Saving a full 20% deposit in Perth’s current market can take years, and that’s before stamp duty and moving costs are even on the table. If you’re looking into low deposit home loans, the good news is you have more paths into a home than most people realise: a WA Government loan, an Australian Government guarantee, a family guarantor, or a standard loan with lenders mortgage insurance (LMI). Each one works differently, and the right fit depends on whether you’re a first home buyer, a single parent, or someone who’s simply ready to stop paying rent. At PPF Mortgage Brokers, we walk Perth buyers through exactly this decision every week, including buyers across Fremantle, Cottesloe, Melville and East Fremantle. Below, every option is laid out side by side so you can see what actually applies to you.
How Much Deposit Do You Actually Need to Buy in WA?
Twenty percent of the purchase price is still the benchmark most people think of first, because it’s the point at which lenders stop charging LMI on a standard loan. But 20% is a ceiling, not a rule. Depending on the path you take, that requirement can drop to 10%, 5%, 2%, or in some cases nothing at all if a family member is willing to act as guarantor.
The technical term lenders use for this is LVR, or loan-to-value ratio. A 90% LVR loan means you’re borrowing 90% of the property’s value, so your deposit covers the other 10%. As your deposit shrinks, your LVR climbs, and that’s what triggers extra requirements like LMI or a government guarantee to cover the gap.
As a brokerage with access to more than 40 lenders, PPF Mortgage Brokers can usually find at least one lender or scheme that fits, even when a single bank has said no to a standard 20% deposit product. That’s the practical difference between going straight to one lender and going through a broker who can compare your options across the whole market.
Government Schemes That Can Lower Your Deposit
Two government-backed options currently do the heaviest lifting for buyers with a smaller deposit.
The Australian Government 5% Deposit Scheme (formerly known as the Home Guarantee Scheme) lets first home buyers purchase with a minimum 5% deposit, or single parents and legal guardians with a minimum 2% deposit, without paying LMI. Since the Scheme expanded on 1 October 2025, there are no income caps and no waitlist, though there are still property price caps that vary depending on where in WA you’re buying. If you’d been told about the old Family Home Guarantee for single parents, that pathway now sits inside this same Scheme rather than as a separate program. You can’t apply to the Scheme directly, it has to go through a participating lender or a broker who works with one.
Keystart, the WA Government’s own low deposit lender, offers a Low Deposit Home Loan with a deposit of just 2% (or $2,000, whichever is higher) and no LMI, on established homes, new builds or modular homes. It’s limited to owner-occupiers, so it won’t suit anyone buying an investment property, and if you’re building new you can put your first home owner grant (FHOG) toward that deposit.
Speaking of which, the first home owner grant in WA is a one-off payment of $10,000, or the purchase price if that’s less, and it only applies to a new home you’re building or buying, not an established one. Because these schemes have different rules, price caps and eligibility windows, PPF Mortgage Brokers checks your situation against both the state and federal versions at the same time, rather than sending you down one path and hoping it fits.
The Deposit Minimums, Confirmed by the Scheme Itself
Worth seeing in the government’s own words rather than taking a broker’s summary of it.
“Minimum 5% deposit for first home buyers. Minimum 2% deposit for single parents.”
— Australian Government, First Home Buyers
Guarantor Home Loans: A Path to a Smaller (or No) Deposit
A guarantor home loan works differently to the schemes above. Instead of a government body guaranteeing part of your loan, a family member, usually a parent, offers equity in their own property as extra security. Depending on how much equity they can offer, this can reduce the deposit you need to a small amount or, in some cases, remove the need for a cash deposit altogether.
The trade-off is that the guarantor’s property is on the line too, not just yours. If repayments fall behind, the guarantor’s home is exposed, so it’s a decision that affects the whole family and deserves a proper conversation about the risks, not just the upside. A good broker will walk both the buyer and the guarantor through exactly what they’re signing up for before anyone commits.
Low Deposit Home Loans in WA: Comparing Your Options Side by Side
Most guides online cover these paths one at a time, which makes it hard to see how they actually stack up against each other. Here’s the comparison PPF Mortgage Brokers talks buyers through in real conversations.
| Path | Typical deposit | LMI | Best suited to |
|---|---|---|---|
| Keystart Low Deposit Home Loan | 2% (or $2,000, whichever is higher) | No | WA owner-occupiers buying established, new build or modular homes |
| Australian Government 5% Deposit Scheme | 5% (first home buyers) | No | First home buyers with no income cap issues |
| 5% Deposit Scheme, single parent/guardian path | 2% | No | Single parents or legal guardians (replaces the old Family Home Guarantee) |
| Standard loan, smaller deposit | Below 20% | Usually, once under 80% LVR | Buyers who don’t fit a scheme, or investors |
| Guarantor home loan | Reduced, sometimes 0% | Often avoided | Buyers with a family member able to guarantee part of the loan |
As WA’s Broker of the Year, PPF Mortgage Brokers has sat down with hundreds of Perth buyers to work through exactly this table against their own numbers, since the cheapest option on paper isn’t always the one that actually gets approved for your situation.
