No Deposit Home Loans to 90%
An alternative to a 95% no deposit home loan is that of combining a traditional 90% home loan with a deposit gap loan which provides you with the almost full funding to cover the purchase price. This is becoming a more popular choice for home buyers as they are looking to have a greater choice of home loan provider and also have equity in their property right from the outset.
Whether you have a 5% deposit or not there are many home loan options available to you and there are some tangible benefits when choosing a 90% loan product as compared to 100% no deposit home loans. Most importantly there are some genuine savings to be had from a mortgage insurance point of view.
It should be noted that with the Credit Issues being experienced Globally, Lenders know require applicants to show 5% genuine savings for any loans that are above 85% Loan to Value. Although Lending institutions will still consider applicants under a no deposit scenario, it is of utmost importance that you can demonstrate a 5% savings pattern over a 6 month period.
For further information we recommend, prior to any purchase that you obtain a pre-approval, ensuring that the Lender of choice is comfortable in providing you with the finance to purchase your First Home.
You can contact us for more clarification.
Below are some of the benefits of obtaining a 90% home loan plus a deposit gap loan to fully fund your purchase:
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A lower LVR (loan to valuation ratio) means a lower rate of mortgage insurance which saves you money and lowers your out of pocket expenses |
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You are still able to fully fund your purchase when you combine the 90% home loan with a deposit gap loan |
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The equity in your home is at 10% right from the outset and you can repay the deposit gap loan within 3-5 years therefore leaving equity in your home |
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For first home owners who combine the 90% home loan and the deposit gap loan along with the grant the out of pocket expenses are minimised. This enables you to enter the property market sooner rather than later |
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There are a greater variety of 90% home loans in the market as compared to no deposit home loans so your choice of lender and product specifications is also broadened |
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Interest rates for 90% home loans are generally more competitive the outright no deposit home loans |
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The location in which you can purchase your property is broader as compared to no deposit home loans as the postcode listing are less restrictive |
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The potential to leverage off the equity in your home within 2-3 years to completely pay out the deposit gap loan or other debts is within easier reach |
If you already have the 10% deposit required to fund the deposit gap you can still utilise the deposit gap loan to cover the associated costs of purchase so the way in which you choose to structure your finance is very flexible and can be tailored to suit your needs and circumstances.
With 90% home loans you also have the choice of product features, some of which are listed below:
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Redraw facility available |
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Offset account to minimise interest paid |
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Full set of banking services such as savings account, cheque books, credit cards |
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Internet banking with BPay and direct credit options |
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Fixed or Variable home loan interest rates |
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Direct salary crediting to save interest |
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Weekly, fortnightly and monthly repayments options |
There are many more features available across the lending institutions who offer 90% home loans and whether or not you combine it with a deposit gap loan the product option is a wise choice from many perspectives.
Why not contact us to find out more about the home loan and deposit gap loan options available and one of our consultants will help you make the right choice.
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Useful Sites as a point of reference: |
| Web Designs & CRM Systems | FBAA | More info on No Deposit Home Loans | Other Home Loan Options |  |
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