Compare 90% LVR home loans
Compare the top rated home loans from the Online Partners on Canstar’s database that accept an LVR of 90% and are designed for owner-occupiers making principal and interest repayments.
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Home Loans
About 90% LVR home loans
What is a 90% LVR home loan?
A 90% LVR home loan is one where the loan-to-value ratio (LVR) is 90% – that is, the buyer has a 10% deposit and will borrow 90% of the price of the home. For example, if you wanted to buy a home worth $700,000, you would have to save a deposit of $70,000 (10%) and borrow the rest – $630,000 (or 90%) – in the form of a home loan.
Many lenders offer mortgages at 90% LVR. You can use the table at the top of this page to compare home loans that offer up to 90% LVR (from our online partners, which include a link to the provider’s website). You can change the filters to suit your needs.
What type of property can I buy with a 90% LVR home loan?
Technically, you could buy any property with a 10% deposit. When you apply for a loan, the lender is required by law to assess your application against what you’re assumed to be able to afford to repay.
Whether or not you can get a mortgage to buy a certain property with a 10% deposit will depend on this, as well as on a range of other factors, the main one being your chosen lender’s policy around loan-to-value ratios. (See the pros and cons section below for more detail.)
This could be a different story if you’re buying the property as an investment, where you could use equity from another property as collateral on a 90% LVR investment loan.
It’s good to keep in mind that if you’re a first home buyer, there could be government assistance to help you enter the market, such as First Home Owner Grants and the First Home Guarantee.
Pros and cons of a 90% LVR home loan
As with any big financial decision, it’s a good idea to weigh up the pros and cons. Some of them are listed below. You might also consider obtaining suitably qualified advice.
What are the potential benefits of a 90% LVR home loan?
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Buying a property sooner
If you have your eye on a property, and can raise a 10% deposit, taking on a 90% LVR loan may mean you can get onto the property ladder sooner. (But keep in mind that you may have to pay extra fees and a lower deposit means more to pay back in the long run).
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Loan repayments may be lower than rent
In some cases, it might be that loan repayments could be lower than rent. (Keep in mind that rent is typically fixed, while a home loan rate could change. There are also other costs involved in owning a home.) Plus, you wouldn’t be paying off someone else’s investment.
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Building up equity
When you take on a home loan, and pay the balance, you build up equity in your home. This means that you may potentially be able to borrow against that equity.
What are the potential disadvantages of a 90% LVR home loan?
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Considered a higher risk
Low-deposit mortgages, such as a 90% home loan, are typically considered by lenders as higher risk than loans with a higher deposit. This is because the bank is putting more of its money into the purchase and, if you default on the loan, the lender would have to take action to recover its loss in income (your repayments). This could mean repossessing the property and selling it.
So, applicants with a lower deposit may have to pass stricter loan conditions than borrowers with more money to contribute as a deposit. You may have to have a very good credit score, plus be able to show stable future income and to demonstrate that you can stick to a budget. You may also have to prove that the deposit is from ‘genuine savings’.
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Loan could cost you extra – fees, interest and repayments
As you’re only contributing 10% of the property’s price, this will mean your repayments are likely to be higher than the average borrower, and you’re likely to pay more interest over the life of the loan.
The lender may also impose extra conditions and fees, or even apply a higher interest rate to these kinds of low-deposit loans. For example, you may be required to pay Lenders Mortgage Insurance (LMI), which protects the lender (not you) if you can’t pay your loan back.
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Higher risk of negative equity
As you are only paying a 10% deposit, there is a higher risk that you could go into negative equity, which means that you owe more money on the home than what you would recoup if you sold it.
The market would only have to drop by 10% for you to hit negative equity at the beginning of your loan term, before you had a chance to pay off any of the principal. If you did have to sell, and the property market had slipped back by more than you owed, you could end up having no home but still having some debt to pay back to the lender.
Frequently Asked Questions about 90% LVR home loans
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About the authors
Nina Rinella, Editor-in-Chief
Joshua Sale, Group Manager, Research & Ratings
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Important information
For those that love the detail
This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.
