The more you can put towards a deposit, the less you’ll need to borrow and the more you’ll save in interest over the years. Generally you will need a minimum of 5% deposit plus costs like Stamp Duty, moving etc. To avoid paying Lenders Mortgage Insurance (LMI), you will need at least 20% deposit unless you have a family equity guarantors.
The Family equity guarantor product is only offered by a few lenders and allows someone else to provide additional security, in lieu of a full deposit. In some cases you can even achieve a no deposit home loan scenario. Parents can raise the deposit against their own home to help their children out, however the parents are 100% responsible for the loan and its only their name on the loan. A better option is for parents to provide the family equity guarantee against the equity in their own property, to reduce the LVR to avoid the cost of Lenders Mortgage Insurance.
Full information on this is available at financeprofessionals.com.au/family-pledge-loans
Deposit bonds are a good alternative to using cash or finding short term finance. They are quick to organise and economical compared to the cost of short-term finance. A deposit bond is a guarantee or bond that substitutes for a cash deposit of up to 10%. The guarantee terminates at settlement when the purchaser pays the full purchase price of the property, or when the contract is terminated, or at the expiry date of the bond.