Unlock the secrets to buying with no deposit in Australia

Can You Actually Buy a Home Without a Deposit?

Buying a home without a traditional 20% deposit is possible in Australia through government-backed guarantees, family pledges, and lender equity contributions. These options allow eligible buyers to enter the market with as little as 2% to 5% of the property value saved, though specific conditions apply to each pathway.

For buyers in Jerrabomberra, the proximity to Canberra's employment hubs and the area's growing residential development make low-deposit purchases particularly relevant. The Australian Government 5% Deposit Scheme and Help to Buy are both available in New South Wales, with property price caps that accommodate the local market. Jerrabomberra sits within the NSW regional centre classification for these schemes, with a cap of $1,500,000 for capital cities and regional centres.

Australian Government 5% Deposit Scheme

The Australian Government 5% Deposit Scheme requires a deposit of just 5% of the property value for first home buyers, or 2% for eligible single parents. Housing Australia provides a guarantee to the participating lender of up to 15% for first home buyers and up to 18% for single parents, bringing the combined deposit and guarantee to 20% without the borrower paying Lenders Mortgage Insurance.

Applications are made through participating lenders, not directly to Housing Australia. No income caps apply under this scheme, and no annual place limits restrict access. The panel of participating lenders has expanded significantly, with 3 major banks and 28 non-major lenders included at the time of the most recent expansion. Fixed rate, variable rate, and split loan structures may be available depending on which lender you work with.

Both the purchase price and the lender's assessed value of the home must be at or below the applicable cap. In Jerrabomberra, which falls under the NSW regional centre classification, the cap is $1,500,000. Buyers purchasing in surrounding areas outside regional centres face a lower cap of $800,000, so confirming the applicable limit with your mortgage broker in Jerrabomberra before making an offer is necessary.

Help to Buy as an Equity Sharing Option

Help to Buy allows the Australian Government to contribute up to 40% of the purchase price for a new home and up to 30% for an existing home in exchange for a proportional equity stake. A minimum 2% deposit is required from the buyer. Income limits from 1 July 2026 are $103,000 for individual applicants and $165,000 for joint applicants or single parents, as shown on the ATO Notice of Assessment for the previous financial year.

Property price caps vary by location and are available via the postcode search tool at firsthomebuyers.gov.au. Up to 10,000 places are available in the 2026-27 financial year. Applications are made through participating lenders, and the scheme cannot be combined with the Australian Government 5% Deposit Scheme. State stamp duty concessions can generally be used alongside both schemes, though restrictions vary by jurisdiction and program.

Consider a buyer who earns $95,000 annually and has saved $10,000. Under Help to Buy, they could purchase an existing home at the area's median with a 2% deposit, with the government contributing up to 30% of the purchase price. The buyer would hold 70% equity initially, with the government holding the remaining 30%. When the property is eventually sold or refinanced, the government receives 30% of the sale proceeds or valuation at that time, proportional to its equity share.

Family Guarantee and Equity Security

A family guarantee allows a parent or close relative to use equity in their own property as additional security for your loan, reducing or eliminating the need for a cash deposit. The guarantor does not make repayments on the loan, but their property is used as collateral until the borrower's equity position improves, typically to 20%.

This option is available through most major lenders and some non-major lenders. The guarantor's property must have sufficient equity to cover the shortfall between the borrower's deposit and the 20% threshold. Legal advice is required for the guarantor, and lenders assess the borrower's serviceability independently as if no guarantee were in place.

In a scenario like this, a buyer purchasing in Jerrabomberra with no deposit saved could borrow the full purchase price if their parents use equity in a Canberra property as security. Once the buyer's property increases in value or the loan balance reduces enough to reach 20% equity, the guarantee can be removed and the parents' property released from the mortgage. Buyers using a family guarantee should discuss borrowing capacity implications with a broker, as the guarantor's existing debts may affect the amount you can borrow.

Lender Equity Schemes and Shared Ownership Programs

Some lenders and state governments offer shared equity schemes where the lender or government takes an equity stake in the property in exchange for reducing the deposit requirement. These differ from Help to Buy in that they are offered by individual lenders or state programs rather than a national scheme.

In New South Wales, no active state-run shared equity scheme currently operates for general buyers, though the Australian Government schemes outlined earlier are available. Other states such as South Australia and Western Australia have state-administered shared equity programs, but these are not accessible to buyers purchasing in Jerrabomberra.

Comparing Variable Rate and Fixed Rate Products for Low Deposit Loans

Low deposit loans are available as variable rate, fixed rate, or split rate products. The structure you choose affects both repayments and flexibility. Variable rate loans allow you to make extra repayments and redraw funds without penalty, which can help you reach 20% equity sooner and remove a family guarantee or refinance out of a government scheme.

