How much deposit a low doc home loan needs, what sets the LVR cap, when LMI applies and how to work out the total cash you need as a self-employed buyer.
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Low Doc Deposit · LVR Caps · Upfront Costs
A low doc home loan deposit is set by the LVR cap the lender puts on your file. Here is what moves that cap, when mortgage insurance applies and how to work out the cash you need.
Quick Answer
Most low doc home loans need a bigger deposit than a full doc loan, because the lender caps the loan at a lower share of the property's value and may not offer mortgage insurance above that cap. The cap on your file, its loan to value ratio limit, is set by your documents, credit file, ABN age, loan size, postcode and property type. Many self-employed buyers land at around 20% to 30% of the price, plus stamp duty and costs, though it varies by lender.
Also called: low doc home loan deposit, alt doc home loan deposit, self-employed home loan deposit. They ask the same question; alt doc is the term many lenders use for the same loan.
How much deposit do you need for a low doc home loan?
The deposit you need for a low doc home loan is the gap between the price and the most the lender will lend, and on low doc that ceiling usually sits lower than on a full doc loan. Put simply, the LVR cap sets the deposit. If a lender caps your file at 80% of the property's value, you bring the other 20% plus costs. If it caps you at 70%, you bring 30% plus costs.
Low doc lenders work with a lower LVR ceiling than full doc, with the exact ceiling set by each lender, because they rely on BAS, business bank statements or an accountant's declaration instead of two years of lodged tax returns. Deposits quoted online run anywhere from around 10% to 40% of the price. That range is accurate but not useful until you know which band your own file sits in, and that is what the rest of this insight works through.
If you are new to the terms, our alt doc home loan explainer covers what the loan is and who it suits, and the one doc home loan guide covers the single-document version. On a one doc home loan the same rule holds: the cap on your file decides the cash you bring to settlement.
What sets the maximum LVR on a low doc home loan?
The maximum LVR on a low doc home loan is set by how much risk the lender sees in your file: the documents you can give, your credit file, how long your ABN has been active and the size of the loan. What lenders actually look at first is the documentation type, because it tells them how much of your income they can verify.
- Documents. An accountant letter plus BAS that line up with your bank statements usually earns a higher cap than a self-declaration alone. The income documents guide covers which document fits your situation.
- Credit file. Defaults, late payments or a run of recent enquiries on your credit file can pull the cap down a band or move you to a specialist lender.
- ABN age. An ABN active for two years or more typically opens more options than one active for 12 months. The ABN age milestones post shows where those steps usually fall.
- Loan size. Larger loans often carry a lower cap, so the deposit share can rise as the price rises.
Files that keep the cap higher
- Accountant letter and BAS that match the bank statements
- Clean credit file, few recent enquiries
- ABN active for two years or more
- Standard house in a metro or large regional postcode
Files that pull the cap down
- Self-declaration with nothing to back it
- Recent defaults or arrears
- ABN under 12 months old
- Small unit, acreage or a higher-risk postcode
This is what the regulator expects. APRA's prudential practice guide APG 223 on residential mortgage lending treats high LVR lending and loans with less income verification as higher risk, and expects lenders to set limits on both. That is why caps step down as the documents get thinner, and why each lender draws its steps in a different place.
| File type | Typical documents | Typical LVR ceiling | Mortgage insurance |
|---|---|---|---|
| Lower-risk low doc file | Accountant letter or BAS backed by bank statements, clean credit, established ABN | Typically up to around 80% | Usually not needed at or under 80% |
| Standard low doc file | One document or a declaration with limited backing, shorter ABN history or minor credit marks | Often around 60% to 75% | Not offered at this tier by many lenders |
| Higher LVR with mortgage insurance | Strong low doc file that also meets the insurer's self-employed rules | Some lenders go to around 85% to 90% | Required, premium added to the loan or paid upfront; not available with every lender |
Treat the table as a map, not a quote: illustrative only, your lender's figure decides.
Can you get lenders mortgage insurance on a low doc loan above 80% LVR?
Lenders mortgage insurance on a low doc loan above 80% LVR is possible with some lenders, but the door is narrower than on full doc: mortgage insurance above the cap is not always available on low doc, and each lender draws that line differently. LMI protects the lender, not you, and the insurer applies its own rules for self-employed borrowers on top of the lender's policy.
Where it is offered, the insurer typically wants the cleaner version of a low doc file: an established ABN, a clear credit file and income evidence that holds together across BAS and bank statements. The premium is usually added to the loan or paid upfront, and it rises quickly as the LVR climbs. In deals I've seen, the real question is rarely whether LMI exists for the file. It is whether the premium is worth paying against waiting, saving more or finding another source for the deposit.
APG 223 is plain that mortgage insurance does not replace a lender's own assessment, so LMI never rescues a file that fails on serviceability. The lender still runs its full check first, and what lenders see in a one doc application sets out what that check covers.
How do postcode, property type and loan size change the deposit?
Postcode, property type and loan size can each lower the LVR cap on a low doc loan, which raises the deposit even when your income evidence is strong. The postcode can move the cap: many lenders keep internal lists of locations they treat as higher risk, such as small regional towns, areas tied to one industry and postcodes with a lot of new high-density stock, and they lend less against security there.
Property type works the same way. Apartments in large or high-density blocks, very small units, rural and acreage properties and unusual security often attract a lower cap. The hobby farm and acreage limits guide covers the land-size rules. The valuation matters too: the cap applies to the lower of the price and the valuation, so a short valuation adds straight to your deposit.
