7 Best Low Deposit Home Loan Options in Australia for 2025

Saving a 20% home loan deposit in today’s property market can feel impossible, especially in Queensland, where prices keep rising. The median house price in Brisbane topped $800,000 in 2024, which means a traditional deposit is more than $160,000.

For many home buyers, this is out of reach without years of saving. That is where the best low deposit home loans can help. Some require as little as 2%–5% deposit, and others need no deposit at all if you qualify for an Australian Government scheme.

In this guide, LM Edge’s mortgage brokers share seven of the best low deposit home loans in Australia for 2025. We will explain how they work, who is eligible, and the pros and cons, so you can choose the one that fits your situation.

Ready to buy with a smaller deposit? Our Gold Coast mortgage brokers find the best low deposit home loans to suit your budget. Call 07 4721 4772 or visit lmedge.com.au.

Option #1: Guarantor Home Loans

A guarantor home loan lets you buy a property with little or no deposit by using a family member’s property as security. This can help you avoid Lenders Mortgage Insurance and get on the property ladder sooner.

The guarantor, often a parent or close relative, uses the equity in their own home to secure part of your property purchase. Lenders will check the guarantor’s credit approval history, income, and secured credit capacity before approving the arrangement.

Benefits: You can avoid paying a large LMI premium and reduce your upfront costs. It may also allow you to borrow up to 100% of the property value.

Risks: If you default, the guarantor’s home could be at risk. The guarantor will also need to sign a Target Market Determination form and understand the lender’s loan-to-value ratios.

Option #2: Lenders Mortgage Insurance (LMI)-Free Loans

Some waive the Lenders Mortgage Insurance for certain borrowers, removing a cost that can be tens of thousands of dollars. These LMI-free loans are often available to professionals such as doctors, lawyers, and engineers.

Banks calculate the comparison rate and apply conditions like a clean loan application history. Some may charge a low deposit premium or application fee in place of LMI. Always check the participating lender’s terms under their Australian Credit License.

In 2025, major lenders like Commonwealth Bank, Westpac, ANZ, and NAB offer LMI waivers for eligible professions. These savings can help with other upfront costs like stamp duty or conveyancing fees.

Option #3: First Home Guarantee Scheme (FHBG) in Queensland

The First Home Guarantee, part of the Home Guarantee Scheme, allows eligible buyers to purchase a home with as little as 5% deposit without paying LMI. It was formerly known as the First Home Loan Deposit Scheme and is administered by Housing Australia.

Queensland price limits are set by Property Price Caps, which you can check using the Property Price Cap Tool on the government’s website. This scheme works through a participating lender and covers both new and established property types.

You may also combine the FHBG with the first home owner grant from the Office of State Revenue to further reduce your upfront costs.

Option #4: Family Home Guarantee for Single Parents

The Family Home Guarantee supports single parents, even if they have previously owned property, provided they meet the Department of Finance and Centrelink benefits eligibility rules.

This scheme requires as little as 2% deposit, with the government guaranteeing up to 18% of the property’s value, avoiding LMI. You can use it for various property types, including townhouses, apartments, and houses.

Some lenders apply Loan-to-Value Ratio (LVR) restrictions, so you should confirm these with home loan specialists or Home Lending Managers before applying. You may also be eligible for the first home owners grant if purchasing a new build.

From guarantor loans to government schemes, LM Edge’s Gold Coast mortgage brokers help you find the best low deposit home loans for 2025. Call 07 4721 4772 or visit lmedge.com.au.

Option #5: Best Low Deposit Home Loans from Major Banks

Major banks and mutuals offer low deposit loans with various structures. Options include modular home loan products, principal and interest home loans, fixed interest rates, variable interest rates, split interest rates, and interest-only loans.

Some lenders offer ultra-low rate campaigns or packages. Regional banks such as Queensland Country Bank and Australian Military Bank also have low deposit options, though some may require LMI.

Use a home loan calculator to work out repayments, factoring in application fees, redraw fees, and possible redraw offset split loan features. Compare lenders and data for market insight.

Option #6: Shared Equity Home Schemes in Queensland

The Queensland Housing Finance Loan lets you co-own a property with the government, reducing your deposit size and repayments. This helps buyers who might not qualify for a full mortgage due to income or savings.

With shared equity, you can step onto the property ladder sooner, though you will share capital gains. These loans often come with flexible repayment options, including split interest rates and features like redraw, offset, and split loan access.

Your application process will include an assessment of your income, expenses, and property choice.

Option #7: Regional First Home Buyer Grants and Loans

The Regional First Home Buyer Guarantee helps those buying in regional Queensland. It works alongside the home owner grant and stamp duty concessions to lower upfront costs.

Buyers should budget for ongoing expenses like building insurance, water or shire rates, and conveyancing fees.

FAQs About Best Low Deposit Home Loans

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

Yes, with schemes like the First Home Guarantee or bank low deposit loans, a 5% deposit is often enough. LMI may apply unless the scheme covers it.

What is the lowest deposit you can put on a house?

With the Family Home Guarantee for single parents or a guarantor loan, you could need as little as 0%–2% deposit.

How much deposit do I need for a $500,000 house in Australia?

For a $500,000 property, a 20% deposit would be $100,000 with no LMI, while a 5% deposit would be $25,000 and would likely require LMI unless waived.

Is $40,000 enough for a house deposit?

Yes, for properties under $800,000 with a 5% deposit requirement, $40,000 is enough to qualify, though you will need extra funds for costs like stamp duty and legal fees.

Can I combine the First Home Owner Grant with a low deposit loan?

Yes, many buyers use the grant to boost their deposit or cover costs. It is common to combine grants with FHBG or bank low deposit loans.

Are interest rates higher for low deposit loans?

Often, yes. Lenders may charge a higher rate due to the increased risk. Always compare rates and total loan costs before deciding.

Do low deposit loans work for investment properties?

Most schemes like FHBG are for owner-occupiers, but some banks offer low deposit loans for investors, usually with stricter lending criteria.

Final Thoughts

There is no single solution when it comes to the best low deposit home loans. The right choice depends on your income, deposit size, location, and eligibility for government support.

Queensland buyers have multiple pathways from guarantor loans to shared equity, which can make the dream of owning a first home achievable. By comparing lenders, using tools like a home loan calculator, and getting tailored advice, you can take your next step with confidence.

At LM Edge, our experienced mortgage brokers on the Gold Coast specialise in helping home buyers secure the best low deposit home loans for their needs. 

Visit lmedge.com.au or call us on 07 4721 4772 to speak with one of our home loan specialists today and start your journey onto the property ladder.

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