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A lot of people assume that if they haven't saved a full 20% deposit, the door to home ownership is firmly shut. That assumption costs people years. At Zella Money, we work with Australians every day who are ready to buy, have solid income, and are tired of watching property prices move while their savings account tries to keep up. A low deposit home loan could be the option that changes the timeline entirely.
What is a low deposit loan?
A low deposit loan is a home loan where you borrow with a deposit of less than 20% of the property's value. The most common versions are a 5% deposit home loan or a 10% deposit home loan. These loans are available for owner-occupied purchases, investment properties, and in some cases, refinancing. The loan to value ratio (LVR) on these products is higher than a standard loan, which means lenders take on more risk. That risk is usually managed in one of two ways: through Lenders Mortgage Insurance (LMI), or through a government scheme or family guarantee structure.
LMI is a one-off insurance premium that protects the lender (not you) if you default on the loan. It can be paid upfront or added to your loan amount, which does increase your overall debt and your low deposit repayments. It is worth understanding clearly before you commit, and the team at Zella Money will always walk you through the numbers so nothing comes as a surprise.
Government schemes and family guarantee options
There are a few pathways that could help you avoid LMI costs altogether. The Home Guarantee Scheme is a government low deposit scheme that allows eligible first home buyers to purchase with only a 5% deposit, with the government acting as guarantor for part of the loan. This is one of the more well-known options under the First Home Guarantee, and places are limited each financial year, so timing matters.
Another option is a guarantor loan, where a family member uses equity in their own property to support your low deposit borrowing. This low deposit family guarantee structure can help you avoid LMI entirely and potentially access a stronger loan position from the outset. It is not the right fit for every family dynamic, but for those where it works, it can be genuinely powerful.
For investors, low deposit investment loans are also available, though the eligibility criteria and interest rate conditions tend to differ from owner-occupied products. If you are looking at investment loans with a minimal deposit, the structure of your borrowing matters a lot, and getting it right from the start saves headaches later.
The real trade-offs of a low deposit loan
A low deposit mortgage does come with trade-offs that are worth being honest about. Your loan amount will be higher relative to the property value, which means higher repayments over time. You may also face a slightly higher low deposit interest rate compared to someone borrowing at a lower LVR, because lenders price for risk. Some lenders offer interest rate discounts as your LVR improves over time, and whether you choose a variable interest rate or a fixed interest rate will also affect what you pay month to month.
There are also upfront costs to factor in. Stamp duty is a significant one, and depending on your state and whether you qualify for any concessions as a first home buyer, it can add meaningfully to what you need at settlement. Low deposit genuine savings requirements are another consideration. Most lenders want to see that your deposit has been accumulated over time, not gifted in a lump sum the week before you apply. Zella Money helps clients understand exactly what lenders are looking for so your low deposit application is as strong as it can be.
Why a low deposit loan matters
The property market does not wait. Every year spent saving toward a larger deposit is a year of potential capital growth you are not participating in. For many Australians, the ability to get in the market sooner, stop renting, and start building equity outweighs the cost of LMI or a marginally higher rate. That calculation is personal, and it depends on your income, your goals, and the property you are buying. What Zella Money does is help you run those numbers clearly, without pressure, so you can make a decision that actually makes sense for your life.
We access home loan options from banks and lenders across Australia, which means we are not limited to one lender's products or one set of eligibility criteria. Low deposit approval looks different at different lenders, and knowing where to take your application is half the work. Whether you are exploring a 5% deposit, weighing up LMI costs, or trying to understand how a family guarantee could work for your situation, Zella Money is the kind of support that makes the whole thing feel a lot less overwhelming.
Getting a home loan can feel overwhelming. It doesn't have to be. At Zella Money, we've built a process that keeps you informed, supported, and confident at every step. Here's how we work together.
Let's Have a Chat: Everything starts with a conversation. We take the time to understand where you are right now, where you want to go, and what matters most to you. No pressure, no jargon. Just an honest discussion about your situation and your goals.
We Dig Into the Detail: Once we know what you're working towards, we take a closer look at your finances. Income, expenses, savings, existing debts. We look at the full picture so we can give you advice that's actually relevant to your life, not just a generic answer.