Loan size and purpose finish the picture. Larger loans can step down a band, and some lenders set a lower ceiling for investment loans than for a home you will live in, which the self-employed investment property guide works through. Where this commonly lands: the same file earns one cap on a house in a metro suburb and a lower one on an inner-city studio. The Sydney low doc lender options show how that plays out in one market.
What upfront costs sit on top of the deposit?
The upfront costs on top of a low doc deposit are stamp duty, any mortgage insurance you are not adding to the loan, the lender's fees and your legal costs, and together they can add a meaningful amount to the cash you need. Deposit plus costs is the cash you need, so budget for both before you sign a contract.
- Stamp duty and transfer fees. Each state and territory sets its own duty and any first home concessions. Your state revenue office's calculator gives the figure for your purchase; we do not quote it here because it changes with the price, the state and your eligibility.
- Mortgage insurance. Only above around 80% LVR, and only where the lender and insurer offer it on low doc.
- Lender costs. Valuation, application and settlement fees vary by lender. Some low doc lenders also charge a one-off fee that reflects the risk on the file, so ask for every fee in writing.
- Legal and conveyancing. Your conveyancer or solicitor's fee, searches and registration costs.
- A buffer. Moving costs, insurance from exchange and a margin in case the valuation comes in short.
In practice, the costs line is where self-employed buyers get caught. The deposit is the number everyone talks about, but stamp duty alone can be a large share of it in some states.
How do you work out the cash you need, step by step?
You work out the cash you need by finding the LVR cap for your file, applying it to the lower of the price and the valuation, and then adding every upfront cost on top. The steps below are the order a lender's numbers follow.
- Find your cap. Ask which LVR band your documents, credit file and ABN age put you in.
- Apply it to the lower figure. Use the price or the valuation, whichever is lower.
- Work out the deposit. Price minus the maximum loan.
- Add stamp duty. From your state revenue office's calculator.
- Add mortgage insurance if you are above around 80% LVR and paying it upfront.
- Add lender and legal costs, then a buffer.
| Line | At an 80% LVR cap | At a 70% LVR cap |
|---|---|---|
| Purchase price (valuation matches) | $700,000 | $700,000 |
| Maximum loan | $560,000 | $490,000 |
| Deposit | $140,000 | $210,000 |
| Mortgage insurance | Not needed at 80% | Not needed at 70% |
| Stamp duty and transfer fees | Your state's figure | Your state's figure |
| Lender, legal and buffer costs | Varies by lender and conveyancer | Varies by lender and conveyancer |
| Cash you need | $140,000 plus duty and costs | $210,000 plus duty and costs |
Illustrative only, your lender's figure decides. In our own files, the cleanest outcomes come from getting the cap confirmed at pre-approval, before an offer goes in.
Where can the deposit come from on a low doc loan?
A low doc deposit can come from your own savings, money from family, cash held in your business or equity in property you already own, and each source brings its own checks. The decision to make early is which source you will use, because the lender will want to see it and trace it, and some lenders want part of the deposit to be your own savings built up over time.
If family is helping, the gift or family loan deposit post covers how lenders treat that money. If the cash sits in your business, the business cash as a deposit post covers what has to happen before it can count. If you own property already, the equity path or deposit path post compares the two routes. First home buyers can start with the self-employed first home post, and if the pressure point is the deposit due at exchange rather than at settlement, the deposit bonds guide explains that option.
On a low doc home loan, the LVR cap sets the deposit. That cap is lower than full doc and moves with your documents, credit file, ABN age, loan size, postcode and property type. Mortgage insurance above 80% exists with some lenders but is narrower on low doc. Add stamp duty, lender fees and legal costs, and you have the cash you need. To see how a single-document file is assessed, start with the one doc home loan page, or browse the Business Owners Hub.
Key takeaway: confirm your file's LVR cap before you make an offer, then budget for deposit plus costs, not the deposit alone.Frequently Asked Questions
The deposit you need for a low doc loan is set by the maximum LVR the lender allows for your file, and that ceiling is typically lower than on a full doc loan. Many self-employed borrowers land at around 20% to 30% of the price, though it varies by lender. Stamp duty and costs come on top. The loan to value ratio entry explains how the cap is measured.
You can often use money held in your business as a home deposit, as long as the lender can see it is yours to take out and that taking it will not leave the business short. Expect to show business bank statements for the funds and, with some lenders, an accountant letter confirming the withdrawal. How the withdrawal is treated for tax is a question for your accountant before the money moves into the deposit for your low doc home loan.
Paying LMI on a low doc home loan with a 10% deposit only comes up if a lender will go to around 90% LVR on low doc at all, which is uncommon and varies by lender. Where it is offered, mortgage insurance is required and the insurer's self-employed rules apply on top of the lender's. The alt doc home loan explainer covers who these loans suit.
The deposit for an investment property on low doc is often higher than for a home you will live in, because some lenders set a lower LVR ceiling for investment loans. Others price the difference instead of capping it, so it varies by lender. The one doc investment property post covers how business owners approach it.
The deposit for a $700,000 house as a self-employed buyer depends on the LVR cap your file qualifies for. As an illustration only, an 80% cap means a deposit of around $140,000 and a 70% cap means around $210,000, before stamp duty and costs. The one doc home loan guide explains how a single-document file is assessed.
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