How to Get a Home Loan Low Deposit: Your Guide to Buying with Less Than 20% Down

Finding a home loan low deposit option might sound like wishful thinking, especially with all the noise around rising prices and tighter lending rules. But here’s the good news—owning your first home in Brisbane or anywhere in Queensland is still within reach, even with a smaller deposit.

Low deposit home loans lets you buy a property with as little as 5–10% of the purchase price, making you fast-track your way into the market. They help you stay ahead of rising prices while keeping more of your hard-earned savings for moving costs, renovations, or even that new furniture wishlist.

That’s where the team at Kelly Brothers Finance makes a real difference. Their experienced mortgage brokers know the ins and outs of low deposit home loans, and they’ll walk you through the best options, unlocking access to government incentives and lender offers you might not find on your own.

Now, let's explore some of the top ways to get a home loan with a low deposit. 

1. Lenders Mortgage Insurance (LMI): The Most Common Option

One of the easiest ways to secure a low deposit home loan is by paying Lenders Mortgage Insurance (LMI). It’s basically the lender’s safety net if you can’t repay the loan, and it’s triggered when your Loan-to-Value Ratio (LVR) is over 80%. 

While it adds a one-off cost to your loan, LMI can help you buy sooner with as little as a 5-10% deposit, instead of waiting years to save up 20%. For many buyers, paying LMI is worth it to get into the market before prices climb.

Example: LMI for a $700,000 Brisbane home might cost around $17,500. But if property prices jump 5-7% in a year, you’re looking at a $35,000+ increase. Suddenly, paying LMI doesn’t sound so bad!

2. Guarantor Home Loans: Use Family Equity

A guarantor home loan is a popular way to access a home loan with low deposit if you’ve got family willing to lend a hand. Instead of saving the full amount yourself, a parent or close relative can use the equity in their property as extra security. This reduces the lender’s risk and may even let you avoid Lenders Mortgage Insurance (LMI).

With a guarantor, your deposit could be as low as 5%—sometimes even zero—though lenders usually want to see genuine savings too. Keep in mind that if you can’t meet repayments, your guarantor’s property is partly on the line, so it’s a serious commitment for everyone involved.

Pro Tip: Ask your lender if the guarantee can be limited to just the deposit portion to reduce the risk for your family. Always get independent legal advice before setting up a guarantor loan.

Are you a first home buyer? We’ll help you find the right low deposit loan and grants. Talk to our mortgage brokers at Kelly Brothers Finance at (07) 3847 9450 today.

3. Government Schemes: Big Help for First-Time Buyers

If saving a huge deposit feels impossible, government schemes could be your ticket into the Brisbane property market sooner. These programs are designed to support eligible buyers with low deposit options and reduce upfront costs.

First Home Guarantee (FHBG)

This scheme allows eligible first-home buyers to purchase a home with just 5% deposit and skip Lenders Mortgage Insurance (LMI). In Brisbane, the property price cap is $700,000, and income limits apply—$125,000 for singles, $200,000 for couples.

Regional First Home Buyer Guarantee

Similar to FHBG, but aimed at buyers purchasing in regional Queensland areas like Toowoomba or the Sunshine Coast. It also requires only a 5% deposit and waives LMI, helping first-timers enter regional markets.

Family Home Guarantee (FHG)

This scheme helps single parents or legal guardians buy a home with just 2% deposit, no LMI required. Income must be under $125,000, and Brisbane's property price cap also applies.

4. Use Equity in Another Property

If you’re already a property owner, you might be sitting on a goldmine of equity without even realising it. That built-up value equity can be a powerful tool to help fund a low deposit home loan for your next property or investment.

• Use your equity as the deposit for an investment property
• No need for a cash deposit if equity covers the shortfall
• Banks still assess your credit score, repayment history, and credit report

Pro Tip: Use a borrowing capacity calculator to know what you can afford.

Extra Tips on How to Secure a Low Deposit Home Loan

Getting a low deposit home loan is possible, but a few smart moves can boost your chances with lenders.

• Keep your credit score healthy – Pay bills on time and reduce credit card limits.
• Show genuine savings – Lenders like to see consistent saving over a few months.
• Avoid new credit applications – Multiple credit checks can hurt your credit score.
• Use a borrowing power calculator – Know what you can realistically afford before applying.
• Factor in additional costs – Stamp duty, legal fees, and inspections add up fast.
• Get pre-approval – It shows sellers you’re serious and ready to buy.
• Speak to a mortgage broker – Brokers can help compare lenders and find the best low deposit option for your situation.

Chat with Kelly Brothers Finance

Ready to stop stressing about your deposit and start house hunting? Our experienced mortgage brokers at Kelly Brothers Finance are here to guide you every step of the way and find the right low deposit home loan that fits your budget. 

Call us today at (07) 3847 9450 or visit https://www.kellybrothersfinance.com.au. We’ll do the hard work so you can focus on finding your new home!

Frequently Asked Questions (FAQs)

Can I get a home loan with less than 20% deposit?

Yes, many lenders offer options for a home loan with less than 20% deposit, but it often comes with additional loan costs like Lenders Mortgage Insurance (LMI). Your financial situation, credit history, and eligibility criteria play a big role in the approval process.

Can I buy a house with a 5% deposit in Australia?

Yes, you can buy certain property types with just a 5% loan deposit through Housing Australia’s First Home Guarantee or other lender options. It’s important to review your financial circumstances and check if you meet the eligibility criteria before submitting a loan application.

Can I buy a house with 10% deposit in Australia?

Absolutely—many standard home loan products allow a 10% deposit, but you might need to pay LMI as a one-off payment. Using repayment calculators helps you understand how the deposit affects your loan balance and monthly costs over your chosen loan term.

Which type of loan generally requires a minimum of 20% down?

Most rate home loans or investment loans targeting high-risk property types require a larger deposit of at least 20%. This is because lenders consider the property type and your credit history when assessing the risk of the loan application.

How does my financial situation affect my chances of approval?

Lenders look closely at your financial situation, including income, debts, and expenses, to decide if the loan balance is manageable. A stable income and clean credit history improve your chances during the approval process.

What should I prepare for my loan application?

You’ll need loan documents like payslips, bank statements, and tax returns to prove your financial circumstances. Lenders also check the purchase price, type of property, and your plan for the loan term.

How can a mortgage broker help me get on the property ladder?

A good broker can offer financial advice tailored to your situation and compare lenders to reduce loan costs. They’ll guide you through the paperwork and ensure your loan application is strong, helping you climb the property ladder faster.

Final Thoughts

Buying a home in Brisbane with a low deposit in 2025 is definitely possible; you just need the right plan and expert support. Whether it’s understanding your options, comparing lenders, or figuring out the best way to avoid unnecessary costs, our team at Kelly Brothers Finance is here to help make the process easier. 

Book your free consultation with our experienced mortgage brokers today. Call (07) 3847 9450 or visitkellybrothersfinance.com.au and let’s get you one step closer to owning your home.