No deposit home loans

A few years ago, many of us would have had a light chuckle to ourselves if someone mentioned that you could borrow money to buy a house with only the promise of solid future earnings. But today this is a regular occurrence. Many of the industry's non-conforming lenders are selling these financial products to many happy consumers, with most of the major banks avoiding this riskier route.

Ideally, the individuals set to gain from this product have high incomes in industries with high job security. With this loan you are presuming that the benefits of immediate ownership and debt outweigh the costs of renting. This may not always be the case however. The risk to the lender is greater and so you will pay a premium interest rate for the privilege, usually about 2% higher than the current market rate.

With this is mind, it may be time to clean the dust of the old mortgage calculator and assess the long term financial gain or speak to a financial consultant to establish whether this is a sound option for you, and for many people it can be.

Of course, there is no such thing as a free lunch and strictly speaking, no deposit means "with enough money to cover initial expenses" such as stamp duty, loan fees and mortgage insurance. If you are lucky enough to be eligible for a government first home buyers' grant, you may have most of these expenses paid for you.