The biggest barrier to home ownership has always been raising the deposit, and with the rapid increases in property values experienced over the last few years, a great many first home owners are despairing of ever being able to get off the rental treadmill.
This has brought about a prevailing mood that first home buyers have effectively been knocked off the ladder; something that is fortunately untrue.
There are a number of (predominantly non-bank) lenders in the market who have a range of different solutions for low deposit mortgages. This means people who have a low deposit can still buy their own home.
The requirements vary from lender to lender, but typically, if you have:
- A good credit history
- Low fixed commitments inclusive of student loans
- Have a reasonable income (and are ideally joint borrowers)
It is likely that you can still borrow money for a mortgage relatively easily, even if you don't have a deposit.
You will probably pay a slightly higher interest rate on your mortgage than is otherwise available; however the key is to use that money as a stepping stone to property ownership. Once you're in your own home you are off the rental treadmill and can start building equity in your home.
By doing things like paying as much as you can on your mortgage and making low cost improvements to the property, it won't be long before you have some equity in your property. Once you have 10% (give or take) you can approach mainstream lenders for a mortgage at market (lower) interest rates.
To apply for your first mortgage, complete our preliminary mortgage application here. You may be in your home sooner than you hoped.
You can download a copy of our free booklet "Home at Last". Includes the 7 easy steps to owning your first home. This is a practical guide for first home buyers (and anyone else who wants to buy a house).