Can I get a home loan with a 10% deposit in Australia?

Though a smaller deposit might suit your financial situation, it may have consequences in how things look over the life of the loan.
Ava Crawford
Written by
Ava Crawford
Imogen Baxter
Reviewed by
Imogen Baxter
Last updated
May 17, 2024
0 minute read
Table of contents
a row of houses that could be purchased with a 10% deposit

Though the standard recommendation for a deposit on a home loan in Australia is 20% of the property value, you will find many lenders offering options if you have a 10% deposit.

Though a smaller deposit might suit your financial situation, it may have consequences in how things look over the life of the loan.

A home loan with a deposit below 20% will mean that you may need to pay lenders mortgage insurance or LMI. This fee lowers the risk of a low-deposit loan to a provider in the event you are unable to make your repayments.

A lower deposit can also lead to stricter lending criteria, so make sure to get your credit score and supporting documentation in top shape before applying.

What are my options for a low-deposit home loan?

If you are looking for a home loan with a smaller deposit, there are options out there for you. If you’ve been a diligent saver and put aside 10% of the property value for your house deposit, pathways for home loans include:

  • Guarantor Loans — A loved one or family member can act as a guarantor on your property purchase, which makes your loan less risky to a lender. In this case, providers will look to make sure your guarantor has enough equity in their property and check their creditworthiness as well as yours.
  • Gifted Deposit — This is where a family member or loved one contributes to your deposit. This is helpful to those with a smaller deposit, as making up the remainder of the recommended 20% deposit can prevent you from needing to pay lenders mortgage insurance.

    If you are gifted money for a deposit, be prepared to show evidence of genuine savings and stable income to show that you will be able to make your repayments. You will also need to demonstrate that the money was received as a gift — this is to prevent people from using borrowed money from credit cards or personal loans to put down house deposits.
  • 90% LVR Home Loan - A 10% deposit will leave you with a 90% loan-to-value ratio. Many loan specialists will offer home loans for this LVR, though they may have stricter eligibility criteria and less competitive interest rates.

Remember that if you do start your home loan with a high LVR, you may be able to refinance later. This could let you move to a home loan with a better interest rate and more desirable conditions once you have some equity in your property.

An OwnHome Deposit Boost Loan

OwnHome allows customers to get a foot on the property ladder without hundreds of thousands of dollars upfront.

Backed by some of Australia’s most trusted financial institutions, OwnHome is working alongside the big players to help you get ahead in the game.

What is it?

With an OwnHome Deposit Boost Loan, all you need is up to 2.2% upfront, and we’ll cover the rest of your 20% deposit - so you don’t pay Lenders Mortgage Insurance (LMI)! Then, OwnHome's team of experienced Buyer's Agents will guide you through the entire house-hunting journey - making sure you get the right property at the right price.

Bridge your deposit gap - For just 2.2% upfront, we’ll cover the deposit you need to unlock your very own 80% LVR mortgage. Depending on your deposit contribution, this Low Deposit Premium can be even lower. If you contribute 10% deposit, you're looking at just 1.1% for your Low Deposit Premium.
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Low monthly repayments - You repay your OwnHome Deposit Boost Loan over time, just like you would with your mortgage. Think of it as paying for your deposit while you live in your home. Plus, there are no penalties for paying off your loan early.

Can you afford mortgage repayments but not the deposit? Learn more about a deposit boost loan.
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Who is eligible for OwnHome?

OwnHome exists to help aspiring homeowners who need a boost to their deposit. Key requirements for a Deposit Boost Loan are:
- Credit in good standing
- Proof of employment
- Permanent residency or citizenship for at least one applicant
- Looking to buy an owner-occupier property
- Savings to cover 2.2% Low Deposit Premium

Interested in buying a home without the hundreds of thousands of dollars upfront usually required? Use our upfront costs calculator to see how OwnHome stacks up against traditional low-deposit mortgage options.

Can I get help as a first-home buyer with a 10% deposit?

Feeling overwhelmed at the prospect of saving up your deposit? Thankfully, first-home buyers can find some assistance with their quest for home ownership - even with a smaller deposit.

Government schemes

The government offers assistance to first home buyers. Major Australian government schemes to consider include the First Home Owners Grant (FHOG) and the First Home Guarantee (FHG), which may also be referred to as the First Home Loan Deposit Scheme (FHLDS).

