The ultimate guide to getting a mortgage with a low deposit
Struggling to hit that magic 20% deposit? You’re not alone. The good news is you don’t need 20% to get a mortgage (and saving that much could cost you years). With the right strategy, you could be in your first home way sooner that you think.
Our free guide breaks it all down. Low-deposit mortgages, clever workarounds and insider tips to get your foot in the door faster.
What's up with the 20% deposit rule?
The 20% deposit rule isn’t just a random number that banks pluck from thin air, it’s tied to Loan-to-Value Ratios (LVRs), which limit how much banks can lend based on a property’s value.
But here’s the thing, you don’t always need 20%. There are loopholes, special deals and clever strategies that could get you in the door much sooner with a smaller deposit. While a bigger deposit gives you more financial wriggle room (helpful for things like interest rate hikes) there are plenty of exceptions to the rule.
Not sure where to start?
Get the inside scoop on how to get a mortgage with a low deposit. No trickery, just great insights.
Haven’t got 20%? Don’t let that stop you
There are plenty of ways to get into a home with a smaller deposit.
Bank of Mum and Dad (a.k.a Guarantors)
If a family member is willing to guarantee your deposit shortfall, banks may treat your loan as if your deposit is at least 20%. That means better rates, no low-equity fees and even cash back, saving you thousands! (just be extra nice to Mum and Dad).
New builds are a great option
Banks are way more flexible with new builds, allowing up to 90% LVR. That means you could get a mortgage with just a 10% deposit.
Banks have some flexibility
Regulations allow banks to approve up to 20% of their loans for people with less than 20% deposit (high-LVR borrowers). But they’re picky. Those with an accepted conditional offer get priority.
The ‘in-crowd’ effect
If you’re an existing customer, banks may fast-track your low-deposit mortgage. They like to keep things in the family, so if you’ve been with them for a while, it could work in your favour.
Squirrel Launchpad – Buy with as little as 5% deposit
For first-home buyers with good incomes but not quite enough savings, Launchpad lets you buy with as little as 5% deposit. We top you up to 20% with a Squirrel loan and the rest comes from a non-bank lender.
- Must be a first-home buyer
- Must be on PAYE or a fixed contract (at least 1 year)
- Must be buying in a metro area and planning to live there
Interest rates are slightly higher than bank rates, but the upside? You’re in your first home much sooner. Your mortgage adviser will help you structure the loan so you can refinance to a main bank later.
Get ahead with a conditional offer
If you’re buying with less than 20% deposit, having a conditional offer can boost your chances of getting approved. But there are a few hoops to jump through:
- Work with a mortgage adviser to ensure your offer fits lender criteria
- Get a lawyer to draft the written offer
- Include a finance and valuation clause (allow 7-10 days to secure funding)
If your offer is accepted, your mortgage adviser will help navigate the next steps to get the bank on board.
The perks of a 20% deposit (if you can make it happen)
A bigger deposit means a smaller loan, which is great, but that's not the only benefit.
Everything you need to know about getting a mortgage with a low deposit
Grab a copy of our handy guide - the sooner you start your research, the sooner you could be on your way to buying your first home.
Prefer to talk it through?
Even at the best of times, navigating the mortgage process can be tricky. But don't worry, we've got you. Chat with an expert adviser today.
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Madhu P
New Zealand
We've worked with Ange and the team at Squirrel more than once now, and every time they've been absolutely fantastic. This time was no different, they looked after us from start to finish with the same professionalism, attention to detail, and just the right amount of hustle behind the scenes to make everything run smoothly. What I appreciate most is how they take the stress out of the process. I just tell them what we're trying to do, and they take care of the rest: crunching the numbers, dealing with the bank, and coming back with a clear plan. It means we can focus on the bigger picture without getting bogged down in the details. Even with a few curveballs from the bank this time, Ange and her team kept everything on track and moving forward. We managed to get both the sale and the purchase done without any delays or issues, which is exactly what you want in these situations. When we think about getting a loan, we think about Ange and the team, and no one else. I genuinely don't want to deal with any other company. They've earned that level of trust.
Suzanne
New Zealand
Sudam was great to deal with. I had already met with another broker and hadn't been happy with the interaction. Sudam's approach was completely different - he was really nice to talk to, very clear about the options and process, and made the whole thing easy for us. Sudam communicated well throughout and we're very happy with the outcome of switching our mortgage.
Guy
New Zealand
Very easy to deal with.
James
New Zealand
Fantastic to deal with, makes everything very effortless and provides great advice