Australian fintech Reaia has launched a new loan product to help high-income professionals break into the housing market by covering the full 20% home deposit, traditionally required by lenders.
The new product, Deposit Pro, is available to individuals earning $250,000+ or households earning $400,000 or more.
The deposit loan is designed to allow borrowers to secure a standard 80% home loan from any lender – avoiding both lenders mortgage insurance (LMI) and the higher interest rates typically tied to low-deposit loans, Savings.com.au reported.
The loan is repaid at a fixed rate of 9.95% p.a. (on the deposit portion only), and borrowers must cover stamp duty and associated purchase costs separately.
Since March 2019, Australian house prices have climbed more than 51%, pushing the median from $646,000 to $976,800 by the end of 2024. As a result, the 20% deposit needed to buy a home has increased by $66,160 – from $129,200 to $195,360 in just five years.
Neil Smoli (pictured), Reaia co-founder and co-CEO, said saving a large deposit remains the biggest barrier to homeownership, even for those on high incomes.
“Traditional lenders are telling Australians earning hundreds of thousands of dollars a year that they need to spend a decade or more saving a cash deposit for the home they want,” Smoli said.
“[But] every year spent saving is a year of lost equity and wealth creation.”
Reaia illustrated the challenge with an example: a Sydney lawyer earning $350,000, aiming to buy a $2.5 million property, would typically need $500,000 upfront. Saving that while paying high rent could take up to 10 years, the company said.
Reaia positions its Deposit Pro loan as a three-to-five-year stepping stone, enabling borrowers to build equity and refinance once their financial position improves.
“What we're offering isn’t just access to property, it's access to time and opportunity,” Smoli said.
The product is bundled with Reaia’s property selection service, which assists borrowers in choosing homes with high capital growth potential.
While Deposit Pro may help unlock opportunities, brokers should note that some lenders still prefer deposits made up of “genuine savings”, as these indicate financial discipline and loan serviceability.
Lenders may assess:
Some major banks already waive LMI for certain high-income professionals, depending on occupation or on a case-by-case basis.
Borrowers using deposit loans may face hurdles when applying for the 80% home loan if the lender doesn't accept borrowed deposits. In such cases, income strength and profession status may weigh heavily in the lender’s decision, Savings.com.au reported.
High-income borrowers often have access to more flexible credit policies, especially if they’re employed in sectors like law, medicine, or finance. Still, brokers should evaluate each lender’s position on non-genuine savings and deposit loans before proceeding.
Reaia is targeting a clear gap: high-income earners with no or low deposits who want to buy premium property but avoid the cost of LMI. For a $2.5 million home loan, LMI could amount to hundreds of thousands of dollars, depending on the loan-to-value ratio.
“Australia has a massive underserved market of professionals who can afford premium properties but are locked out by deposit requirements,” Smoli said.
“We’re here to bridge the gap between what high-income earners can afford and what they can buy.”
For borrowers on lower incomes, the Home Guarantee Scheme from Housing Australia remains an option. It allows individuals earning up to $125,000 and couples up to $200,000 to purchase with a 5% deposit and no LMI, but strict property price caps apply.
