How to Buy a Home With No Deposit in Australia

Buying a home with no deposit in Australia

Not with a standard home loan. Lenders generally want a deposit of at least 5%, and they only accept that under a government scheme or when you pay Lenders Mortgage Insurance (LMI) on top of stamp duty and buying costs. However, other options let you move in with no deposit of your own, such as 0% deposit rent-to-own homes, where you build the deposit while you live in the home.

Your options with no deposit or a low deposit

There are six realistic routes. Here is what each one costs upfront on a $750,000 home, which sits in the typical range for a Queensland or New South Wales house.

Saving the full 20%

A 20% deposit avoids LMI and gives you the widest choice of lenders. It is the cheapest way to buy if you can get there. The cost is time: while you save, you keep paying rent and prices keep moving. Our Australian Housing Crisis Tracker shows how many years that takes on average earnings in each state.

A 5% or 10% deposit with LMI

Most lenders will go to a 90% or 95% loan if you pay LMI. The insurance protects the lender, not you, and it is usually added to your loan, so you pay interest on it for the life of the mortgage. On a $750,000 home it is roughly $14,000 with a 10% deposit and $32,000 with 5%.

Some lenders also offer deposit-assist loans, which lend you the deposit itself as a second loan. They get you in sooner, but the second loan usually carries a higher interest rate than a standard mortgage, and you carry two debts on one home. Check the rate, fees and repayment terms closely before signing.

The 5% Deposit Scheme

The Australian Government 5% Deposit Scheme lets first home buyers buy with a 5% deposit, or 2% for single parents and legal guardians, with no LMI. Since 1 October 2025 there are no income caps and no limit on places. We compare it side by side with Rent-to-Own in 5% Deposit Scheme vs Rent-to-Own.

It is limited in other ways. You must be a first home buyer, or not have owned property in the last 10 years, and an Australian citizen or permanent resident. You apply through a participating lender, and the home must sit under the price cap for its area:

• In Queensland, $1,000,000 in Brisbane, the Gold Coast and the Sunshine Coast; $700,000 elsewhere.
• In New South Wales, $1,500,000 in Sydney and the regional centres, including Newcastle, Lake Macquarie, Illawarra and the Central Coast; $800,000 elsewhere.

You still need the 5% in cash, plus stamp duty unless a first home concession applies, and a loan of about 95% of the price.

Help to Buy

Help to Buy is a shared equity scheme. You put in at least 2%, and the government contributes up to 30% of the price of an existing home or 40% of a new one, owning that share of your house.

Places are limited to 10,000 a year, and you apply through a small panel of participating lenders. You need to be an Australian citizen with a taxable income at or below $103,000, or $165,000 for joint applicants and single parents. The government's share is repaid at the home's value when you sell or buy it out, so it shares in any growth. Help to Buy isn't a rent-to-buy scheme: for the difference, see rent-to-buy schemes, government vs private. For a full side-by-side with Rent-to-Own, see Help to Buy vs Rent-to-Own.

Rent-to-own

Rent-to-own is not a loan. You find a home listed for rent that you'd love to buy, the owner agrees to rent it to you on a Rent-to-Own basis, you move in as the tenant, and you hold an option to buy it later. Part of your weekly payment builds your deposit. For every step in detail, read How Rent-to-Own Works in Australia.

How rent-to-own works when you have no deposit

You find a home listed for rent on realestate.com.au that you'd love to buy, and ask the owner, through their property manager, to rent it to you on a Rent-to-Own basis. Once the owner is interested, PublicSquare acts as your buyer's agent. You move in with an option to buy it later. You pay the listed rent plus an extra 50% of your first-year rent on top. That extra amount becomes your deposit, and at any time in years 4 to 8 you can switch to a mortgage and buy the home, with your choice of lender.

With PublicSquare's Rent-to-Own program:

• Your rent is reviewed once a year by the property manager's rental appraisal, and increases are capped at 4% or the legal maximum, whichever is lower.
• The extra 50% stays the same for the whole lease and never rises.
• Your purchase price is the higher of a contracted minimum or an independent valuation. The minimum grows by 8% a year if you buy in year 4, stepping down to 4% a year if you buy in year 8, well below the 25-year long-term house average of 6.8% a year (CoreLogic, 1993–2018). These rates apply to houses. Apartments typically appreciate more slowly, so they may have lower minimum growth rates in the contract.
• The owner pays the rates, insurance and maintenance during the lease.
• If you can't get a mortgage in years 4 to 8, the Owner's Sell-Back Guarantee lets you request an open-market sale and receive your contributions back, less any unpaid amounts and any shortfall.

