Videos online make it look simple: buy Australian property with nothing out of pocket and watch the equity grow. The reality is different. In Australia, buying an investment property with literally zero cash upfront isn’t straightforward the way it is in the US. But there are strategies that get close — close enough that many investors are using them right now. The key is knowing which path fits your situation and what the hidden costs actually look like.
Disclosure: Some links on this page are affiliate links. If you make a purchase through them, Britwealth may earn a commission at no extra cost to you. We only include products and services that are relevant to the topic.
This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
That $110,000 figure is what stops most would-be investors after their first property. Saving a full 20% deposit plus stamp duty, legal fees, and inspections takes years — and prices often rise faster than savings can keep up. The strategies in this article don’t eliminate those costs entirely, but they shift where the money comes from. Here’s what you actually need to know.
Before going further, let’s pin down the central concept. Equity is the difference between what your property is worth and what you still owe on the mortgage. If your home is valued at $800,000 and your loan balance is $400,000, you have $400,000 in equity — though lenders typically let you access only the amount above 80% LVR, which in this case would be $240,000. That’s real money you can put toward your next purchase without dipping into savings. What I tend to notice is that people who already own a home often sit on this equity without realising it can do the heavy lifting for their next deal. For a deeper look at how this works in practice, check out our guide on using home equity to fund real estate investments.
What “No Money Down” Actually Costs: Fees, LMI, and the Real Upfront Figure
The phrase “no money down” creates an expectation of zero cost. That’s not how it works in Australia. Every strategy still involves money changing hands — the difference is where that money comes from. For a traditional investment purchase on a $450,000 property, you’d need roughly $90,000 for a 20% deposit plus another $20,000 for stamp duty, conveyancing, and building inspections. That’s $110,000 out of pocket before you own a single brick.
Compare that to using equity. If you already own a home worth $800,000 with a $400,000 mortgage, a lender may let you access $240,000 in usable equity at 80% LVR. That covers your deposit and fees on a second property without touching your bank account. The trade-off? You’re borrowing more overall, and if the new loan pushes past 80% LVR, you’ll pay Lenders Mortgage Insurance (LMI).
Here’s how the main strategies stack up on costs and cash required:
→ Scroll right to see all columns
| Strategy | Cash Deposit Needed | LMI Required? | Best For |
|---|---|---|---|
| Equity release | $0 (uses existing equity) | Yes if over 80% LVR | Existing homeowners with equity |
| Guarantor loan | $0 | No | High earners with family support |
| Rentvesting (90% LVR) | ~10% of purchase price | Yes | Young professionals in expensive cities |
| Joint venture | Varies (shared) | Depends on structure | Partnered investors pooling funds |
| Help to Buy (govt scheme) | 2% | No | First home buyers (owner-occupier only) |
The rentvesting route is worth a closer look. You live in a high-cost city like Sydney or Melbourne while buying an investment property in a more affordable regional market. With a 90% LVR loan, you put down about 10% plus LMI. For a $600,000 property, that’s $60,000 plus roughly $10,200 in LMI — still a chunk of cash, but far less than the $110,000 traditional route. And if you’re already in the market, equity release can reduce that to zero. Worth weighing against the fact that LMI adds thousands and higher LVRs often mean slightly higher interest rates. If you’re unsure about the legal side of structuring these loans, getting a quick opinion from a property law specialist can save you from costly mistakes.
Where Investors Get Tripped Up: Four Common Misunderstandings
Thinking “no money down” means zero cost
The biggest trap is believing you can buy an investment property with literally nothing. Even with equity release, you’re still paying stamp duty, legal fees, and potentially LMI. On a $600,000 property in New South Wales, stamp duty alone runs about $22,000. That money has to come from somewhere — usually the equity you’re borrowing against. You’re not avoiding costs; you’re shifting them onto a different part of your balance sheet. What I tend to notice is that people focus on the deposit and forget the $20,000–$30,000 in surrounding fees, which can leave them short at settlement.
Assuming government schemes work for investors
Programs like the federal Help to Buy scheme, which launched in December 2025, are designed for owner-occupiers. The government contributes up to 40% of the purchase price for a new home or 30% for an existing home, and you can buy with as little as a 2% deposit. But you must live in the property. Income caps are $100,000 for individuals and $160,000 for couples. There are 10,000 places per year, and as of early 2026, over 2,300 had been approved. None of that helps if you’re looking for an investment property. Some state-level concessions, like reduced stamp duty on new construction, may apply regardless of occupancy intent — but those are the exception, not the rule.
Overlooking the guarantor’s exposure
A guarantor loan lets you borrow 100% of the purchase price using a family member’s property as security. For a $600,000 purchase, the guarantee typically covers the gap up to 80% LVR — about $120,000. That’s a significant risk for the guarantor. If you default, they’re on the hook. Their borrowing capacity is also reduced while the guarantee is in place, which can affect their own plans. The guarantee usually lasts until your loan falls below 80% LVR, which could take years. Before going this route, both parties should get independent legal advice and have a clear repayment timeline.
