First Home Buyers Loan With No Deposit In Melbourne

Break Free Home Loans are a leading Melbourne mortgage broker, with over 20 years of industry experience. We provide lending solutions and advice tailored to your needs. We work closely with clients as trusted advisors and are accessible to clients when needed.

Our brokers work hard at understanding our client’s unique circumstances and helping them overcome common home loan challenges. Whether you’re a first home buyer or an experienced investor, we’ll help you find the best home loan for your situation. Whether you’re self-employed and have trouble proving your income or you’re a contractor or casual worker, we offer solutions for all types of clients’ income sources.

Are you a first home buyer in Melbourne looking for a no deposit loan? There are a number of no deposit home loan first home buyer finance options available to you, and we can help you find the best one for your needs. We understand that buying your first home can be a daunting experience, so we’re here to help you every step of the way. Our brokers can help you find a no deposit loan that suits your needs, so you can focus on finding your dream home. Talk to Break Free Home Loans today.

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What Are No Deposit Home Loans For First-Time Buyers?

A no deposit loan is a home loan that does not require the borrower to have a down payment saved prior to purchasing a property. These types of loans are available to first-time buyers who may not have the funds available for a standard down payment, or those who are looking to enter the property market with limited savings.

How Much You Can Borrow

Many first-time buyers are unable to save up sufficient cash for a deposit, owing in part to increasing house prices in many parts of Australia. Don’t worry. There are a number of lenders who offer low to no deposit home loans in Australia, each with their own set of criteria and conditions. It’s important to compare your options and shop around for the best deal before signing on the dotted line. Your borrowing limit will depend on the lender’s assessment of your income and assets. To qualify for no deposit home loans first home buyers finance, you need a near perfect credit score and steady work history.

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How To Get A First Home Buyers Loan With No Deposit

A no deposit loan is a home loan that does not require the borrower to have a down payment saved prior to purchasing a property. These types of loans are available to first-time buyers who may not have the funds available for a standard down payment, or those who are looking to enter the property market with limited savings.
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Using Superannuation

If you take advantage of the First Home Super Saver program, you may use your super for a down payment on your first home (FHSS). The FHSS is intended to assist first-time buyers, such as yourself, by allowing you to contribute extra money to your super account. These contributions can then be taken out and used towards your deposit. Keep in mind that accessing your superannuation balance before retiring has certain restrictions. These rules are meant to guarantee that you have enough money to live comfortably after you retire.
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Find A Guarantor

One option is to use a guarantor loan. This is where a family member or friend agrees to act as security for the loan, meaning that they will be responsible for repaying the loan if you default on your repayments.
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Use A Cash Gift

If you have relatives who can and want to contribute (and we understand that this isn’t always the case), they may give you a cash gift to raise your deposit. There are, however, restrictions to consider. A given deposit home loan might not be as simple as approaching a lender with your parent’s money. Private lenders in Melbourne are more than likely to demand evidence of where the cash came from — after all, it might be a credit card withdrawal. Some lenders will ask for a ‘gift letter,’ which confirms that the funds have been unconditionally and without expectation of return handed over.

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Use First Home Owner Grant

Aussie lenders will allow you to use government grants and concessions such as the First Home Owner Grant to offset the cost of your deposit. This can help you finance your property much sooner. Keep in mind that you still have to cover other upfront costs of buying a home, such as legal fees and moving expenses.
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Other

You can also finance your first home buyer no deposit loan through equity in a property you already own. The difference between how much your house is worth now and how much you still owe on the mortgage for it is known as equity. This is referred to as ‘positive equity’ if your property’s value exceeds the amount you still owe on the home loan for it. You may be able to use some of your positive equity to pay a deposit on another property, that is, if you can afford to repay two mortgages simultaneously.

What To Consider When Applying For No Deposit First Home Loans?

Getting a no deposit home loan in Melbourne can be a great way to get into the property market without having to save for a large deposit. But it’s important to compare your options and understand the pros and cons before you apply. The following are some things to consider when you’re applying for a first home buyers loan with no deposit:

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Interest Rate

If you take out a mortgage for more than 80 percent of the property’s purchase price, you will typically pay higher interest rates. In addition, borrowing more generally leads to increased interest payments to the lender throughout the loan’s life.
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Variable Rate

Choosing between variable and fixed interest rates on your no deposit home loans is another big decision. Melbourne no deposit home loans with fixed interest rates offer certainty around repayments, while variable rates may start lower but could rise over the loan term. Split your no deposit home loan so you have both a fixed and variable rate if you want to hedge your bets, or go all in on one or the other. Variable rate loans, however, tend to offer more features. You need to see whether they offer you the value you need as your payments will fluctuate over the life of your loan and are not as easy to manage.

Fixed Rate

A fixed interest rate loan will allow you to make the same repayments over the entire loan period. This predictability lets you budget your loan obligations with ease. No matter what no deposit home loans option you choose in Melbourne, remember to compare interest rates, fees and features so you can find the best deal for your needs.

