Buying a home without a deposit is possible, but it depends on your circumstances and which lenders you work with.
Most lenders require some form of security or guarantee to offset the risk of lending at 100% of the property value. The two main pathways are using a family guarantee or accessing specific low-deposit lender products that allow you to borrow the full purchase price plus costs. Both come with conditions that are worth understanding before you apply.
What a Family Guarantee Actually Involves
A family guarantee allows a parent or close relative to use equity in their own property as additional security for your loan. You borrow the full amount needed to buy the property, and your guarantor's property acts as a safety net for the lender.
Consider a buyer looking at a unit near Westfield Chermside. The purchase price sits at $450,000, and they need another $25,000 for stamp duty and settlement costs. Instead of needing a cash deposit, their parents offer a guarantee using $100,000 of equity in their own home. The buyer takes out a loan for $475,000, the guarantee covers the portion above 80% of the property value, and the buyer avoids paying Lenders Mortgage Insurance. Once the buyer builds enough equity through repayments or property value growth, the guarantee can be removed, usually within a few years.
The guarantor does not hand over cash, but they do take on liability if the borrower defaults. That makes the conversation with family members a serious one, and lenders will assess the guarantor's financial position just as closely as the borrower's.
Lender Products That Allow 100% Borrowing
Some lenders offer home loan products that let you borrow the full purchase price without a family guarantee, though these are less common and usually come with higher interest rates or stricter eligibility criteria.
These products are typically available to applicants with strong income, stable employment, and a solid credit history. Professionals in fields like medicine, law, or accounting may have access to specialist packages that waive the usual deposit requirement. Lenders offset their risk by charging a higher rate or requiring you to take out Lenders Mortgage Insurance, which protects them if you default.
Ready to get started?
Book a chat with a Finance Broker at Vast Finance and Mortgage Broking today.
If you are working in a profession with access to these products, it is worth comparing what is available. Not all lenders offer the same terms, and the difference in interest rates can add up to thousands of dollars over the life of the loan. A mortgage broker who works with multiple lenders can show you which products you qualify for and what the real cost looks like over time.
How Lenders Mortgage Insurance Fits In
When you borrow more than 80% of a property's value, most lenders require you to pay Lenders Mortgage Insurance. This is a one-off premium that protects the lender if you cannot repay the loan, and it is usually added to your loan amount rather than paid upfront.
For a $450,000 property in Chermside with no deposit, LMI could range from $15,000 to $25,000 depending on your loan amount and the lender's pricing. That premium gets rolled into your loan, which means you are paying interest on it for the life of the loan unless you refinance or make extra repayments to reduce the balance.
LMI does not provide you with any benefit. It exists purely to protect the lender. That is why some buyers prefer a family guarantee, which allows them to avoid LMI altogether by keeping the loan-to-value ratio below the threshold that triggers the insurance.
What Lenders Assess When You Apply with No Deposit
Lenders look closely at your income, employment history, credit file, and ongoing expenses when you apply for a no-deposit loan. They need confidence that you can service the loan even if interest rates rise or your circumstances change.
You will need to show genuine savings or explain where your funds have come from, even if you are not using them for a deposit. Lenders want to see that you can manage money responsibly over time. If your only funds are a recent gift or a one-off bonus, some lenders may view that as higher risk.
Your borrowing capacity also matters. If you are stretching to afford repayments at current rates, lenders may decline the application or reduce the amount they are willing to lend. They apply a buffer when assessing serviceability, usually calculating repayments at a rate several percentage points higher than the actual rate you will pay. If you cannot afford the loan under that buffer, the application will not proceed.
The Role of Equity and How It Builds Over Time
When you buy with no deposit, you start with no equity in the property. Equity is the portion of the property you own outright, calculated as the property value minus what you owe on the loan.
As you make repayments and as the property value increases, your equity grows. In a suburb like Chermside, where proximity to Westfield, the Prince Charles Hospital precinct, and transport links supports steady demand, property values tend to hold or appreciate over time. That growth helps you build equity faster than in areas with less infrastructure or buyer interest.
Once you reach 20% equity, you may be able to refinance to remove LMI from your loan, access a lower interest rate, or release your guarantor from their obligation. Building equity gives you options, whether that means upgrading, investing, or simply reducing your monthly repayments by switching to a more suitable home loan product.
Why Your Employment and Income Stability Matter More Without a Deposit
Lenders treat no-deposit applications as higher risk, which means they scrutinise your employment and income more carefully. Casual or contract work may not be accepted unless you have a long history with the same employer or in the same industry.
If you are self-employed, lenders typically want to see at least two years of tax returns showing consistent or growing income. A single strong year will not be enough. They will also look at your ABN registration date, your industry, and whether your income is likely to continue.
For buyers working in sectors with high job security, such as education, health, or government roles, lenders may be more willing to approve a no-deposit loan. If you work in an industry with variable income or high turnover, you may need to provide additional evidence of stability or consider waiting until you have saved a small deposit to strengthen your application.
How a Mortgage Broker Helps You Access the Right Lender
Not all lenders offer no-deposit loans, and those that do have different policies, rates, and eligibility criteria. A mortgage broker in Chermside can assess your situation and match you with lenders who are most likely to approve your application.
Brokers also know which lenders offer family guarantee products, which ones have specialist packages for certain professions, and which lenders are more flexible around income types or employment history. That knowledge saves you time and improves your chances of getting the loan structure that works for your circumstances.
If you are a first home buyer, a broker can also help you understand government grants or concessions you may be eligible for, though these do not replace a deposit. They reduce the upfront costs, which can make the difference between proceeding with a purchase or needing to wait.
Buying a home with no deposit is not the right path for everyone, but if your income is strong, your employment is stable, and you have family support or access to the right lender products, it can get you into the market sooner. Call one of our team or book an appointment at a time that works for you.
Frequently Asked Questions
Can I buy a home in Chermside without any deposit?
Yes, you can buy a home without a deposit by using a family guarantee or accessing lender products that allow 100% borrowing. Both options require strong income, stable employment, and careful lender assessment.
What is a family guarantee and how does it work?
A family guarantee uses equity in a relative's property as additional security for your loan. This allows you to borrow the full purchase price without needing a cash deposit, and often helps you avoid Lenders Mortgage Insurance.
Do I have to pay Lenders Mortgage Insurance if I have no deposit?
Usually yes, unless you use a family guarantee to keep your loan-to-value ratio below 80%. LMI is a one-off premium that protects the lender and is typically added to your loan amount.
What do lenders look at when I apply with no deposit?
Lenders assess your income, employment stability, credit history, and ability to service the loan under higher interest rate scenarios. They also check for genuine savings or a clear explanation of your financial position.
How does buying with no deposit affect my borrowing capacity?
Buying with no deposit increases your loan amount, which means higher repayments and less room in your borrowing capacity. Lenders also apply a serviceability buffer, so you need to prove you can afford repayments even if rates rise.
