No Deposit Home Loan Requirements in Australia: What Buyers Should Expect Before Applying

In Australia, “no deposit” almost never means “no requirements.” It usually means the lender is getting extra comfort another way, either through a guarantor, a specialist high-LVR structure, or a low deposit scheme that reduces your deposit requirement rather than removing it. Because there’s less equity buffer, lenders lean harder on serviceability, clean credit conduct, and a property they can value with confidence.

What “No Deposit” Really Means

A traditional home loan is priced and assessed on the assumption you contribute a deposit and the lender funds the rest. With a no deposit setup, you’re asking the lender to fund close to the full purchase price, and sometimes more once costs are involved. That pushes the risk up fast if the valuation comes in low, if rates rise, or if your living expenses are higher than your estimates.

You’ll commonly hear these terms:

Borrow the full value of the property (based on the lender’s valuation).

Borrow more than the lender’s valuation, usually pitched as covering some upfront costs too. In practice, this is niche and often structured in a way that looks like one solution to the buyer but is treated as higher risk by the lender.

Even with “no deposit,” you should expect some cash costs somewhere. Building and pest inspections, conveyancing, moving costs, and settlement adjustments don’t always fit neatly into the loan structure. If you’re relying on the loan to cover everything, that’s a red flag for many lenders because it suggests no buffer.

The Main Ways Australians Get a “No Deposit” Outcome

Guarantor structures

This is the most common “no deposit” outcome in mainstream banking. The lender takes security over the property you’re buying, plus a limited portion of a family member’s property (or other acceptable security). The borrower still has to qualify on income and expenses, and the guarantor has to qualify too. A key point for most families is the exit plan: the goal is usually to release the guarantee once the borrower’s loan drops below an 80% LVR threshold (subject to the lender’s process and valuation).

Specialist high-LVR products

Some lenders and non-bank lenders may offer high-LVR lending that’s marketed as “no deposit.” Expect tighter rules around postcode and property type, and stronger scrutiny on spending and stability. These products can also carry higher rates and fees because the lender is taking on more risk. The structure may involve more than one facility, even if it’s presented as a single “no deposit” option.

Low deposit schemes that solve the real problem for many buyers

If what you mean by “no deposit” is “I can’t get to 20%,” the Home Guarantee Scheme can be the most realistic pathway for eligible buyers, because it supports low deposits (often 5%) and can reduce or remove the need for LMI under the scheme’s design. You still need a deposit, but it’s far less than what many buyers assume is required.

The Core Requirements Lenders Will Assess

1) Serviceability and income stability

This is the first gate. With high-LVR lending, the lender has less tolerance for repayments that only “just” work. They’ll stress test your ability to repay if rates rise and if your living costs move up.

They’ll look closely at:

income consistency (role, industry stability, probation status, overtime history, commissions and bonuses)
household spending patterns shown in bank statements
existing commitments (credit cards, personal loans, car finance, HECS-HELP, childcare)

If your application relies on cutting living costs to unrealistic levels, it’s usually a decline at high LVR.

2) Credit conduct and liabilities

No deposit applications don’t leave much room for recent credit damage. Missed repayments, defaults, or heavy recent credit enquiries are harder to carry at high LVR. Credit cards matter even if you pay them off monthly because lenders assess your limit, not your balance, and high limits can crush borrowing power.

A single historical issue isn’t always fatal, but the higher the LVR, the less flexible lenders become.

3) Debt to income pressure and APRA’s change from 1 February 2026

From 1 February 2026, APRA’s debt to income (DTI) limits affect how much high DTI lending banks can write. The practical impact is simple: if your total debt is at or above 6 times your income, you’re more likely to hit lender appetite limits, even if you technically service the loan. It doesn’t mean “no,” but it can mean fewer options, tougher policy, and slower approvals at the margins, which matters more when you’re also trying to stretch to a no deposit structure.

Non-bank lenders aren’t always captured the same way as ADIs, but they still price risk and they still apply their own guardrails.