We Research the Market: With a clear picture of your situation, we search across a wide panel of lenders to find options that genuinely suit you. We're not tied to one bank or one product. Our job is to find the right fit, not the easiest one.
We Walk You Through Your Options: We present a shortlist of suitable loan options and explain each one in plain language. Rates, fees, features, flexibility. We cover it all so you can make a decision you feel good about. No hard sell, ever.
We Handle the Application: Once you've chosen the loan that works for you, we take care of the paperwork. We prepare and lodge your application, liaise with the lender, and keep things moving. You don't need to chase anyone.
We Keep You in the Loop: From application through to approval, we stay in regular contact. You'll always know where things stand. If the lender needs anything extra, we handle it quickly and let you know what's happening and why.
Settlement and Beyond: Approved and settled? We're still here. We check in after settlement to make sure everything's running smoothly, and we stay available as your circumstances change. One loan is just the beginning.
Ready to talk to the team? We're excited to meet you! Shoot though an enquiry and we'll get back to you ASAP!
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We used Jaclyn the Senior Finance Broker to buy our first home and she was amazing! She is so knowledgeable, made us feel valued and turned our dream into a reality. Can not recommend her enough! Shout out to Sal as well the Settlements Manager who helped make settlement nice and simple.
Chris Fallon
I cannot recommend Zella highly enough! Charlotte and the wider Zella team were with us every step of the way! They truly had our backs in securing the best home loan for our family. Prompt, informative and easy to deal with! Thank you so much for all your hard work!! xx
Olivia Jolliffe
I had a great experience with Zella from start to finish. The team was friendly and made our refinance super easy. Highly recommend!
Casey Sharrock
Huge thanks to Tara and her team! Highly recommend !
Maddie B
Bought my first home through Zella and so so glad I did! Georgia was extremely helpful from the start and patient with answering all of my stupid questions. Thank you again for everything!
Christine Untario
I really appreciated working with the team. They were really efficient, no question went unanswered and they were lovely to work with. I felt in good hands!
Jane Eldershaw
Tell us a little about where you're at, and we'll take it from there.
Let's chat
For most standard lending appointments, no. We're paid by the lender once your loan settles. In rare cases where applications are highly complex, a fee may apply, but we'll always discuss and disclose this with you upfront.
Yes. We use bank-grade security systems and are fully compliant with Australian privacy regulations. Your information is treated with the highest level of care and confidentiality.
Absolutely. We assist clients across Australia and have a thorough understanding of different state and territory regulations, grants and incentives.
We keep communication clear and simple. Your broker will be available via email and phone, and we manage documentation securely through our electronic portal. Your initial meeting can be held over the phone or by video call, depending on your preference. We're always just a message away if you need support.
To get started, we'll need documents such as identification, proof of income (like payslips or tax returns), details of your assets and liabilities, and statements for any existing loans or credit facilities. Your broker will give you a personalised checklist so you always know what's needed.
Your borrowing capacity depends on factors like your income, expenses, existing debts, credit history and the policies of individual lenders. We'll work with you to assess your position and give you a clear understanding of what's achievable.
Yes. Our brokers stay across all available incentives, including first home buyer grants, stamp duty concessions and guarantee schemes. If you're eligible, we'll help you understand how to apply and make the most of these opportunities.
Absolutely. We specialise in guiding first-home buyers through the process with tailored advice, clear communication and plenty of support along the way.
Banks offer their own products. We offer you options. As your broker, we take the time to understand your goals and financial circumstances before searching across a broad panel of lenders to find solutions that genuinely suit you. We also stay across the latest policies, grants and niche lender options that could make a real difference to your outcome.
We conduct a credit check early in the process to help us best assist you. Your score is safe with us. If you have any concerns about your credit history, please speak with your broker — we're here to support you.
Pre-approvals generally last between three and six months, depending on the lender. We'll guide you through the timeline and help you refresh your approval if your property search takes a little longer than expected.
Once your loan is formally approved, we'll guide you through the settlement process. We work closely with your solicitor or conveyancer to ensure all requirements are met and everything runs smoothly right through to settlement day.
Definitely. We understand the nuances of self-employed income and have extensive experience presenting applications for business owners in a way that resonates with lenders.
No. In addition to home loans, we also assist with commercial lending, investment loans, refinancing and asset finance. Whatever your finance goals, we're ready to support you.
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