoid lenders mortgage insurance because the government guarantees part of the loan. The scheme was widened from 1 October 2025, including removing the previous income caps and annual place limits, but it still has eligibility rules and property price limits that vary by location. There are related schemes for regional buyers and eligible single parents.
Because details are updated from time to time, always confirm the current rules on the Housing Australia and firsthomebuyers.gov.au sites. If you would like a second pair of eyes on whether you fit, our first home buyer loans page covers hard-case buyers too.
What does a lender look at when the deposit is small?
Genuine savings. Many lenders want to see a record of saving, such as several months of regular deposits. Money that appears suddenly raises questions.
Where the deposit comes from. Savings, a gift, a sale of another asset or a guarantor’s property each carry different treatment.
Income stability. Probation periods, casual work and recent job changes get a closer look. For the self-employed, see our self-employed home loans.
Spending and debts. Credit cards, buy now pay later accounts and other debts reduce what lenders will assess you for. Our guide on serviceability explains why.
The property. Some unit types, small apartments and unusual properties are harder at high loan-to-value ratios. Our guide to LVR is a good primer.
Gift, guarantor or equity: which family help works?
| Type of help | How it works | Things to weigh |
|---|---|---|
| Gifted deposit | Family gives money with a signed gift letter | Not every lender accepts a fully gifted deposit |
| Guarantor | A relative offers their property as extra security | They carry real risk, so independent advice is wise |
| Co-borrower | A family member joins the loan | Affects their borrowing power and credit |
| Equity release | Family borrows against their home to fund the deposit | Adds a second debt that someone must service |
Our pages on guarantor home loans and the broader what is a guarantor guide set out the risks plainly.
How Ownright helps with a low deposit
Trevor Scott and the team have spent decades matching borrowers to lenders, and a low deposit is a lender-matching problem as much as a savings problem. We check whether a government scheme applies, which lenders will read your income kindly and whether insurance, a guarantor or a staged plan gives you the strongest footing.
Where a bank has said no because of a small deposit combined with something awkward, such as irregular income or a blemish on your credit file, we look at non-bank lenders and structures that most brokers never raise. Our non-bank home loans page explains why they can be a valuable path.
An illustration
Illustrative scenario only. A couple on one full-time income and one casual income has a small deposit and a tight timeline because a property they love is heading to auction. A broker could confirm whether they fit the government guarantee, line up a pre-approval with a lender that counts casual income after a set period, and prepare a gift letter for the family contribution well before the auction.
What mistakes should I avoid?
- Spending the deposit on extras and leaving nothing for stamp duty and legals
- Opening new credit or buy now pay later accounts just before applying
- Bidding at auction before pre-approval
- Assuming a gifted deposit is automatically acceptable
- Applying with many lenders at once and cluttering the credit file (see why that hurts)
What documents should I have ready?
- Photo ID and recent payslips, or tax returns and BAS if self-employed
- Savings history, ideally three to six months
- Details of debts, credit cards and any buy now pay later accounts
- A gift letter if family is helping
- The contract of sale or property listing
See the documents guide for a full list.
How does a low deposit affect repayments and flexibility?
A higher loan-to-value ratio means a larger loan, so repayments are higher for the same property and there is less cushion if prices soften. Some lenders also limit features such as offset accounts or certain loan types at high LVRs. This does not make a low deposit a bad idea. It means the budget needs room for rate movements, rising costs and life events. A quick stress test on your numbers, before you sign a contract, is worth the effort. Our offset and redraw page explains how those features can help build a buffer once you are in.
What if I am short on savings but have steady rent history?
Some lenders look at a record of paying rent on time as supporting evidence, although it does not replace savings. Consistent rent payments, a clean bank account and a steady employment history together show good habits. If your deposit is thin, we may suggest waiting a little, using a guarantee scheme or buying a lower-priced property first. The goal is a purchase that works, not simply one that is approved.
Ready to buy with a smaller deposit?
Sounds like you’re looking for a low deposit home loan. We’re the lending experts in making small deposits work, so click the button below and see if you qualify before the next open home.
How it works, step by step
- 1
Step 1
Tell us your savings, income and the kind of property you are chasing.
- 2
Step 2
We check which low deposit routes you could use, including government support if you qualify.
- 3
Step 3
We choose lenders that suit your income type and deposit source, then prepare the application.
- 4
Step 4
We chase approval, contract timelines and settlement so the keys land on time.
Frequently asked questions
How low can a deposit be?
Some lenders will go as low as 5 percent of the purchase price, and a few niche products go lower with a guarantor or special structure. Smaller deposits usually mean extra scrutiny, lenders mortgage insurance and less room for error in your budget. We match the deposit to a lender that is comfortable with it.
What is lenders mortgage insurance?
It is a one-off premium that protects the lender, not you, if a borrower with a smaller deposit defaults. It is typically charged when the loan is above about 80 percent of the property value, and many borrowers add it to the loan. Some government guarantees remove the need for it. We explain the cost for your situation.
What is the First Home Guarantee?
It is a federal scheme run through Housing Australia that guarantees part of a loan so eligible first home buyers can buy with as little as 5 percent deposit without paying lenders mortgage insurance. Rules, price caps and lenders change, so check Housing Australia for current terms. We can tell you whether your plan fits.
Can my parents gift me the deposit?
Often yes, but lenders treat gifts carefully. They commonly ask for a signed gift letter showing the money is a gift, not a loan, and may want to see it in your account for a period. Not every lender accepts gifted funds for the whole deposit, so we check before you make an offer.
Can I buy with a low deposit if I am self-employed?
It can be possible. Self-employed buyers usually need tax returns, BAS or an accountant's letter, and some lenders accept alternative documents. A small deposit adds scrutiny, so preparation matters. Tell us how you earn and what paperwork you hold, and we will look at lenders that read it fairly.
Do I need to save the full deposit before I start looking?
No. A conversation early can show how much you really need, whether guarantee schemes apply and which costs sit on top of the deposit. It can save months of waiting or avoid a bad surprise at contract. We map the path so you know your target.