  • First Home Owners Grant — The FHOG is an Australian grant aiming to help get first-time buyers into homes. It ranges between $10,000 and $30,000 and can be used in most states for purchase or building or a new home, but can only be used by owner-occupiers. If you receive the FHOG, you may be exempt from stamp duty.

    Each state has different grant amounts and restrictions. NSW, for example, offers a $10,000 grant for the purchase or construction of new homes (property value must not exceed $600,000). If buying land to build a property, the combined land and property value must be below $750,000.

    Eligibility criteria across all states include that you (and your partner, if applicable) have never owned property and that you are intending on living in this property for the next 12 months (or 12 months following construction). View your state’s site for more information.
  • First Home Guarantee or First Home Loan Deposit Scheme — These refer to a different government scheme that guarantees an allotted number of properties to first-time buyers with low deposit home loans (as low as 5%).

    If you qualify for one of these homes, the government will guarantee the remainder of the 20% minimum deposit. This means you do not have to pay LMI.
  • There are other home guarantees schemes, like the Family Home Guarantee (for single parents) and the Regional Home Guarantee. If you are a single parent or looking for property outside of a major metropolitan area (like Sydney or Melbourne), these may be useful.


What is my LVR with a 10% deposit?

Your LVR, or loan-to-value ratio, is the loan amount you are taking out as compared to the deposit amount you have paid. Home loans are often grouped into LVR categories. If you have paid a 10% deposit on the purchase price of a home, your LVR is 90%.

Do I have to pay LMI with a 10% deposit?

When you pay a smaller deposit, you will have to pay LMI - lenders mortgage insurance - for the protection of your lender. Deposits over 20% may not require LMI, as these tend to be lower risk for lenders.

Certain low-deposit home loans may not require you to pay lenders mortgage insurance. These include when they are part of a federal government guarantee scheme, like the first home guarantee.

Are Australian interest rates higher with a 10% deposit?

While Aussie interest rates are dependent on many factors, a smaller deposit than 20% may mean higher interest rates.

Remember that interest rates are calculated based off many more things. These will include your loan amount, the home loan you are applying for, your record of genuine savings, and your credit history. If your credit score is in the best possible condition, with any personal loans and credit cards showing timely and regular repayments, you will be more likely to secure a competitive interest rate.

Remember that a 90% LVR home loan like this may also have stricter eligibility criteria than a loan with a larger deposit.

How much would my mortgage repayments be with a 10% deposit?

Your home loan repayments will be dependent on your loan amount and the property value, as well as on the interest rate you lock in and the loan term.

There are some fairly simple things to keep in mind - a shorter loan term will generally mean less interest, as there is less time for the interest to accumulate.

When working out your home loan repayments, make sure to look at the comparison rate (and not just an attractive headline interest rate). This will help to indicate how your interest rate will look after factoring in any home loan application fees and service fees.

You’ll also have to consider the difference between a variable and fixed-rate loan, and the impact that a changing interest rate can potentially make on monthly repayments.

You can use a mortgage repayment calculator to work out what your repayments will be.

Before choosing any home loan, make sure to read the product disclosure statement thoroughly as you would with any financial product. Consult with a mortgage broker if you need further representation, as they will be familiar with your needs and can evaluate those against the target market determinations of any given product.

Are there any other upfront costs to remember with a new home?

Buying a home is not just a matter of the house deposit.

When buying a property, no matter the type of property, there are other costs to factor in.

Notably, these include the cost of stamp duty. This is a tax levied by the government on the purchase of property, but the amount will vary based on the property value and location. You may be exempt from stamp duty if you are a first-home buyer who is eligible for the First Home Owners Grant (FHOG).

There may also be other upfront fees to consider, including transfer fees and legal fees, which fall under the umbrella of conveyancing.

Some home loans may also have other fees to consider, and these should be something you factor in when deciding on your loan. Application fees and service fees are fairly standard, but other fees may be unexpected. These include fees for making extra repayments, or fees for accessing a redraw.

Use our deposit calculator to calculate your potential upfront costs.

This article is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation, or needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS), or other offer documents before making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold).
Prepared by OwnHome Services Pty Ltd ACN 664 492 059. This information does not take your personal objectives, circumstances or needs into account. Always read the disclosure documents for products and services before deciding on a product or service, and consider seeking independent legal, financial, taxation or other advice for your unique circumstances.

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