How much deposit rent-to-own builds

On a $750,000 home renting for $650 a week, the extra 50% is $325 a week, or $16,900 a year. By the end of year 6 that is $101,400, about 10.1% of the contracted minimum price. By the time the option closes in year 8 it is $130,975, about 13.3%.

To see your deposit grow year by year, use the Deposit Builder calculator.

What rent-to-own costs upfront and each week

No deposit, and limited additional costs. There is no stamp duty or LMI to start, because you aren't buying yet. You may pay these costs when you complete your purchase, typically in year 6, 7 or 8.

Getting pre-approved is free. These are the costs before you move in, plus moving costs:

• The signing fee of $357.50 including GST ($325 + GST), paid when you sign your buyer's agent appointment (any time, or once an owner is interested). It's non-refundable and credited against your first fee instalments.
• Independent legal advice, $1,100 including GST with our pre-arranged referral. Any solicitor typically charges $2,000 to $3,000.
• The rental bond under your standard tenancy agreement, as with any tenancy.
• The first 12 weeks of PublicSquare's buyer's agency fee, less your signing fee credit, paid when your Contract with the owner is fully signed. The fee is spread over 260 weekly instalments with no interest; the remaining 248 are paid weekly from move-in.

Each week on the example home you would pay $650 rent, plus the extra 50% of $325, plus PublicSquare's weekly fee instalment. On Standard, the weekly fee is $84.62 on this $750,000 home ($22,000 over 5 years). The extra $325 is credited to you as your deposit when you buy.

For comparison, the 5% Deposit Scheme on the same home needs about $51,400 in cash on day one. Once you move in, you also pay principal and interest repayments on a 95% loan, plus rates, insurance and maintenance.

Which option suits you

• If you have 20%, buy with a standard mortgage. It costs the least over time.
• If you have 5% and the home is under the price cap, the 5% Deposit Scheme avoids LMI.
• If you have 5–10% but don't qualify for the scheme, a high-LVR loan works, but price in the LMI.
• If you're a citizen under the income limits and happy for the government to own a chunk of your home, Help to Buy needs just 2%, if you can get one of the places.
• If you have steady income but no deposit, and plan to stay four years or more, rent-to-own homes let you rent a home you'd love to buy and switch to a mortgage when you're ready.

Rent-to-own is currently available in Queensland and New South Wales.

When rent-to-own isn't the right choice

Rent-to-own suits people who could service a mortgage but don't have the deposit. It is the wrong fit if any of these apply:

• You already have a 20% deposit. A standard mortgage now will usually cost you less.
• You may move within four years. The option to buy opens in year 4, so it suits people planning to stay.
• You can't see a path to a mortgage. You will need a lender to approve you when you buy. The years of on-time payments help, but no lender's decision can be guaranteed.
• You want the cheapest weekly housing cost. Your payment is the rent plus the extra 50% and PublicSquare's fee instalment, so it is higher than renting the same home.
• You expect prices to fall. You pay at least the contracted minimum, so a falling market does not lower your price.

If you can't get finance in years 4 to 8, the Owner's Sell-Back Guarantee lets you request an open-market sale with three lender rejection letters, provided you are not in default. You pay a fixed $3,300 marketing cost and receive your contributions back, less any unpaid amounts and any shortfall if the home sells below the minimum price. The owner can instead choose to keep the home and pay your contributions back, without interest.

Written by

Jarrod Wills

Buyer's Agent

Licensed agent · Former mortgage broker

Over 10 years’ experience as a mortgage broker and real estate agent, now a licensed buyer’s agent with PublicSquare since 2021. He has worked on 100+ property transactions and knows the Queensland and New South Wales markets and the Rent-to-Own model well.

Reviewed by

Dean Arnold

Founder & CEO

Licensed real estate agent

I started PublicSquare in 2021 to give homebuyers a real path to ownership without a deposit, and landlords a stronger-cashflow alternative to a standard rental. I hold real estate licences in Queensland and New South Wales and personally review every property that enters the program.

Read more about Rent-to-Own.

This article is general information only and does not take your personal circumstances into account. PublicSquare is a licensed real estate agency, not a financial adviser or credit provider. Consider seeking independent advice before making a decision.