Not accounting for serviceability on multiple loans
Lenders don’t just look at your deposit. They assess whether you can service the debt on both your existing mortgage and the new investment loan. The Australian Prudential Regulation Authority (APRA) oversees lending standards, and recent criteria have tightened. Even if you have plenty of equity, a lender may say no if your income doesn’t cover the repayments at a higher interest rate buffer — typically 3 percentage points above the current rate. This is where understanding how interest rate changes affect borrowing power becomes critical. A mortgage broker can help you run the numbers before you apply.
Four Ways to Buy Australian Investment Property With Minimal Cash
Using equity from your existing property
This is the most common path for existing homeowners. You refinance your current home to access the equity above 80% LVR. Say your property is worth $800,000 and you owe $400,000. At 80% LVR, the lender lets you borrow up to $640,000 against it. Your current loan is $400,000, so you have $240,000 in usable equity. That can cover the deposit and fees on an investment property. You’ll need to arrange same-day settlement or drawdown of both loans to minimise interest costs. Once formally approved, you can use a deposit bond instead of paying a cash deposit upfront. The risk is that you’re leveraging your home — if the investment property loses value or you struggle with repayments, your primary residence is on the line.
Getting a guarantor loan
If you don’t own property yet but have a family member who does, a guarantor loan can get you in with zero cash deposit. The guarantor’s property secures the portion of the loan above your deposit — typically the gap to 80% LVR. You won’t pay LMI because the lender’s risk is covered. The guarantor must usually be a direct family member, own property with sufficient equity, and receive independent legal advice. You still need to meet serviceability requirements on your own income. The guarantee typically lasts until the loan falls below 80% LVR, which you can accelerate by making extra payments or adding value through renovations. For a detailed look at how this compares to other entry strategies, read our article on regional Australia versus city property investment.
Rentvesting with a 90% LVR loan
Rentvesting lets you live where you want — usually a high-cost city for work or lifestyle — while buying an investment property in a more affordable market. Investment loans at 90% LVR are available, meaning you need about a 10% deposit plus LMI. For a $400,000 property, that’s roughly $40,000 plus $6,800 in LMI. The LMI can be capitalised into the loan, so you don’t need to pay it upfront. The strategy works best for young professionals with solid incomes who can’t afford to buy where they live but want to get on the property ladder. The downside is that you’re paying rent where you live and a mortgage on the investment property, which can stretch your cash flow. Negative gearing may help at tax time, but that’s a conversation with your accountant.
Joint ventures and co-investment
Pooling resources with a partner, friend, or other investor lets you enter the market sooner than going solo. You buy as tenants in common, meaning each person owns a specific share of the property — recommended for investments because it keeps ownership flexible. Before signing anything, document exit triggers, valuation methods, mortgage servicing plans, and decision-making processes. If one person stops paying, all owners remain responsible for the entire debt. A written partnership agreement is essential. This route works well for people who have income but not enough savings for a full deposit on their own. If you’re considering this structure, it’s worth checking the legal implications with a specialist before committing.
Frequently Asked Questions
Can I really buy an investment property with zero cash in Australia? ▾
What’s the minimum deposit for an investment property in Australia? ▾
Does the Help to Buy scheme work for investors? ▾
How long does a family guarantee typically last? ▾
What happens if property values drop when I’ve used equity? ▾
Can a non-resident or expat use these strategies? ▾
Where the Australian Market Is Heading for Low-Deposit Investors
Alternative financing methods are gaining ground. The Reserve Bank of Australia has predicted that up to 30% of property transactions could involve crowdfunding, peer-to-peer lending, or other creative financing by 2025. Regional markets are also seeing rising demand, which opens up lower-entry-cost opportunities for rentvestors. None of this means the risks disappear — leverage amplifies losses as easily as gains. But for investors who understand the full cost picture and choose a strategy that matches their situation, the barrier to entry is lower than the traditional 20% deposit path suggests.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read How to Get Started With Real Estate Crowdfunding in Australia.
Sources and Further Reading
How to Use Home Equity to Fund Real Estate Investments in Australia — A practical walkthrough of accessing equity, refinancing, and structuring the loan for your next purchase.
Regional Australia vs the City: Where’s the Smartest Property Investment? — Compares rental yields, growth rates, and entry costs across metro and regional markets.
Property Investment Professionals (2026). How to Buy an Investment Property With No Money Down Australia 2026. 🔗
Search Property (2023). How to Buy Real Estate With No Money Down — Australian Property Market. 🔗
RealEstateCalc (2026). Help to Buy Scheme 2026 Guide. 🔗
Deposit Power. 4 Ways to Buy Property With No Cash Deposit. 🔗
