By reducing the usual 20% deposit requirement and removing Lenders Mortgage Insurance costs, the loan aims to make property ownership more accessible, particularly for younger Australians.

The 10% deposit, no LMI deal is available across Neat and Flex lines, the latter coming with an offset account - applicants can borrow up to $2 million.

Both products have an advertised rate of 6.19% p.a. (6.21% p.a. comparison rate* for Neat; 6.43% p.a. for Flex). 

This is 75 basis points (0.75% p.a.) more expensive than the 80% LVR product, or roughly $300 a month on the average home loan size. 

It's also nearly a full percentage point higher than some of the most competitive variable-rate loan products in the market, according to Savings.com.au's database.

House hunters will need to weigh up the time taken to get into the market versus getting in sooner, yet potentially having their serviceability reduced owing to a higher interest rate.

Since the RBA cut rates in February 2025, national home values have risen 4.4%, adding $36,000 to the median price.

As a result, buyers seeking to avoid LMI now need a 20% deposit of $171,000, up from $164,000 in February.

Based on current lending rules, applicants earning around $125,000 on a PAYG basis and holding a deposit of $60,000 could be in a position to buy a home valued at roughly $450,000.

Ray Jokhan, Ubank's Chief Home Lending Officer, said that while low-deposit loans aren't suitable for everyone, they can provide buyers with an earlier path to building equity.

"We've already seen customers buy sooner with our existing 15% deposit product, using it as a stepping stone to their first home. As they build equity and their loan-to-value ratio drops below 80%, they become eligible for better rates - and we regularly review those with them," Mr Jokhan said.

How Ubank's 10% deposit compares to the government's 5% Deposit Scheme

While the Australian Government 5% deposit scheme also aims to support buyers with lower upfront costs, it comes with property price caps that limit eligibility.

The property price cap in NSW (capital city and regional centres), for example, is at $1.5 million. Meanwhile, the loan cap for Ubank's low-deposit home loan is at $2 million.

Strong demand for the federal 5% Deposit Scheme has also reportedly led to delays in pre-approval, with some buyers facing longer waiting times before securing finance. By contrast, Ubank says its home loan can be approved within hours, offering a faster route for eligible buyers to enter the property market.

The 5% deposit scheme also generally requires applicants to use all of their savings; so, having more than 20% saved up might not satisfy Housing Australia.

Low-deposit opportunities across key suburbs

Joint research with property insights firm Cotality has highlighted 32 metro suburbs where homebuyers can access the market with relatively low deposits, under 25 kilometres of major city CBDs.

Of these, 30 suburbs have 10% deposit requirements below $100,000, including Harris Park, 19 km from Sydney's CBD, where the median unit deposit sits just under $50,000, and Coolaroo, 17 km from Melbourne's CBD, with a 10% deposit of $61,000 for a typical dwelling.

The research also showed how a 10% home loan with no LMI could reduce upfront costs by up to $175,000 compared with a standard 20% deposit, varying by suburb.

State

Suburb

City Name

Median value

Deposit Difference

10% deposit

20% deposit

NSW

Sydenham

Greater Sydney

$1,750,000

$175,000

$175,000

$350,000

VIC

Maidstone

Greater Melbourne

$865,000

$86,000

$87,000

$173,000

QLD

Rocklea 

Greater Brisbane

$796,000

$79,000

$80,000

$159,000

ACT

Scullin

Australian Capital Territory

$859,000

$86,000

$86,000

$172,000

WA

Westminster

Greater Perth

$715,000

$72,000

$71,000

$143,000

SA

Lightsview

Greater Adelaide

$793,000

$80,000

$79,000

$159,000

NT

Berrimah

Greater Darwin

$515,000

$51,000

$52,000

$103,000

TAS

Clarendon Vale

Greater Hobart

$489,000

$49,000

$49,000

$98,000