For many first-time buyers, saving for a home deposit can feel like an uphill battle. However, if you’re looking to buy a home in Bathurst or Lithgow, you don’t always need a 20% deposit to secure a loan. There are several low deposit home loan options available, making homeownership more achievable sooner rather than later.
As a trusted mortgage broker in Bathurst and mortgage broker in Bathurst and Lithgow, we’re here to break down your options and help you find the best pathway to buying your home with a low deposit.
How Much Deposit Do You Need for a Home Loan?
Traditionally, lenders require a 20% deposit to approve a home loan. However, with the rising cost of living and property prices, many buyers struggle to save this amount. The good news is that some lenders allow you to buy with as little as 5% deposit, and various government-backed schemes can help you get there faster.
Low Deposit Home Loan Options
1. First Home Guarantee (5% Deposit) – No Lenders' Mortgage Insurance (LMI)
This scheme allows eligible first home buyers to purchase a home with as little as a 5% deposit. The government acts as a guarantor, so you don’t need to pay Lenders' Mortgage Insurance (LMI), which can save you thousands.
To qualify, you must meet income and property price caps.
Best for: First-time buyers looking to avoid LMI costs.
2. Regional First Home Buyer Guarantee (5% Deposit)
A government initiative supporting buyers in regional areas like Bathurst and Lithgow. Allows first-time buyers to secure a home with a 5% deposit, while avoiding LMI. The property must be in an eligible regional location, and income limits apply.
Best for: First home buyers purchasing in regional NSW.
3. Family Home Guarantee (2% Deposit)
Designed for single parents with at least one dependent child.
Allows eligible borrowers to buy a home with just a 2% deposit.
No LMI is required, reducing upfront costs significantly.
Best for: Single parents looking to secure homeownership with minimal savings.
What Are the Risks of Low Deposit Home Loans?
While low deposit loans help you get into the market sooner, there are a few things to consider:
Higher repayments – Borrowing more means larger repayments.
LMI costs – Unless using a scheme, LMI can add thousands to your loan.
Stricter lending criteria – Lenders may require a strong credit score and stable income.
How to Improve Your Chances of Approval
Save as much deposit as possible – Even 5% gives you more loan options.
Check your credit score – A strong score helps with approval.
Reduce other debts – Lower existing loans or credit card balances.
Get pre-approved – Know your borrowing power before house hunting.
A mortgage broker in Bathurst or mortgage broker in Lithgow can assess your financial situation and help you find the best low deposit loan options.
Comments