With over 75% of prospective home buyers having less than 20% saved for a deposit, according to Helia’s Home Buyer Sentiment report for 2024, many Australians are looking for alternative ways to buy a home.

Fortunately, there are several strategies buyers can use to purchase property without a full 20% deposit saved.

Government grants

There are many state and federal government initiatives designed to help first home and other buyers bridge the gap between what they have saved and homeownership.

The Home Guarantee Scheme is a federal government initiative that provides support for eligible buyers to purchase a home sooner. It includes the:

• First Home Guarantee, which provides eligible first home buyers a guarantee with as little as a 5% deposit saved.

• Regional First Home Buyer Guarantee, which supports eligible buyers in a regional area with as little as a 5% deposit saved.

• Family Home Guarantee, which provides support to eligible single parents and guardians with as little as a 2% deposit saved.

Lender’s mortgage insurance (LMI)

LMI is a premium paid to your lender to protect them in case you default on your mortgage. It is typically applied to your home loan if you have less than 20% of your deposit saved. 

LMI can add to the upfront cost of your mortgage but it allows you to purchase a home with a smaller deposit.

This means you can buy a home sooner, saving you money in the long run if property prices continue to rise, which is likely, according to Domain, who predict a 3-6% increase in 2025 for houses and 2-4% for units. 

The Bank of Mum & Dad

According to the Housing Monitor, the Bank of Mum & Dad helps around 40% of first home buyers purchase a home. There are two ways family can help:

• Lending money for the deposit, either as a gift or a loan.

• Acting as guarantors, using their property as security for your mortgage.

Buying with a friend or partner

Consider buying with a friend or partner to pool savings and combine incomes. Co-owning also reduces ongoing costs like monthly mortgage repayments. 

Get professional advice 

It’s important to remember that each path to homeownership has its own risks and benefits. It can be helpful to consult with a mortgage broker about the options available to you. They will use their market knowledge and finance experience to find a solution that suits your current financial situation and long-term goals.

Looking to start your journey into homeownership? As an award-winning mortgage broker in Sydney with over 390 five-star Google reviews, Eventus Financial can help. Schedule a no-obligation consultation with Alex to get started.