The Pros and Cons of Buying With a Smaller Deposit
Going in with a smaller deposit isn’t automatically the wrong move, but it isn’t free of trade-offs either.
The upside:
- You can stop paying rent and start building equity years sooner than if you waited to save 20%.
- Government schemes let you skip LMI entirely if you qualify, which can save you a meaningful amount upfront.
- You lock in a purchase price now, rather than waiting while the market moves.
The downside:
- A smaller deposit means a bigger loan, so you’ll pay more interest over the life of the loan than someone who put down 20%.
- If you’re not using a scheme, LMI is an added upfront cost that doesn’t build you any equity.
- Less deposit means less buffer if property values dip after you buy, and a guarantor loan puts a family member’s asset at risk, not just yours.
Buying With a Smaller Deposit in Fremantle, Cottesloe, Melville and East Fremantle
Most low deposit guides stop at “Perth” or “WA” as a whole, but the schemes above land differently depending on the suburb. Fremantle, Cottesloe, Melville and East Fremantle are established, tightly held pockets of the western suburbs, and entry prices generally sit above the WA-wide median, which is exactly where the property price caps on the Australian Government 5% Deposit Scheme start to matter most. A cap that comfortably covers a home in an outer-metro suburb can be tighter once you’re looking at Cottesloe or East Fremantle, so it’s worth checking the current cap for your specific target area before you fall in love with a property.
PPF Mortgage Brokers is a home loan broker Fremantle buyers already turn to, and we work just as often as the mortgage broker Cottesloe, mortgage broker Melville and mortgage broker East Fremantle locals call first. That means the conversation isn’t just “here’s how the scheme works” in the abstract, it’s about what a 2% or 5% deposit realistically buys in that particular pocket of Perth right now, and which lenders on our panel are actively approving loans there.
Common Questions
Do all low deposit loans in WA require Lenders Mortgage Insurance (LMI)?
No. Keystart’s Low Deposit Home Loan and the Australian Government 5% Deposit Scheme are both structured so eligible buyers avoid LMI altogether. Outside those schemes, most lenders will charge LMI once your deposit drops below 20% of the purchase price, since it protects the lender rather than you. A broker can tell you which of your specific options actually needs it before you commit to one.
Who is eligible for one of these smaller-deposit schemes in WA?
Eligibility depends on which path you take. Keystart and the Australian Government 5% Deposit Scheme are largely aimed at owner-occupiers, first home buyers, or single parents and legal guardians, and most schemes require you to live in the property rather than rent it out. If you don’t fit those categories, a standard loan with LMI or a guarantor loan is usually still available, though the cost and terms differ.
How do I apply for one of these options?
You can’t apply for the government schemes directly, they’re only accessed through a participating lender or a broker who works with one. The general process is an eligibility check, a conversation about which scheme or loan type actually suits your situation, then a full application submitted on your behalf. Because the schemes, LMI thresholds and guarantor rules all interact differently, most buyers find it faster to run this past a broker first rather than approaching a single bank.
Is going in with a smaller deposit a good idea, or should I keep saving?
It depends on your situation. If Perth property prices are moving faster than you can save, getting in sooner with a lower deposit can work out cheaper than waiting, but a smaller deposit means a bigger loan and more interest over time. It’s worth running the actual numbers with a broker rather than guessing, since the right path for a first home buyer in Cottesloe can look quite different to a single parent buying in Melville.
Conclusion
There’s no single “best” way into a home with a smaller deposit, only the option that fits your situation, whether that’s Keystart’s 2% loan, the Australian Government 5% Deposit Scheme, a guarantor, or a standard loan with LMI. What matters is working out which low deposit home loans you actually qualify for and what each one costs you over time, not just upfront.
This article is general information only and doesn’t take into account your personal financial situation, so it shouldn’t be relied on as financial advice. As WA’s Broker of the Year, PPF Mortgage Brokers has helped buyers across Perth, including Fremantle, Cottesloe, Melville and East Fremantle, work through this exact decision with access to more than 40 lenders. If you want to know which of these paths actually applies to you, get in touch with PPF Mortgage Brokers and we’ll talk it through.