• 100% home loans

    Borrowing 100% of the purchase price

  • Home ownership is the dream of many Australians, but taking that first step onto the property ladder is now harder than ever. The current housing affordability crisis puts many properties out of the reach of first home buyer budgets. And spiralling rents make it increasingly difficult to save for a deposit without significantly impacting on one's lifestyle. As a result, many young people put their dreams on hold and delay buying their first home until well into their 30’s.

    To assist first home buyers overcome these difficulties, some lenders offer either low or no deposit home loans through the involvement of additional guarantors. A no deposit home loan enables the purchaser to borrow up to 100% of the purchase price of the property, without affecting eligibility for the First Home Owners Grant or first home buyer duty exemptions. With RAMS Fast Track, our guarantor1 option, you can borrow up to the full purchase price2 (or valuation if lower) plus upfront costs. You just need to be able to afford the repayments and have funds available to cover the transaction related costs such as legal fees, any statutory charges and mortgage insurance costs.

    To help understand how a no deposit home loan works, here’s a simple example: Say Andrew wants to buy a $350,000 property. He’d usually have to save a minimum 5% deposit (or $17,500) and show evidence of a savings history. Because he’s borrowing over 80% of the property valuation, Andrew would normally have to pay mortgage insurance. On this loan amount this would typically be over $6,000. In addition he would have to pay other fees such as legal costs and possibly stamp duty (in some States first home buyers receive permissions or exemptions depending on the price of the property). Straight away, we can see they he is going to need roughly over $25,000 just to get started.

    It’s worth shopping around and checking out what’s on offer, as products do vary. For example, some lenders charge the borrower a higher interest rate for a no deposit home loan than on a more traditional home loan, where a 5% or more deposit is paid. So when it comes to choosing a lender, a little research can pay big dividends.

    1The guarantee must be secured by the guarantor's (an immediate family member which is acceptable to RAMS) residential property. 2A guarantor simply needs to provide RAMS with a limited guarantee supported by either a first registered mortgage (First Registered Mortgagee (Westpac Banking Group) must provide consent on or before settlement in order for settlement to occur) or in a limited number of circumstances a second mortgage (Second mortgage will only be accepted if the first mortgage is held with the Westpac Banking Group) over their property, for the amount you need to borrow over 80% (LVR of 120% of purchase price is only applicable where the loan purpose includes both consolidation of other debts and renovations or home improvements) of the property value, and you won’t be charged a cent in lender’s mortgage insurance.

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