A 20% deposit isn't always necessary when you're buying property as a dentist.
Lenders recognise the career stability and earning trajectory of dental professionals, and several paths exist to purchase with a reduced deposit or none at all. The approach depends on your individual circumstances, career stage, and whether you're buying an owner-occupied home or an investment property.
No deposit home loans using a guarantor
A family guarantee allows you to purchase property without a cash deposit by using the equity in a parent's or family member's property as security. The lender takes a limited guarantee over a portion of the guarantor's property to cover the shortfall between your deposit and the 20% threshold, removing the need for LMI.
Consider a general dentist earning $140,000 per year who wants to purchase an apartment at the current median in a regional centre. Rather than waiting another year to save a full deposit, the dentist's parents offer equity in their unencumbered home to act as security for the shortfall. The lender structures the loan with a primary mortgage over the purchased property and a limited guarantee over the parents' home for the amount required to reach 20% LVR. Once the dentist builds sufficient equity through repayments and property value growth, the guarantee can be released, typically within two to five years depending on repayment behaviour and market conditions.
The guarantor does not make repayments and is not liable unless the borrower defaults. Most lenders require the guarantor to obtain independent legal advice before the guarantee is executed. The arrangement works when the guarantor has sufficient unencumbered equity and understands the responsibilities involved. Guarantor loans can also be structured with multiple guarantors if a single property does not hold enough equity.
LMI waivers for dental professionals
Some lenders offer LMI waivers for dentists based on professional occupation rather than deposit size. These arrangements allow borrowing at LVRs of 85% to 90% without paying the insurance premium that would typically apply at those ratios.
A dentist purchasing with a 10% deposit through an LMI waiver avoids a premium that could otherwise range from $8,000 to $25,000 depending on the loan amount and LVR. The waiver is not automatic and depends on the lender's assessment of your income stability, employment history, and credit position. Most lenders offering this concession require full-time or near full-time employment as a registered dentist and will not extend the waiver to contractors or locum-only practitioners without additional assessment.
Not all lenders participate in professional LMI waiver programs, and those that do typically reserve them for owner-occupied purchases rather than investment loans. The waiver also does not extend the maximum LVR beyond each lender's policy settings, which remain subject to APRA's prudential framework.
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The Australian Government 5% Deposit Scheme for dentists
The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a deposit of as little as 5% of the property value, with Housing Australia providing a guarantee to the lender for up to 15% of the property value. This brings the combined deposit and guarantee to 20%, removing the requirement for LMI.
No income caps apply under the scheme, making it accessible to dentists at all income levels. Applications are made through participating lenders and cannot be lodged directly with Housing Australia. Property price caps vary by state and location. In Queensland, the cap is $1,000,000 in capital cities and regional centres including the Gold Coast and Sunshine Coast, and $700,000 in other areas. Both the purchase price and the lender's assessed valuation must fall within the applicable cap.
The scheme applies to both new and established homes and can be used for houses, apartments, and townhouses. You must be purchasing as an owner-occupier and intend to live in the property as your principal place of residence. Fixed rate, variable rate, and split loan structures may be available depending on the participating lender. The scheme cannot be combined with Help to Buy, but state and territory grants and stamp duty concessions can generally be used alongside it depending on the jurisdiction.
Genuine savings and non-genuine savings
Lenders distinguish between genuine savings, which is money you have saved over time, and non-genuine savings, which includes gifted funds, inheritances, tax refunds, and bonuses. Most lenders require at least 5% genuine savings when lending above 90% LVR, though this requirement varies between institutions.
A dentist who has received a signing bonus or relocation payment as part of an employment contract may find that those funds are treated as non-genuine savings by some lenders, requiring an additional amount in genuine savings to meet serviceability criteria. Other lenders take a more flexible view and assess the source of funds in the context of the borrower's overall financial position and employment stability.
Gifted deposits from parents or family members are generally acceptable to most lenders, though a statutory declaration confirming the funds are a gift and not a loan is required. The distinction matters because a loan from family would be treated as an additional liability and reduce your borrowing capacity, whereas a gift does not.
