Although it is always better to save a deposit of your own, it is possible to use a personal loan as part of your deposit to buy a home.
You need to meet the criteria for both a home loan and for a personal loan.
To qualify you must have: A high income to afford both repayments.
Can you borrow money to make a downpayment on a house?
Borrow against equity you have in another property. One option to find the funds you need for a new home is to borrow against the equity you have in your current property. When using home equity loan or HELOC for a down payment on a new home, the idea is to pay it off in full once you sell the property.
Can you use a loan as a deposit?
If lenders do accept a loan as a deposit it’s likely that they will significantly lower the amount they’re willing to lend you, which may defeat the whole purpose. You’ll also probably be unable to access the more competitive mortgage rates.
How much can you borrow without a deposit?
Yes, you can get a home loan with only a 5% deposit, although how much you can borrow will differ depending on the lender. Generally speaking, you’ll need at least 5% of the purchase price to get approval for a loan.
Can you get a loan for a house deposit UK?
Help to buy
It provides an equity loan that lets you borrow money for a deposit interest free for five years (up to 20% of the property’s value or 40% in London). You then put down a further 5% deposit from your own money and get a mortgage for the rest of the price.