Not having a 20% deposit doesn't mean you can't buy a home. There are genuine pathways into the market with as little as 5% — from government schemes to lender's mortgage insurance to guarantor arrangements. Blambles explains all your options honestly, without pushing you into the wrong one.
A low deposit home loan is one where the borrower contributes less than 20% of the property's value as a deposit. When you borrow more than 80% of a property's value — i.e. at an LVR above 80% — most lenders require you to pay Lender's Mortgage Insurance (LMI). LMI is a one-off insurance premium that protects the lender (not you) in the event you default on the loan. It can be paid upfront or capitalised into the loan, and it can range from a few thousand to tens of thousands of dollars depending on the loan size and LVR.
LMI is not the only pathway into the market with a small deposit — and it's important to understand all your options before committing. The federal First Home Guarantee allows eligible first home buyers to purchase with a 5% deposit without paying LMI — because the government guarantees the difference between your deposit and 20% to the lender. Places are limited and income and property price caps apply, but for those who qualify, it's a significant financial benefit.
A guarantor home loan is another alternative — where a parent or family member uses their own property equity to guarantee a portion of your loan, allowing you to borrow without LMI and without a 20% deposit. The guarantee is typically limited to the amount needed to bring the loan below 80% LVR — protecting the guarantor from full exposure.
Some lenders also offer specialist "low deposit" or "95% LVR" products for certain borrower profiles — even where neither a government scheme nor a guarantor is involved. These typically involve LMI and require strong income stability. Blambles knows which lenders are most competitive for high-LVR lending and which are likely to decline early in the process.
Eligible first home buyers can purchase with 5% deposit without paying LMI — with the government guaranteeing the remaining 15% to the lender. Places are limited each financial year.
LMI allows you to borrow above 80% LVR by paying a premium that protects the lender. It can be capitalised into your loan — meaning you don't need extra cash upfront, but your loan balance increases.
A parent or family member with property equity can act as a limited guarantor — covering the gap between your deposit and 20%, so you avoid LMI entirely without waiting to save more.
Eligible single parents — including single legal guardians — can purchase with just a 2% deposit under the Family Home Guarantee, with no LMI required.
Most lenders require evidence of genuine savings (typically 5% held for at least 3 months) as part of a low deposit application — Blambles can help you document this correctly.
Waiting to save a full 20% can take years — during which property prices may rise. Blambles can help you assess whether entering the market now with a low deposit makes more financial sense.
We review your savings, income and situation to determine which pathways are open to you — First Home Guarantee, LMI, guarantor or a combination — and explain the costs and trade-offs of each honestly.
Blambles helps you choose the right approach for your circumstances — not just the quickest path, but the one that leaves you in the best financial position over the medium term.
We identify lenders who are strong for your specific deposit level and pathway — and apply for pre-approval so you can shop with confidence.
Once you've found a property, we upgrade to a formal application — managing the LMI process, guarantor documentation or scheme application as required.
We manage the approval and settlement process end to end — including coordinating with any guarantor and ensuring all government scheme requirements are met before settlement.
Low deposit lending is an area where the wrong decision can be expensive. LMI premiums can be significant — and paying LMI unnecessarily (when a government scheme or guarantor would have avoided it) is a real cost that's hard to recover. Blambles helps you understand exactly what each pathway costs and which is best for your situation — before you commit.
Access to 40+ lenders also matters here: different lenders calculate LMI premiums differently, and some are more competitive than others for high-LVR lending. Lenders participating in the First Home Guarantee are a subset of the full market — Blambles knows which ones offer the best overall loan (rate, features and service), not just which ones participate in the scheme.
The service is free to you, and the advice can save you from paying significantly more than you need to to get into your first home.
LMI is a one-off insurance premium you pay when borrowing above 80% LVR. It protects the lender — not you — if you can't repay the loan. LMI can run from a few thousand dollars at 85% LVR up to tens of thousands at 95% LVR on a large loan. It can be added to your loan (capitalised) or paid upfront. Alternatives that avoid LMI include the First Home Guarantee, a guarantor arrangement or saving to 20% deposit.
Some lenders will lend at 95% LVR (i.e. with a 5% deposit) for owner-occupier borrowers — but the LMI premium at this level is substantial, and lender criteria are tighter. The First Home Guarantee allows eligible first home buyers to borrow at 95% LVR without LMI, which is generally a better outcome where eligibility is met. Blambles can assess whether 95% lending is appropriate and feasible for your specific situation.
LMI premiums are set by the LMI providers (QBE and Helia are the two major ones in Australia) and vary based on your LVR, loan amount and whether it's an owner-occupier or investment property. A 90% LVR loan of $500,000 would typically attract an LMI premium of around $8,000–$10,000. At 95% LVR, the premium is higher. Blambles can provide an LMI estimate as part of the upfront cost discussion before you decide how to proceed.
The First Home Guarantee (formerly the First Home Loan Deposit Scheme) allows eligible first home buyers to purchase with a 5% deposit without paying LMI — the government guarantees the remaining 15% to the lender. To be eligible, you must be an Australian citizen or permanent resident, a first home buyer, earn under the income threshold ($125,000 for individuals or $200,000 for couples in 2025–26) and purchase a property under the relevant price cap for your area. Blambles confirms your eligibility as part of the initial consultation.
Free consultation, no obligation. Blambles will assess your deposit, your eligibility and all the options available to you — and help you choose the one that makes the most financial sense.