Other ways to speed up a purchase

Guarantors, gifted deposits and deposit products, with the risks each one moves onto someone else.

Government schemes aren't the only way over the deposit hurdle. Around 40% of first home buyers get help from family in some form. These options are worth knowing, and each one shifts risk somewhere, usually onto a person who loves you.

A guarantor loan

A family member, almost always a parent, offers the equity in their own property as security for part of your loan. You avoid LMI and can buy with little or no deposit of your own.

What it needs: a family member who owns a property with enough equity, and a lender that offers guarantor loans.
What it costs them: if you can't pay, the lender can pursue the guaranteed portion against their home. This is not a formality.
How to reduce the risk: guarantee a limited amount rather than the whole loan, agree in writing when the guarantee is released, and have both sides take their own legal advice.

A gifted deposit

Money from family towards the deposit, with no expectation of repayment. It's simple, and it doesn't add debt. Lenders will ask for a signed gift declaration confirming it isn't a loan, and often want to see the money seasoned in your account for a few months. If it is really a loan, say so: an undisclosed loan is a misrepresentation to the lender and it also skews what you can afford.

Deposit products

A small market of lenders offers products that fund the deposit itself, so you can reach a 20% deposit and avoid LMI while paying only a small amount up front. You end up with two debts against the property rather than one, at different rates.

They suit people whose income comfortably supports the repayments but who haven't had time to save. Read the total cost over the life of both loans and compare it against simply paying LMI on a 90% loan, which is often cheaper than it looks.

Buying with someone else

Buying with a sibling, a friend or a partner you aren't married to multiplies your deposit and your borrowing power. Get a written co-ownership agreement covering what happens if one of you wants out, can't pay, or dies. Do it before you buy, while everyone is still reasonable.

Do this in HomePlannerScheme eligibility checker See which of these routes actually change your position, alongside the schemes you already qualify for.Free account required

Before you move on

You know whether family help is realistically on the table
If a guarantee is involved, everyone understands the risk and has had advice
You've compared the cost of avoiding LMI against simply paying it
Any co-ownership is written down before you buy