4) Property acceptance and valuation sensitivity

The property isn’t a formality in no deposit scenarios. It’s central to the risk decision. Lenders can be conservative on:

small apartments and high density stock
unusual construction or niche properties that are harder to resell
locations with postcode restrictions or thin sales data

Valuations can also come in below contract price. In a normal deposit loan, you may have room to cover a shortfall. In a no deposit scenario, a low valuation can turn an approval into an instant fail because your LVR jumps overnight.

Requirements That Change by Pathway

Below is a practical comparison so you can sanity check what “no deposit” actually means in your situation.

Pathway	What makes it work	What lenders usually require	Common reasons it fails
Guarantor structure	Extra security from a family member’s property reduces lender risk	Strong borrower serviceability, clean credit conduct, guarantor with usable equity, clear release plan	Guarantor doesn’t qualify or lacks equity, low valuation, tight borrower serviceability
Specialist high-LVR product	Lender accepts higher LVR with stricter policy and pricing	Full documentation, stable income, clean credit, stricter property and postcode rules, evidence of buffer	Postcode or property outside policy, high living expenses, recent enquiries or missed repayments, valuation shortfall
Home Guarantee Scheme (low deposit)	Government guarantee supports low deposit lending for eligible buyers	Deposit often 5%, owner occupier requirements, lender assessment and policy still applies	Eligibility not met, serviceability fails, property price or type outside program or lender rules

What Usually Knocks People Out Before Approval

Repayments only work if you slash living costs unrealistically
High revolving debt or large credit card limits that crush borrowing power
Recent missed repayments, defaults, or heavy credit enquiry activity
Property type or postcode falls outside lender policy
Valuation comes in under the contract price
No cash buffer left after settlement, even if the loan structure claims to cover “costs”

What to Prepare Before You Apply

If you want a realistic read on eligibility, assume full documentation and prepare it early. It speeds up assessment and reduces the chance you’ll get stuck in back and forth requests.

Government ID
Recent payslips and employment details (or tax returns and financials if self-employed)
Bank statements showing income and real spending
Details of every liability, including credit card limits
Evidence of savings or buffer, even if it’s not a “deposit”
Contract of sale once you have a property
If using a guarantor: proof of equity and loan statements on the guarantor property

A final practical point: don’t spam applications. Multiple credit enquiries can hurt outcomes, especially in high-LVR scenarios. If you’re not sure which pathway fits, get a clear policy match first, then apply once.

Conclusion

No deposit home loan requirements in Australia are strict because the lender has less buffer if anything goes wrong. If you’re considering a no deposit pathway, focus on what actually drives approval: strong serviceability, clean credit conduct, and a property the lender can value confidently. If a true no deposit option isn’t realistic, a low deposit scheme or a more mainstream structure can get you into the market with less risk and fewer moving parts.

FAQs

Can I get a no deposit home loan without a guarantor?

Yes, but it’s usually limited to specialist high-LVR products with tighter policy, or a structure that involves more than one facility behind the scenes. Expect stricter property rules, stronger serviceability expectations, and less tolerance for credit issues.

Is “no deposit” the same as a 105% LVR loan?

Not always. “No deposit” is a marketing label that can describe different structures. A 105% LVR loan implies borrowing more than the lender’s valuation, while many “no deposit” outcomes are actually achieved through extra security, not by borrowing above value.

Does a no deposit loan include stamp duty and legal fees?

Sometimes costs may be included depending on structure, but you should never assume. Many buyers still need cash for parts of the transaction, and lenders can treat “no buffer” as a risk issue even if the product claims to cover costs.

How does APRA’s DTI limit affect borrowers from 1 February 2026?

For banks and other ADIs, APRA’s DTI limit caps how much high DTI lending they can write each quarter. If your total debt is at or above 6 times your income, you can find approvals harder at the margins, particularly when combined with a no deposit or high-LVR request.

How does guarantor release usually work?

It’s typically linked to the borrower’s loan dropping below an 80% LVR threshold, supported by a valuation and the lender’s release process. The lender will confirm what evidence they need and whether any other conditions apply.

Sources

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