Home Loan Rate – Australia

In essence banks and lenders do require a deposit of around 20% before they approve loans of any kind.  This is to ensure that they are not exposed to too much risk, understanding that no deposit loans is very risky business.

However, it is a fact that there are ways to get a 100% deposit home loan.  This does not mean that they come at the same price.  Because of the additional exposure taken on by banks there are usually additional costs to these no deposit loans, but several people are willing to pay these additional costs in order to get into the real estate market earlier.

So what are the ways to get a no deposit mortgage?  There are a number of strategies that work.

One way is by paying LMI or what is commonly known as Lender’s Mortgage Insurance.  The payment of premiums for this type of insurance can eliminate the need for a 20% deposit.  It is a win-win situation as banks are protected from risk, while at the same time borrowers don’t need to save 20% deposit and can get into the real estate market as quickly as possible.

Another means of getting a no deposit home loan is by mortgaging another property.  The other property will serve as replacement for the deposit, and works in the same way as LMI in reducing the risk that the bank is exposed to.

Finally there is the guarantor.  The guarantor will pay where the borrower will be unable to pay.  With the help of a guarantor no deposit home loans are possible.

We at the home loan experts have access to all these types of no deposit mortgages.  We can help you select what we feel will work the best for you.  If you want to learn more about these types of loans, do not hesitate to contact us.  We will answer and provide you with quality information based on your enquiries.