A 100% LVR home loan automatically means that you don’t pay any down payment, which increases the lender’s risk by letting you borrow the amount. In this scenario, the lender can only consider your loan request favorably if someone – a relative or a friend – can guarantee your loan. Alternatively, they would need strong reasons to believe you are unlikely to default on the loan, such as a professional qualification or industry affiliation, or a significantly high income, indicating greater borrowing power. These support conditions may even convince a few lenders to set aside issues such as an unsatisfactory credit score or insufficient savings for a deposit, which would usually cause the lender to charge IMT.
Suppose a lender approves your home loan application at 100% LVR (no deposit), no guarantor. The terms of such a loan will likely require you to pay more interest, at least until you repay part of the loan. For example, the lender may charge you an interest rate 2-3% above their standard variable interest rate until you repay 20% of the loan. Essentially, lenders need some assurance that you have the ability to repay the loan on their terms, especially given the exceptional nature of the loan.