Official interest rates fell to 3.00% in April 2009. Despite historically low rates, if you haven’t saved a significant deposit, finding a no deposit home loan is a rarity.
The Australian mortgage market has moved noticeably in 2008 and 2009 and many non-bank lenders have had to exit the marketplace. Lending has now become a more difficult expense to wear, and as a result, lenders have had to tighten their lending criteria when approving mortgages.
Traditional no deposit home loans, whereby you borrow 100% of the purchase price have been replaced with a more conservative LVR of 80% without mortgage lenders’insurance. It’s possible to borrow up to 95%, provided you are able to exhibit a strong savings history, a healthy deposit and are able to pay for lenders’ mortgage insurance.
A steady income will assist if your genuine savings are bare. Lenders have taken these measures not only to protect themselves, but the borrower as well. Having the capacity to repay the loan amount is weighed heavily. So take the time to do the math to ensure you have sufficient funds to meet monthly repayments.
The table to the right displays low interest rate home loans. To compare more options, go to our variable mortgages page to see some of today’s best deals.