You’ve most likely heard the rule: Save for a 20-percent deposit before you buy a home. The logic behind saving 20 percent is solid, as it shows that you have the financial discipline and stability to save for a long-term goal. It also helps you get favorable rates from lenders.

But there can actually different options rather than parting with so much cash up front, even if you have the money available. Here are some options to consider.

1. GUARANTOR LOANS

Also known as a family pledge or guarantor home loan, it is a type of mortgage that allows you to borrow more money and provide less of a deposit.  It allows you to provide your deposit (or no deposit), and your guarantorputs forward an agreed portion of their property as security, allowing you to go into the loan with a larger deposit, and if your deposit is 20% or above, avoid Lender's Mortgage Insurance (LMI). 

2. EQUITY IN ANOTHER PROPERTY

Do you already own a property? If so, you can use your existing equity as a deposit. If if you have sufficient equity. Your home’s equity is the difference between your current property’s market value and the balance of your mortgage. If you’ve owned your own home for a few years, there’s a good chance you’ve already built up a reasonable amount of equity and you can use this to purchase your investment property. Learn more.

3. USE YOUR SUPPERANNUATION

It must be said upfront, that this is a complex strategy that requires financial advice before you begin. But if you have over $150,000 in supperannuation, you can set up a self-managed superannuation fund (SMSF) to buy a property. The property can be residential or commercial and must be for investment purposes, not to occupy and you can borrow up to 80%. This method allows you to use your superannuation as a deposit. 

There are a number of rules that you must comply with under this stratgey and it is important to get the right advice before your proceed. Some of these rules include:

• Must meet the 'sole purpose test' of solely providing retirement benefits to fund members
• Must not be acquired from a related party of a member
• Must not be lived in by a fund member or any fund members' related parties
• Must not be rented by a fund member or any fund members' related parties.
• However, your SMSF could potentially purchase your business premises, allowing you to pay rent directly to your SMSF at the market rate.

(Reference: ASIC's moneysmart website).

Have a preliminary discussion with amortgage broker about buying property in a SMSF.

4. FIRST HOME OWNERS GRANTS AND OTHER GOVERNMENT SUBSIDIES

There are a range of federal and state government initiatives that make it easier to buy property with a limited deposit. These include theFirst Home Owners Grant (FHOG), other government subsidies and a range of new discounted 100% home loans, it’s easier than ever to buy your first home without a deposit.

You should also find out if the first home super saver scheme can help you save for a home. This is a new initiative announced in the Federal Budget in May 2017 that allows first home buyers to save for a home deposit within their super fund. 

In the May 2017 Federal budget, the Government proposed a new scheme that will allow first home buyers to save a home deposit within their super fund.

Under the scheme, first home buyers can make voluntary super contributions with these concessional contributions and earningsbeing taxed at marginal tax rates with a tax offset of 30%. More information is available on the Government's budget website.