Fixed rate loans provide certainty over repayments for the fixed period, typically one to five years, but often restrict extra repayments and may charge break costs if you refinance early. A split loan divides the borrowed amount between fixed and variable portions, allowing partial access to offset accounts and extra repayments while locking in part of the rate. Buyers using the Australian Government 5% Deposit Scheme or Help to Buy should confirm which loan structures are available through their chosen participating lender, as not all structures are offered by all lenders.

For buyers in Jerrabomberra who may be relocating for work or planning to upgrade as their household grows, a portable loan feature allows you to transfer the loan to a new property without refinancing. Not all lenders offer this feature, and specific conditions apply, so it should be confirmed at the application stage if portability is relevant to your circumstances.

Using the First Home Super Saver Scheme to Build a Deposit

The FHSS Scheme allows first home buyers to make voluntary concessional and non-concessional contributions into their superannuation fund and apply to release eligible amounts toward a deposit. Up to $15,000 of personal contributions from any one financial year can be released, with a total cap of $50,000. Concessional contributions are taxed at 15% rather than at marginal income tax rates.

Buyers generally need to obtain a determination from the ATO before signing a purchase contract. For a buyer saving over multiple years, the tax concession on contributions can result in a larger deposit than saving the same amount in a standard savings account. The FHSS Scheme can be used alongside the Australian Government 5% Deposit Scheme or Help to Buy, allowing buyers to meet the minimum deposit requirement more efficiently.

NSW Stamp Duty Relief for First Home Buyers

A full transfer duty exemption applies to new and established homes valued up to $800,000 in New South Wales, with a sliding concession on properties valued between $800,001 and $1,000,000. For vacant land, a full exemption applies up to $350,000 with a concession for land valued between $350,001 and $450,000. Buyers must move into the home within 12 months of settlement and reside in the property as their principal place of residence for at least 12 continuous months.

The NSW FHOG is $10,000 for new builds or substantially renovated homes only, with a purchase price cap of $600,000 or a combined land and build cap of $750,000. The grant does not apply to established homes. For buyers purchasing established properties in Jerrabomberra, the stamp duty exemption is the primary state-based benefit available, and it can be combined with federal schemes like the Australian Government 5% Deposit Scheme.

When Lenders Mortgage Insurance Still Applies

Lenders Mortgage Insurance is typically required when the LVR exceeds 80%, unless the loan is backed by a government guarantee or family pledge. LMI protects the lender if the borrower defaults and the property is sold for less than the outstanding loan amount. The premium is a cost borne by the borrower and is calculated on a sliding scale based on the loan amount and LVR.

Under the Australian Government 5% Deposit Scheme, LMI is not payable because Housing Australia provides the guarantee to the lender. Under a family guarantee, LMI may still be avoided if the combined security brings the effective LVR to 80% or below. Buyers using a standard low deposit loan without a government guarantee or family pledge will typically pay LMI, and this cost should be factored into the overall budget alongside settlement costs and any upfront fees.

Building Equity to Remove a Guarantee or Refinance

Once your equity reaches 20%, you can refinance to remove a family guarantee or exit a government scheme without penalty in most cases. Equity increases through principal repayments and property value growth. Using an offset account linked to a variable rate loan allows you to reduce interest charges without locking funds away, accelerating equity growth while maintaining access to your savings.

For buyers on a fixed rate loan, extra repayments are often capped, which can slow equity growth. If you plan to remove a guarantee within a few years, a variable rate or split rate structure may be more suitable. Your home loan structure should align with your goal of reaching 20% equity as efficiently as possible, particularly if a family member's property is used as security.

Serviceability and Debt-to-Income Limits

All lenders assess your capacity to service a loan at an interest rate that is at least 3.0 percentage points above the loan product rate. This serviceability buffer has remained at 3.0 percentage points and applies to new borrowers only. From 1 February 2026, a DTI lending limit applies, allowing each lender to lend up to 20% of new owner-occupier loans to borrowers with a total DTI ratio of six times or greater.

For a buyer earning $90,000 annually, a total debt level of $540,000 would represent a DTI of six times. Borrowing above this level may still be possible if the lender has capacity within its 20% allowance and the borrower meets all other serviceability criteria. Buyers with existing debts such as personal loans or car loans should consider paying these down before applying for a home loan pre-approval, as reducing total debt improves both serviceability and DTI outcomes.

Call one of our team or book an appointment at a time that works for you to discuss which low-deposit pathway suits your circumstances and how to structure your application for the most favourable outcome.

Frequently Asked Questions