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Saving a deposit while paying rent is one of the great financial frustrations of our time. You watch property prices move, you crunch the numbers, and the finish line keeps shifting. A no deposit home loan is one option that could help you get into property sooner, without needing to save the traditional 20% deposit first. At Zella Money, we work with people every day who are ready to buy but feel like the deposit hurdle is the only thing standing between them and ownership. So let us walk you through what a no deposit loan actually is, how it works, and what to think about before you go down that path.
What does no deposit actually mean?
A no deposit home loan, sometimes called a 100% home loan or zero deposit loan, allows you to borrow the full purchase price of a property without contributing a cash deposit of your own. In practice, most lenders in Australia do not offer a true no deposit mortgage to the general public. Instead, there are structured options that can achieve a similar outcome, most commonly through a family guarantee arrangement.
A guarantor home loan is the most widely available path to no deposit borrowing in Australia. This is where a family member, typically a parent, uses the equity in their own property as additional security for your loan. Because the lender has that extra security, they may be willing to lend you up to 100% of the property value, and in some cases even cover costs like stamp duty. This is often called a family guarantee, family security, or family help arrangement, and it is the most common way no deposit first home buyers access the market.
The loan to value ratio (LVR) explained
Lenders use a figure called the loan to value ratio, or LVR, to measure how much you are borrowing relative to the value of the property. A standard home loan might require an LVR of 80%, meaning you borrow 80% and contribute 20% as a deposit. With a no deposit loan, your LVR is effectively 100%, or even higher if you are rolling in costs like stamp duty. A higher LVR means more risk for the lender, which is why most lenders require either a guarantor or some other form of additional security before they will approve a no deposit application.
Lenders Mortgage Insurance and no deposit loans
When borrowers take out a loan with an LVR above 80%, lenders typically charge Lenders Mortgage Insurance, or LMI. This is an insurance policy that protects the lender, not you, if you default on the loan. It can add thousands of dollars to the cost of your loan. One of the advantages of a guarantor-backed no deposit home loan is that it could allow you to avoid LMI altogether, because the guarantor's property reduces the lender's risk. This is one of the key no deposit benefits that makes the family guarantee structure appealing for eligible borrowers. You can also read more about LMI waivers if you think you might qualify through a professional category.
Interest rates on no deposit loans
It is worth being honest here. No deposit interest rates are not always the same as standard rates. Because the lender is taking on more risk, the variable interest rate or fixed interest rate offered on a no deposit mortgage may be slightly higher than what you would see on a loan with a full deposit. The difference varies between lenders, and some no deposit lenders are more competitive than others. At Zella Money, we access home loan options from banks and lenders across Australia, which means we can look at the full picture and help you understand what your no deposit repayments might look like across different products and structures.
No deposit vs low deposit
A no deposit home loan is not the only option if you are short on savings. A low deposit home loan typically requires a 5% deposit and may be available through the Home Guarantee Scheme, which is a government-backed program that allows eligible first home buyers to purchase with a smaller deposit without paying LMI. It is worth comparing no deposit vs low deposit options carefully, because the right choice depends on your personal circumstances, your income, your family situation, and the lenders available to you.
No deposit risks to consider
Borrowing 100% of a property's value means you start with no equity. If property values fall after you purchase, you could find yourself in a position where your loan amount is higher than your property value. This is sometimes called negative equity. Your no deposit repayments will also be higher than they would be if you had contributed a deposit, because you are borrowing more. And if a family member is acting as guarantor, their property is at risk if you cannot meet your repayments. These are real considerations, not reasons to walk away, but reasons to go in with your eyes open and a clear plan. The team at Zella Money will always make sure you understand the full picture before making any decisions.
Who could be eligible?
No deposit eligibility requirements vary between lenders. Generally, lenders will look at your income, employment stability, credit history, and the strength of the guarantor's position. Not every lender offers a no deposit application pathway, and those that do will assess each case individually. Zella Money can help you understand whether your situation aligns with current no deposit requirements and which lenders might be worth approaching. We work with first home buyers regularly and understand the specific pressures that come with trying to enter the market without a large cash deposit behind you.
If your parents are in a position to help and you have a stable income, a no deposit home loan could be a genuine path to immediate ownership. It is not the right fit for everyone, but for the right person in the right situation, it can make a real difference.
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
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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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