With the rapid increase in home prices across Australia, the idea of submitting a large deposit on a home may not be within the reach of the average homeowner. Many Australians are however submitting larger deposits in the housing market so that they can get a bit of a break on their mortgage.

The number of home loans that are issued with less than 20% deposit has been dropping considerably. With the flurry of traffic inside the Australian home market, lenders are often searching for premium clients who are willing to pay at least 20% deposit or more to secure their loan. Only 21% of home loans issued in the year 2016 were delivered with less than 80% of the loan value to ratio. Only around 8% of home loans had 10% or less for a deposit.

With so many well-funded investors that are snatching up homes across Australia, it’s becoming very difficult for first-time home buyers to enter into the market with a deposit under 20%. Notes for banks have tightened up their investor lending and this means that many first-time home buyers may want to save for a few more years before they enter into the housing market. If you approach a traditional lender with less than 20%, your rates can instantly go up and the overall chance of getting your loan can go down.

There are however some places where you can still find a loan at a reasonable interest rate and without having the stress of coming up with such a large deposit. It’s taking Australians an average of 3 to 4 years to save up a deposit on a home even with favorable savings interest rates.

The truth is that you can get a mortgage with a deposit under 20% but in the current real estate market in Australia, the chances of you getting a premium rate on your mortgage or getting approved decreases.