100 per cent Home Loan

There are 2 options for you to borrow 100 per cent loan.

  • First option is using your parents’ property as a guarantee security . By providing additional property, some lenders may lend you 100 per cent of the property value without asking for any savings or deposit. This option is good for both first home buyers and investors who are looking for borrowing 100 per cent of the purchase price.
  • The second option is using your existing property as an additional security. This means that if you already owned a property, regardless the property is unencumbered or under a small mortgage, you can use it as an additional property and borrow 100 per cent of the new purchase price.
Any other option to borrow 100 per cent loan?
  • Unfortunately, there are only 2 options for you to borrow 100 per cent loan. First one is using parents’ property as guarantee security and the second one is using your existing home as an additional security. If you cannot meet these 2 options, most lenders can only lend you maximum 95 per cent.
  • In order to qualify for a 95 per cent loan, you need to have 5 per cent deposit which has been savings regularly in your bank account for more than 3 months. You are also required to stay with your employer for a period of time. The lenders also require good credit scoring to ensure that you will be able to make the repayment.
Any savings history required for No Deposit Home Loan
  • On most situations, savings history will strengthen your application although if you have a guarantor, you will not be required to come up with any savings.
  • Due to the cost associated with the purchase, such as stamp duty, conveyancing costs, you will need to have minimum 5 per cent of the purchase price. Some banks may also accept gift from family or sale of existing property. Some banks may also offer a 95 per cent loan plus credit card, which helps to cover any costs incurred.
  • The investors need to pay higher stamp duty cost than other borrowers. Therefore, in most cases, they are required to have at least 6 per cent deposit of the purchase price. However, the deposit will not be required if they have a guarantor.
  • If you are looking for a construction loan, there is an option which you will not need any deposit if you are first home buyer and have a guarantor.
Benefits of No Deposit Guarantor loan:
  • No deposit is required.
  • The borrowers can borrow full purchase price plus any cost associated with the purchase without paying Lender Mortgage Insurance.
  • The guarantors have fixed liability and are only responsible for the guarantee amount. They are not required to make any regular repayments. When the borrowers meet the bank criteria, they can request for the guarantors to be removed. This situation normally happens when the balance owing is less than 80 per cent of the property value.
  • The investors can use the equity of their existing home to purchase another property without paying any deposit. This helps the investors to save the fund for home renovation or personal use. Purchasing investment property with no deposit is also benefial for tax purposes.
Who is eligible for 100 per cent loan?
  • First home buyers and any borrowers buying the property for owner occupied purpose can borrow 100 per cent loan with help of a guarantor.
  • Investors are also eligible for 100 per cent loan. Once again, you need to use your existing home or a family member’s home as an additional security. However, some lenders may have strict criteria when providing this product to the investors as to the banks; the investors seem to have higher risk of default than the other borrowers.
Lending requirements for no deposit loan:
  • All lenders have very strict credit requirements with no deposit loan.
  • Perfect repayment history on any existing debts, such as personal loans or credit cards, is also required.
  • Property location: Most lenders have restriction on the area of the property being used as security.
  • Property type: The purchased property must meet the standard type such as houses, townhouses or units.
  • Stable employment with good income: Your income must be good enough to easily repay the loan.

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