Many mortgage lenders will lend up to 90-95% of the property value. The difference is made up by the borrower paying a deposit.

For example, if your new unit costs $100,000 your lender might agree to lend you $95,000 (95%), while you will have to put in a deposit of $5000.

However, if you are eager to purchase a property yet have no money saved there are some lenders that offer 100 per cent mortgages. There are a number of lenders which will also accept a percentage of 3rd parties home equity in exchange for a deposit usually required by the applicant.

Major Pro

• A 100 per cent mortgage will help you get on the property ladder if you do not have a deposit saved.

Major Cons

• A premium is usually charged on a 100 per cent mortgage, so you will not be getting the best deal available.
• May lead to negative equity (your mortgage amount is larger than the value of your home) if property prices decrease.
  

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