Can I Get a Mortgage Without a Deposit?

Here’s a question we hear constantly from first-time buyers on the Gold Coast: “Can I get a home loan without a deposit?” The short answer is yes, but it’s not as simple as walking into a bank and asking for one.

While a traditional 20% deposit is ideal, several “rent-to-buy no deposit home” loans and low-deposit options exist that can get you into the property market sooner than you think. The catch? You’ll need to meet specific criteria, and you’ll likely pay more in fees and interest.

Let’s break down exactly how no deposit home loans work, what your real options are, and whether this path makes sense for your situation.

Quick Answer

• Yes, you can get a home loan with no deposit, or little deposit, but most options require a family guarantee, government assistance, or higher costs through Lenders Mortgage Insurance (LMI)
• Rent-to-buy no deposit home loans schemes let you build equity whilst renting, with rent payments contributing toward the purchase price
• Government schemes like the First Home Guarantee allow eligible buyers to purchase with as little as 5% deposit (not zero, but close)
• Family guarantee loans use a family member’s property equity instead of cash deposit
• Expect higher costs: LMI can add $10,000-$30,000+ to loans under 20% deposit, and interest rates may be higher

Can You Really Get a Home Loan Without a Deposit?

Technically, 0 deposit home loans do exist in Australia, but they’re not handed out freely. Lenders see no-deposit borrowers as higher risk because you have no financial skin in the game if property values drop. That said, if you’ve got stable employment, good credit, and ideally some form of security (like a family guarantee), you’ve got genuine options.

The most common pathway to a no deposit mortgage is through a family guarantee loan, where a parent or close relative uses equity in their property as security for your loan. This means you can borrow 100% (or even up to 105% to cover costs) without needing a cash deposit. The lender feels secure because they’ve got two properties backing the loan – yours and your guarantor’s.

Another increasingly popular option is rent-to-buy no deposit home loans, where you essentially rent a property with an agreement to purchase it later. A portion of your rent payments goes toward building equity in the property, which then becomes your deposit when you’re ready to buy. These schemes work well for buyers who can afford rent but struggle to save whilst paying market rent rates. They are more useful for first-home buyers, rather than those looking at getting a second mortgage.

Your Options for a Home Loan With No Deposit

If you’re serious about getting a home loan with no deposit on the Gold Coast, here are the realistic pathways:

Family Guarantee Loans

This is when parents or a close family member uses 10-20% of their property’s equity to guarantee your loan. You can borrow up to 100-105% of the property value, avoiding both a cash deposit AND Lenders Mortgage Insurance.

Once you’ve built around 20% equity (through repayments and property growth), the guarantee can be removed. This is the cleanest way to enter the market with zero upfront cash.

First Home Guarantee Scheme

Whilst not technically a 0 deposit home loan, the government-backed First Home Guarantee lets eligible first home buyers purchase with just a 5% deposit and no LMI. You’ll need to be an Australian citizen, earn under $125,000 as a single or $200,000 as a couple, and buy a property under the regional price cap ($800,000 for the Gold Coast in 2024-25). That means you’d need $40,000 for an $800,000 property – not nothing, but far more achievable than $160,000.

Rent-to-Buy No Deposit Home Loans

These schemes (sometimes called “rent-to-own” or “lease purchase”) let you move into a property as a tenant with the option to buy it later. Part of your rent (typically 10-25%) is credited toward the purchase price, building your deposit over 1-3 years.

You’ll usually sign a purchase contract upfront with a locked-in price, which protects you if property values rise. The downside? You’re locked into one property, and if you can’t secure finance when the purchase date arrives, you may lose your rental credits.

Lender Equity Schemes (Limited Availability)

A handful of lenders and state government programs offer shared equity schemes, where the lender or government buys a stake in your property (typically 10-40%) in exchange for you needing less deposit. You’ll own the rest, live in the property, and eventually buy out their share. Availability is limited and usually restricted to first home buyers under income caps.

What You Need to Know About 0 Deposit Home Loans

Before you jump at a no deposit mortgage, understand the trade-offs:

Lenders Mortgage Insurance (LMI) Costs

If you’re borrowing more than 80% of the property’s value without a family guarantee, you’ll pay LMI – a one-off insurance premium that protects the lender if you default. LMI on a 95% loan can cost $15,000-$30,000 for a $600,000 Gold Coast property. On a 100% loan? Even higher. This cost is usually capitalised into your loan, meaning you’re paying interest on it for 30 years. A family guarantee bypasses LMI entirely, which is why it’s the preferred option if available.

Higher Interest Rates

Lenders charge higher rates on high loan-to-value ratio (LVR) loans because the risk is greater. You might pay 0.25-0.50% more on a 95% LVR loan compared to an 80% LVR loan. Over 30 years, that can cost you tens of thousands in extra interest. Working with an experienced mortgage broker on the Gold Coast helps you find lenders offering competitive rates for low-deposit scenarios.

Tougher Eligibility Criteria

Lenders scrutinise home loan with no deposit applications closely. You’ll need:

• Proven savings history (yes, even if you’re using a guarantor – lenders want to see you can manage money)
• Stable employment (usually 6-12 months in current job, or longer if self-employed)
• Clean credit history (no defaults, minimal credit card debt)
• Strong income-to-debt ratio (your repayments shouldn’t exceed 30-35% of your income)

If you’re a first home buyer, your mortgage broker can help you present your application in the strongest light possible, including evidence of genuine savings or rent payment history.

Property Valuation Risk

When you put down zero deposit, you’re starting with zero equity. If Gold Coast property values drop 5-10% shortly after you buy, you could end up owing more than your property is worth (negative equity). This becomes a problem if you need to sell or refinance before you’ve paid down enough principal. It’s not a disaster if you can hold long-term, but it’s a risk worth understanding upfront.

Is a No Deposit Mortgage Right for You?

A no deposit mortgage makes sense if:

• You’ve got a family member willing and able to act as guarantor
• You’re renting and paying enough that homeownership repayments would be similar or less
• Gold Coast property prices are rising, and you’re worried about being priced out
• You’re confident in your job security and income growth
• You’re planning to hold the property long-term (5+ years minimum)

It’s probably NOT the right move if:

• You’re stretching to afford repayments even without a deposit
• Your job situation is unstable, or you’re self-employed without a consistent income
• You haven’t demonstrated any savings discipline (lenders will notice)
• You’re buying purely as a short-term investment property flip

Get Expert Help To Navigate No Deposit Home Loan Options

The path to homeownership doesn’t always require a massive deposit sitting in your savings account. With the right strategy, the right lender, and expert guidance, you can get into the Gold Coast property market sooner than you thought possible and start building equity instead of paying someone else’s mortgage.

Our team of mortgage brokers on the Gold Coast specialise in finding the right lending solutions for first home buyers, refinancers, and investors, even when your deposit isn’t the traditional 20%. We’ll assess your situation, compare lenders who offer low and no deposit products, and structure your application to maximise approval chances.

Whether you’re exploring rent-to-buy no deposit home loans, family guarantees, or government schemes, we’ll walk you through every option available to you.