Equity from an existing property
If you already own property, you can use the equity in that property as a deposit for your next purchase without needing additional cash savings. This approach is common among dentists expanding their property portfolio or upgrading from a first home to a larger residence.
Equity is calculated as the current market value of your property minus the outstanding loan balance. If your property is valued at $650,000 and your loan balance is $400,000, you have $250,000 in equity. Lenders will allow you to borrow against a portion of that equity, typically up to 80% of the property's value without incurring LMI, though higher LVRs are possible in some cases.
Using equity removes the need to save a separate cash deposit, but it does increase your overall debt position and the repayments you'll need to service. A serviceability assessment is still required, and lenders apply the 3.0 percentage point buffer above the loan product rate when calculating your capacity to service both the existing and new loan.
Combining a small deposit with Help to Buy
The Help to Buy scheme allows eligible buyers to purchase with a minimum 2% deposit, with the Australian Government contributing up to 40% of the purchase price for a new home and up to 30% for an existing home in exchange for a proportional equity stake.
From 1 July 2026, income limits are $103,000 for individual applicants and $165,000 for joint applicants or single parents. Property price caps vary by location and are confirmed using the postcode search tool at firsthomebuyers.gov.au. Tasmania joined the scheme from 9 June 2026, completing national coverage across all states and territories.
Applications are made through participating lenders. The scheme is available only to first home buyers and cannot be combined with the Australian Government 5% Deposit Scheme. State and territory grants and stamp duty concessions can generally be used alongside Help to Buy, though restrictions vary by jurisdiction.
The government's equity share does not require repayments or interest, but it does mean you own a proportional share of the property rather than the full title. When you sell or refinance, the government receives its proportional share of the sale proceeds or valuation at that time, whether the property has increased or decreased in value.
When a low deposit loan doesn't suit your situation
A low deposit loan or no deposit structure is not always the right choice, even when it's available. Borrowing at a higher LVR increases your repayments, reduces the equity buffer you have if property values decline, and may limit your ability to refinance or access equity in the short term.
If you're in the early stages of your career with variable income from locum work or a mix of public and private hours, some lenders may apply a more conservative assessment to your serviceability. In that scenario, a larger deposit can improve your borrowing capacity by reducing the loan amount and demonstrating financial discipline over time.
The decision also depends on your intended holding period. If you plan to sell within two to three years, starting with a higher LVR can leave you with limited equity after selling costs and any decline in market conditions. If you're purchasing a long-term home or an investment property with a 10-year-plus horizon, a low deposit structure can allow you to enter the market sooner and benefit from capital growth and loan reduction over time.
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Frequently Asked Questions
Can dentists get a home loan without a deposit?
Yes, dentists can access no deposit home loans through a family guarantee, where equity in a parent's or family member's property is used as security for the shortfall. Some lenders also offer LMI waivers for dental professionals at LVRs of 85% to 90%, reducing the deposit requirement to 10% or 15% without paying lenders mortgage insurance.
What is the Australian Government 5% Deposit Scheme for dentists?
The Australian Government 5% Deposit Scheme allows eligible first home buyers, including dentists, to purchase with a 5% deposit. Housing Australia provides a guarantee of up to 15% of the property value to the lender, removing the need for LMI. No income caps apply, but property price caps vary by state and location.
Do lenders require genuine savings for low deposit home loans?
Most lenders require at least 5% genuine savings when lending above 90% LVR. Genuine savings includes money saved over time, while gifted funds, bonuses, and inheritances are treated as non-genuine savings. Some lenders are more flexible and assess the source of funds in the context of the borrower's overall financial position and employment stability.
Can I use equity from an existing property instead of a cash deposit?
Yes, you can use the equity in an existing property as a deposit for your next purchase without needing additional cash savings. Lenders typically allow you to borrow against up to 80% of the property's value without incurring LMI. A serviceability assessment is still required to ensure you can service both the existing and new loan.
When is a low deposit home loan not the right choice?
A low deposit loan may not suit your situation if you have variable income, plan to sell within two to three years, or want to maintain a larger equity buffer. Borrowing at a higher LVR increases repayments and reduces flexibility to refinance or access equity in the short term. A larger deposit can improve borrowing capacity and demonstrate financial discipline, particularly if you're early in your career.
