Want to buy a home on the Gold Coast but don't have a 20% deposit? This guide compares your three main pathways to success. We break down the pros and cons of paying LMI, using a government scheme like the Home Guarantee Scheme, and leveraging a Guarantor Loan. Discover which low-deposit strategy is the right one for you.
For many aspiring homeowners on the Gold Coast, saving a 20% deposit can feel like an impossible mountain to climb, pushing their dream of owning a home further into the future.
The great news is, you don't have to wait years to save a huge deposit. There are three main pathways that can get you into your own home much sooner with a much smaller deposit. This guide compares them side-by-side to help you find your best route.
Pathway #1: The LMI Pathway (Pay Your Way In)
This is the most common path for those with a deposit of between 5% and 19%.
- How it works: You pay a one-off fee for Lenders Mortgage Insurance (LMI). This insurance protects the bank (not you) and gives them the confidence to approve your loan with a smaller deposit. The cost of LMI can often be added to your total loan amount.
- Best for: Buyers who don't qualify for other schemes but want to get into the Gold Coast market quickly to take advantage of potential capital growth.
Pathway #2: The Government Pathway (Get a Helping Hand)
This pathway uses powerful government initiatives to help you avoid the cost of LMI.
- How it works: You use a program like the Home Guarantee Scheme. If you're an eligible first home buyer with a 5% deposit, the government 'guarantees' the remaining 15% of the deposit for the lender.
- Best for: Eligible first home buyers who want the huge financial boost of not having to pay for LMI, which can save them thousands of dollars.
Pathway #3: The Family Pathway (The Guarantor Loan)
This pathway allows you to leverage the support of your family to get into the market.
- How it works: A close family member (usually a parent) who owns their own property uses the equity in their home to provide additional security for your loan.
- Best for: Buyers who may have little to no cash deposit saved but have a supportive family member willing to help. A guarantor loan can allow you to borrow 100% of the purchase price and avoid LMI entirely.
Which Pathway is Right for You?
Choosing the right pathway depends entirely on your personal circumstances. Do you have a family member who can help? Do you meet the criteria for the government schemes? Is paying LMI a smart investment to get you into the market sooner?
Our job as your mortgage broker is to be your expert guide. We'll assess your situation, explain the pros and cons of each path in detail, and create a personalised strategy to get you into your Gold Coast home.
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