No deposit home loans
Rising interest rates and a higher cost of living are making it more difficult and
taking longer for people to own their own homes. No deposit home loans or 100% plus
home loans allow borrowers to enter the market without the mainstream 10%-20% deposit.
No deposit home loans are available to owner occupiers only and may require extra
proof of income, employment and savings history, and may incur extra fees.
Advantages of No deposit home loans
- No need to save the 5 – 10% deposit typically required by bank and non-bank lenders.
- Faster way to own your own home
- More no deposit loans are becoming available, therefore raising competition and
generating more attractive rates and conditions
- Get out of the rent cycle faster
Considerations – No deposit home loans
- Borrowers may have to demonstrate a greater ability to service the loan
- The lender may require a ‘buffer’ of 2 – 3% to ensure that the borrower can deal
with future interest rate rises
- higher interest rates
- A higher degree of stability and continuity of employment may be required
- Borrowers have extra costs and fees, including stamp duty, conveyancing, and legal
fees
No deposit home loans are suitable for
No deposit loans are suitable for all home buyers who have a strong employment history,
little savings (to cover initial set-up costs) but not enough for a deposit, and
are capable of meeting regular home loan repayments with a reliable income.