Buying your first home in Australia can feel out of reach when saving for a deposit is the biggest hurdle. That’s where a no-deposit home loan comes in.
It’s a type of home loan that allows eligible buyers to borrow the full purchase price of a property, without needing to put down any savings upfront. This option is especially helpful for first home buyers, renters with a solid income but no savings, or those who have support from a family member willing to act as a guarantor.
It’s not free money or a shortcut, but it can be a useful path into the property market for people who meet the right conditions.
In this guide, we’ll break down the 7 essential steps to follow if you’re starting out and want to understand how a no-deposit home loan actually works.
Need help finding a lender that accepts no-deposit applications? Zest’s Queensland mortgage brokers know which participating lenders are offering the most flexible terms for no-deposit home loans. Reach out to us today by calling (07) 3461 6499 to get started.
Steps When Applying for a No Deposit Home Loan
Applying for a no-deposit home loan isn’t something you rush into. While the idea of buying without a deposit sounds simple, the process involves a few key stages to ensure you’re financially ready and meet the lender’s criteria.
Here are the 7 essential steps you’ll need to follow:
Step 1: Make Sure You’re Eligible
Before anything else, it’s important to know whether you qualify for a no-deposit home loan. Lenders and government schemes have clear eligibility rules that you’ll need to meet.
Some of the key eligibility criteria include:
- Be at least 18 years old and an Australian citizen or permanent resident
- Have a stable income from full-time or part-time employment
- Maintain a clean credit history and solid credit score
- Be a genuine first home buyer (for schemes like the First Home Guarantee)
- Not currently owning any property in Australia
You may also need to show that you’ve been renting for 12+ months (to use rental history instead of savings) or that you have a guarantor willing to help.
Step 2: Understand the Role of a Guarantor (If Required)
If you don’t qualify for government-backed schemes, having a guarantor can be the key to accessing a no-deposit home loan. A guarantor is usually a parent or close family member who offers equity in their home as additional security for your loan.
You’re still responsible for making all repayments. But if you default, the guarantor may be asked to cover what you owe, so it’s a big commitment for both parties. Not all lenders require guarantors, but many prefer it when there’s no cash deposit involved.
Step 3: Improve or Check Your Credit Score
Your credit score plays a huge role in whether you’re approved and what interest rates you’ll be offered. Even without a deposit, lenders want to see that you’re financially responsible.
Take these steps before applying:
- Request a free copy of your credit report from Equifax, Experian, or illion
- Dispute any incorrect information or late payments
- Pay down existing debts and avoid applying for new credit
A healthy credit history shows lenders you can handle the responsible repayment of a large debt.
Step 4: Gather All Required Documents
Being organised speeds up the loan application process. Whether you go through a bank or a mortgage broker, having the right paperwork ready can make all the difference.
You’ll typically need:
- 100 points of ID (passport, driver’s licence, Medicare card)
- 2–3 months of bank statements
- Your most recent payslips (or tax returns if self-employed)
- Proof of rental history (e.g., rental ledger or statements)
- Details of your assets, debts, and ongoing expenses
- Completed application form and signed Home Buyer Declaration
Depending on your situation, you may also be asked for evidence of a gifted deposit or a guarantor declaration.
Step 5: Speak with a Mortgage Broker
While you can apply directly with a bank, many first home buyers find it easier to work with an experienced mortgage broker, such as Zest Mortgage Solutions. Brokers understand lender policies, know which banks offer Guarantor loans or accept rental history instead of savings, and can help you apply for the right government scheme.
Brokers will:
- Compare loan options and comparison rates
- Check if you’re eligible for things like the First Home Owners Grant or stamp duty exemptions
- Help prepare and submit your paperwork accurately
Plus, many mortgage brokers don’t charge fees because the lender pays them once your loan settles.
Step 6: Apply for Pre-Approval
Once your documents are ready and your broker (or lender) is confident in your profile, the next step is pre-approval. This is a formal letter from a lender showing how much they’re willing to lend you based on your financial situation.
Pre-approval typically lasts 3–6 months and gives you the freedom to start house hunting confidently. It’s not a guarantee, but it’s a strong sign you’re on the right path.
Lenders will assess your:
- Income and employment status
- Credit history and liabilities
- Property price caps based on location (use the Property Price Cap Tool on Housing Australia’s website)
- Whether you're using a government incentive or guarantor
Step 7: Finalise Your Loan and Begin House Hunting
After pre-approval, you can begin looking for properties within your approved budget. Once you find the right property, the lender will complete a valuation to confirm that the property value aligns with your loan amount.
Next, you’ll receive formal approval, and then it’s onto signing contracts, paying any upfront costs (legal fees, inspections, home insurance, etc.), and completing the settlement. A conveyancer will help with the legal side of things, including title transfer and stamp duty paperwork.
Don’t forget to:
- Book building inspections before settlement
- Budget for moving costs, furniture, and unexpected expenses
- Contact your broker or lender with any final questions before settlement day
By following these steps, you’ll be prepared for each stage of applying for a no-deposit home loan, from checking eligibility to collecting keys on settlement day.
First-time buyer and feeling overwhelmed? You're not alone. Zest Mortgage Solutions simplifies the process of getting a no-deposit home loan by handling everything from eligibility, lender and loan selection, to approval. Call our friendly team of Queensland mortgage brokers today at (07) 3461 6499 to book a free consultation.
FAQ
Is it possible to buy a home without a deposit?
Yes, it’s possible through zero-deposit home loans, often offered via Guarantor home loans or backed by the Home Guarantee Scheme. These options allow first-home buyers with stable employment income and a solid credit rating to achieve home ownership without upfront savings.
Can I buy a house with $10,000 deposit in Australia?
Yes, some low deposit home loans allow purchases with as little as 5%, and with a First Home Owner Grant or shared equity arrangement, your borrowing capacity may increase. Just be aware that a loan-to-value ratio above 80% usually triggers Lenders Mortgage Insurance, unless you're eligible under an Australian Government-backed scheme.
Who can be a guarantor for a no-deposit home loan?
A guarantor, usually a close family member like a parent, uses equity in their property to support your loan—key for many guarantor home loans. They need solid finances and must be approved by the participating lender during mortgage approval.
How do no-deposit loans compare with traditional home loans?
Unlike traditional loans, no deposit home loans let you borrow 100% of the property’s value, often needing a guarantor or scheme support to avoid Lenders Mortgage Insurance. Traditional loans usually offer lower interest rates but demand bigger deposits and stricter loan-to-value ratio limits.
Who is a no-deposit home loan best for?
These loans suit first-home buyers with stable employment income, good credit rating, and either family support or eligibility for the Home Guarantee Scheme or First Home Owner Grant. They’re ideal for those without a large deposit but ready to enter the property market and explore different property types with a participating lender.
Is there any risk with a no-deposit home loan?
Yes, no-deposit home loans carry risks like higher debt levels and potential reliance on a guarantor. If property values drop or repayments are missed, it can impact your credit rating and place financial pressure on both you and your guarantor.
Final Thoughts
Buying a home without a deposit might seem out of reach, but with the right preparation, support, and understanding of the process, it’s absolutely possible.
If you’re ready to take the next step, reach out to our team of trusted Queensland mortgage brokers at Zest Mortgage Solutions. We can help you figure out your loan options, assess your borrowing capacity, and guide you through the next steps.
Call us today at (07) 3461 6499 to book your free consultation and expert guidance on how to apply for a no-deposit home loan to make your first home a reality.
