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Can I use a personal loan or a credit card for my deposit?

Bayley Clarke · Mortgage broker on the road · Last checked 1 November 2026 · 3 min read

The 60 second version, filmed from the driver's seat. The rest of this page is the detail underneath it.

You're paying expensive money to buy cheap money

Think about what you'd actually be doing. A home loan is about the cheapest money you'll ever borrow, because it's secured against the house. A personal loan or a credit card isn't secured against anything, so the rate is a lot higher. Using the expensive debt to fund the deposit on the cheap debt means you're paying the highest interest you can on the part of the purchase you were supposed to own outright.

And personal loans and cards are generally paid back over a much shorter time than a home loan, so the repayments are heavy. You'd be starting life in your new home carrying two lots of repayments, one of them at a rate that hurts, right when money is tightest.

It works against your application too

From the bank's perspective, the deposit is meant to show you've got skin in the game. Lenders want to know where the deposit came from, and borrowed money doesn't tick that box. At least one lender says outright that deposit funds can't be borrowed, and a personal loan isn't going to pass a genuine savings test anywhere.

Then there's borrowing power. A new personal loan repayment comes straight out of what the bank thinks you can afford, and a credit card counts against you based on its limit, even if you never use it. So the debt you take on to fund the deposit can shrink the home loan you're able to get. It's a lose, lose.

Better paths if the deposit is the wall

If you can't save the full deposit, there are proper ways around it. A guarantor is family who own property and can step in for you, so you may not need a deposit at all. They don't hand over any cash; their property backs part of your loan, and they come off once you've built enough equity.

An unconditional gift from family is another one, and so is the government's low deposit scheme for eligible buyers. Each has its own rules, and which one fits depends on your family, your income and what you're buying. That's a conversation to have before you go anywhere near a personal loan.