Who Qualifies for a 2% Deposit Home Loan

Basic Borrower Requirements

To qualify for a 2% deposit home loan you must be over 18, an Australian tax resident, with 5% genuine savings. Australian or NZ citizens, permanent residents, and approved visa holders are eligible. Joint applicants must be in a spousal relationship.

The 2% deposit home loan is available to individuals who meet the following fundamental criteria:

• Natural person: only individuals can apply. Companies, trusts, and self-managed super funds are not eligible for this product.
• Over 18 years of age at the time of application.
• Beneficial interest: you must have a beneficial interest in the loan (you are borrowing for your own benefit, not on behalf of someone else).
• Australian tax resident: you must be a tax resident of Australia for the purposes of the ATO.
• No guarantor: guarantor arrangements are not accepted. The split loan structure with the upfront rate reduction fee replaces the need for a guarantor.

Citizenship and Visa Requirements

Primary Borrower

The primary borrower must be one of the following:

• Australian citizen
• New Zealand citizen
• Holder of an approved permanent residency visa
• Holder of an approved temporary visa (an approved visa list applies)

An approved visa list covers specific permanent and temporary visa subclasses. We do not publish the specific subclass numbers. If you hold a visa and want to check whether it is on the approved list, contact us to confirm your eligibility.

Some temporary visa holders or Australian expats may attract interest rate loadings and additional fees. These situations are assessed on a case-by-case basis.

Secondary Borrower (Joint Applicants)

Joint applicants must be in a spousal relationship (married or de facto). The secondary borrower must be an Australian or New Zealand citizen, or an approved visa holder. If the secondary borrower is on a temporary visa, they must not be the primary source of income for the application.

Genuine Savings Requirements

You must demonstrate 5% of the purchase price in genuine savings, even though the minimum deposit is only 2%. Genuine savings can include:

• Regular savings accumulated over time in your bank accounts
• Lump sums such as bonuses, tax refunds, and proceeds from asset sales
• First Home Owner Grants (which can count toward the 5% requirement)

What If I Do Not Have 5% Genuine Savings?

If your genuine savings are below 5%, a satisfactory rental payment history can be accepted as a mitigant. The requirements are:

• Minimum 3 months of continuous rental payments
• All payments up to date with no late payments greater than 7 days
• Evidenced by a lease and tenancy ledger, or bank statements showing the rental payments

This alternative is designed for borrowers who can demonstrate a strong ability to save through their consistent rental payment history, even if their savings balance is below the 5% threshold.

Identification and Verification

You must provide any two of the following forms of identification:

• Valid passport
• Driver licence
• Government-issued proof of age card

Biometric verification is also required as part of the identity check process. All identification must be current and valid at the time of application.

Existing Property Holdings

At the time of application, you may have at most one existing mortgaged property, and that property must be owner occupied. This means:

• If you own your home with a mortgage, you can apply for a 2% deposit loan (for either another owner-occupied property or an investment).
• If you own an investment property with a mortgage, you are not eligible.
• If you own no property, you are eligible (subject to all other criteria).

Single security per application. No cross-collateralisation is permitted.

Debt Consolidation Eligibility

Refinancing for debt consolidation is available under the 2% deposit product. Up to four personal debts (such as personal loans, credit cards, and car loans) can be consolidated. More than four requires an exception. Conditions include:

• Monthly repayments must reduce overall after consolidation
• The most recent 3 months on each debt must be clear of arrears, default interest, and dishonours

Back to 2% Deposit Home Loans hub. See also: income requirements, acceptable properties, rates and fees.