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Fees

Many mortgage lenders charge fees for processing and organising your application. These might be charged in the form of application fees, legal costs, settlement charges, and valuation expenses, which can range from a few hundred dollars to well over $1,000 each. On top of paying interest, you may be charged a monthly or annual service fee by lenders for any administration expenses associated with your mortgage. Ongoing services fees are particularly frequent with packaged loans, so think about whether the benefits outweigh the cost of the charge.

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The repayment frequency is also an important consideration when you’re comparing loans. Some lenders offer fortnightly or monthly repayments, which can save you a lot of interest and money over the life of your loan.
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Loan Term

A no deposit home loan will often come with a shorter loan term than a regular home loan. That’s because the lender is taking on more risk by lending you money without any security.

How To Calculate Payments?

No deposit home loans are usually interest-only loans, which means you’ll only be required to make repayments on the interest accrued each month. This can make no deposit home loans more affordable in the short-term, but it’s important to remember that you’ll still need to repay the full loan amount at the end of the loan term.

To calculate your monthly repayments, you’ll need to know the loan’s interest rate and the loan amount. You can then use an online repayment calculator to estimate your repayments. It’s also important to remember that no deposit home loans usually have shorter loan terms than other types of private home loans, so you’ll need to be prepared to make higher repayments each month.

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Choosing A Lender For No Deposit Home Loans For First Home Buyers

If you have no savings or your savings are less than 20 percent of the purchase price of the property you want to buy, a no deposit home loan may be an option for you. There are a number of no deposit home loan products available from a range of lenders, each with their own eligibility criteria, features and benefits.

Whether you’re a first-time buyer or trying to get into the market after a break, no deposit home loans can make it easier for you to save for your property. If you’re considering taking out a no deposit home loan, it’s important to compare your options and find the loan that best suits your needs. Talk to our brokers today to compare no deposit home loans from a range of lenders.

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Need Help?

The bottom line is that no matter what type of first home buyer loan you’re looking for, it’s important to compare as many different offers as possible to make sure you’re getting the best deal. Call us today to learn more about our no deposit home loan options for first home buyers in Melbourne.

Frequently Asked Questions

The following are some of our most popular questions on first home loan no deposit finance:

What Are No Deposit Home Loans For First-Time Buyers?

A no deposit home loan is a type of mortgage that allows first-time buyers to purchase a property without having to save for a deposit first. This can make it easier to get onto the property ladder, as you won’t need to have such a large amount of money saved up. No deposit home loans work in a similar way to regular home loans, except that the loan is provided without a deposit. The loan will still need to be repaid, with interest, over an agreed period of time.

How To Get A First Home Buyers Loan With No Deposit?

First home buyers loan with no deposit is available from a variety of lenders in Australia. These loans typically have higher interest rates and fees than other types of loans, so it’s important to consider all your options before you apply. The best way to find a suitable no deposit home loan is to compare your options and make sure you understand the conditions of each loan before applying.

To apply for a first home buyers loan with no deposit, you’ll need to show you have a:

  • High credit score: Borrowers must typically have a good credit score with one of the major credit reporting agencies.
  • Responsible payment history: Borrowers must also provide responsible payment history, such as timely payments of their existing debts, such as credit cards, personal loans, and rent.
  • Stable income from employment: No-deposit borrowers must have a steady, ongoing job that offers a substantial income to enable them to repay the loan.

What To Consider When Applying For No Deposit First Home Loans?

No deposit home loans have become popular in recent years as they allow first home buyers to get into the property market sooner. However, there are a few things to consider before you apply for one of these loans.

  • Your loan term: The amount of money you borrow and the length of your loan term can also affect how much interest you pay on your no deposit home loans. Longer loan terms often mean lower repayments but they also mean you will pay more interest over the life of the loan.
  • Your repayment schedule: The frequency of your repayments can also have an impact on the amount of interest you pay. Making repayments more frequently can help to reduce the amount of interest you pay, but it will also mean higher repayments. Make sure you get a flexible repayment schedule you can work with.
  • Your interest rate: Another way that lenders offset the risk of no deposit loans is by charging a higher interest rate. This means you could end up paying more for your loan over the life of the mortgage.
  • Upfront expenses: Many mortgage lenders charge you money upfront when you submit an application for a home loan. These might include application fees, legal charges, settlement costs, and appraisal fees, which can range from a few hundred dollars to well over $1,000 each.
  • Loan insurance: If you’re borrowing more than 80 percent of the property value, you may also have to pay for the lender’s mortgage insurance (LMI). LMI is a one-off insurance premium that protects the lender in the event that you default on your loan. This protects the lender in case you can’t make your repayments and they have to sell the property to recoup their losses. LMI can add thousands of dollars to your loan, so it’s important to factor this into your budget.

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