Owning a home is a major goal for many Australians, but saving for a deposit can feel impossible—especially with rising living costs and high property prices. The traditional requirement of saving a 20% deposit is often a huge barrier for first home buyers. However, there are legal and accessible ways to get a home loan with no deposit in Australia, even in 2025.
In this guide, you’ll learn exactly how to buy a house without a deposit using strategies that banks, mortgage brokers, and even the government support.
What Is a No Deposit Home Loan?
A no deposit home loan allows you to purchase a home without contributing any of your own money upfront. This means borrowing up to 100% of the property’s value. While not every lender advertises these loans, they are available—typically through the help of a guarantor or via specific government programs for first-time buyers.
Getting a no deposit home loan doesn’t mean skipping financial responsibility. You still need to show stable income, low debt, and good credit. The deposit may come from alternative sources, like a guarantor’s property or equity from another asset.
Who Can Apply for a No Deposit Home Loan?
You may qualify if you meet certain criteria, such as:
- A stable job and income
- A clean credit history
- A low debt-to-income ratio
- A guarantor who owns property with equity
- Eligibility for government-supported schemes
If you’re a first home buyer in Australia, especially in cities like Sydney, Brisbane, or Melbourne, where property values are high, knowing these options can be a game changer.
How to Buy a House Without a Deposit: 5 Proven Options
1. Use a Guarantor
One of the most effective ways to secure a no deposit loan is by having a family member act as a guarantor. This is commonly referred to as a family guarantee home loan.
A guarantor uses the equity in their property to secure your loan. This allows you to borrow up to 100% of the purchase price and, in most cases, avoid paying Lenders Mortgage Insurance (LMI).
Lenders such as ANZ, NAB, Westpac, and Commonwealth Bank offer guarantor-backed loans. The guarantor isn’t providing cash—they’re simply offering part of their property as security.
Make sure both you and your guarantor understand the risks. If you default on the loan, the guarantor could be liable for the shortfall.
2. Government Schemes for First Home Buyers
The First Home Guarantee Scheme (previously called the First Home Loan Deposit Scheme) allows eligible first-time buyers to purchase a property with as little as a 5% deposit, without the added cost of LMI.
In some cases, that 5% can come from a gifted deposit or even a personal loan, making it functionally a no deposit loan.
To qualify:
- You must be an Australian citizen or permanent resident
- You must not have previously owned property
- Your income must be under $125,000 for singles or $200,000 for couples
Approved lenders under this scheme include major and regional banks. These government-backed programs help thousands of Australians enter the property market each year, especially in affordable areas or regional zones.
3. Use Equity from Another Property
If you already own a property—whether it’s your own or co-owned with a family member—you may be able to use the available equity as a deposit for a new loan. This strategy is commonly used by investors or existing homeowners looking to upgrade or buy a second property.
Equity is the difference between your property’s current value and your outstanding mortgage balance. Lenders can use this equity as security for a new loan, enabling you to borrow the full value of your next property without providing additional cash.
4. Personal Loan as Deposit
Another method is to use a personal loan to fund your deposit, effectively making your home loan a no deposit loan.
While this approach is riskier, it may work if you have a strong credit profile and income to service both loans. Keep in mind that not all lenders accept this structure, and your borrowing power may be reduced as a result.
This option works best if you’re only borrowing a small percentage of the deposit (for example, topping up a 3% deposit to meet a 5% minimum). Always speak to a licensed mortgage broker to assess your financial situation before taking this route.
5. Rent-to-Own and Vendor Finance Agreements
In a rent-to-own or vendor finance arrangement, you rent the property for a set period while gradually building up equity toward a future purchase.
This arrangement typically involves higher-than-market rent, with part of the payment going toward the eventual deposit or purchase. At the end of the lease, you buy the home at an agreed price.
These agreements aren’t as common, and they come with risks. However, for those with poor credit or no deposit savings, this can be a useful stepping stone into property ownership.
What Banks Look For If You Don’t Have a Deposit
Even if you don’t have a cash deposit, you must still demonstrate financial discipline. Lenders will closely examine:
- Your employment history (preferably stable for at least 6–12 months)
- Your income-to-expense ratio
- Your credit score and history of debt repayment
- Recent bank statements to check spending habits
If you’re applying through a guarantor or government scheme, banks will also assess the guarantor’s financial situation and the property’s location and value.
Consider the Risks Before Committing
While no deposit loans offer a way into the housing market, they are not without risk.
Some important considerations:
- You’ll have a larger loan and higher monthly repayments
- You might end up with negative equity if property values fall
- If using a guarantor, their financial assets are also at risk
- Extra fees and costs, such as stamp duty, legal fees, and building inspections, still need to be paid upfront in most cases
Getting advice from a mortgage broker can help you weigh the pros and cons for your situation.
Where to Find Affordable Homes in 2025
If you’re entering the market with no deposit, targeting affordable or regional areas can increase your chances of approval and long-term success.
Some of the best value suburbs in 2025 for first home buyers include:
- Werribee (VIC)
- Ipswich (QLD)
- Elizabeth (SA)
- Campbelltown (NSW)
- Armadale (WA)
These areas often qualify for additional state government first home owner grants, making your home loan journey even more achievable.
Final Thoughts
It may sound too good to be true, but getting a home loan with no deposit is possible in Australia—especially with the right preparation and support. Whether through a guarantor, government scheme, or alternative finance strategy, many Aussies are finding their way into the market faster than ever before.
The key is to:
- Understand your financial position
- Seek advice from a mortgage broker
- Explore every option available
- Be realistic about the property you can afford
Entering the property market without a deposit isn’t easy, but it’s far from impossible.
Need Help?
If you’re serious about buying a home with no deposit in Australia, speak with a professional mortgage broker. They can guide you through lender options, government assistance, and financial strategies tailored to your situation.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always seek advice from a licensed mortgage broker or financial advisor before making financial decisions.