Everything you need to know about 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.
Stay in the know
Our blog has heaps of tips, tricks and insights to help you on your first-home journey.
Why personal insurance is a must when taking out a mortgage
A mortgage can often be a huge financial commitment—and, if the unexpected happens, it can quickly become a huge financial burden. Personal insurance is a critical financial safety net, helping to protect your ability to afford your loan in the event of injury or illness, and giving you (and your loved ones) peace of mind.
How saving with Squirrel could get you into your first home faster
If you've been working hard to get to that 20% house deposit, you'll want to make sure your savings are working as hard as possible, to get you into your first home even faster.
First home buyers: Ways to get into your own home with just a 5% deposit
Lenders will usually require you to front up with a deposit of 20% of the purchase price for an existing property – 10% if it’s a new build – before they’ll consider giving you a mortgage on it. If you’ve been saving hard only to have your deposit goal feel like it’s getting further out of reach – or you just don’t want to have to wait years and years (and years) to get into your first home – there are options out there.
Don’t just take our word for it
Ashley Paice
New Zealand
Great experience and very happy with the service.
Jonny
New Zealand
Mayank has been great to deal with. Our mortgage is floating for the first few days and then we will fix next week since there's been an OCR cut. Mayank was really good at explaining things especially the option of setting up part of the mortgage with a revolving credit.
Anonymous
New Zealand
Excellent
Peter
New Zealand
Shiva was amazing, this process was so so simple, so much better than direct with the bank. Thanks