The days of borrowing the total value of a new home are all but  gone, with most lenders now insisting borrowers share the loan risk by contributing more equity upfront, according to a new report.

Financial services research company Canstar Cannex says that lenders have pulled their horns in, post GFC, and either withdrawn their 100 per cent loan-to-value ratio home loans or reduced the amount that can be borrowed.

Three years ago, 270 home loans offered full 100 per cent borrowing.

"That lending pool has completely dried up and borrowers are now, on average, required to have a minimum deposit of 8 per cent to get a mortgage," Canstar Cannex financial analyst Mitchell Watson said.

According to Mr Watson, that translates to a deposit of $24,000 for a $300,000 home loan.

It's not all bad news, though. The return of solid deposit requirements heralds a return to sanity and should go some way towards ensuring borrowers keep their heads above water.

"The trade off between lowering the bar to allow borrowers to get a foot in the door of their own home and responsible lending to keep them there has always been a juggling act for the banks", Mr Mitchell said.

"Providing some sort of deposit certainly adds to the affordability problem but it will lead to better outcomes for borrowers in the long run."

Borrowers also need to be aware that not all institutions will accept the First Home Buyers Grant as part of the deposit. A pre-existing relationship and consistent savings history with the financial institution are often pre-requisites, particularly for a home loan at the maximum loan-to-value ratio (LVR).

Borrowers who don't have a hefty deposit can still get a home loan, provided they meet the rest of the lender's criteria and pay lender's mortgage insurance (LMI) as compensation.

Lenders mortgage insurance enables institutions to lend at a higher loan-to-value ratio by offsetting some of the risk associated with a higher leveraged loan.

When LMI is taken out over a mortgage, should the borrower default and a loss is made on the sale of the property, the LMI will cover any loss to the lender.

In general, all lenders will charge LMI on loans above 80 per cent of the value of the property. The amount charged varies greatly, according to loan amount, loan type and borrower profile such as first home owner.

"It's may be thousands of dollars on top of your loan but LMI allows you to enter the market earlier by reducing the amount of savings you need to contribute," Mr Watson said.

Canstar Cannex this week released its home loan star ratings report which compares 1,600 home loans from 110 lenders to compile five-star fixed and variable home loans for residential, as well as investment purposes.

"It's ironic that lenders are now asking for a bigger deposit, yet the range of home loans on offer has never been better," Mr Mitchell said.

"Even though competition may have reduced because of various mergers and acquisitions in financial circles, from a product sense competition is thriving in the home loan market and our results reflect this."

Canstar Cannex has awarded a 5-star rating to 130 products, 115 of which are provided by lenders other than the big four banks.

"Mortgage managers provide the vast majority of 5-star home loans, followed by the credit unions," Mr Watson said.

"Even though the major banks make up only 12 per cent of 5-star loans offered, they hold over 90 per cent of the home loan market."

This is a hangover from the global financial crisis when borrowers perceived the big banks to be safer and bypassed a lot of equal or higher quality products in the process.

"It will be interesting to monitor any shift in borrower behaviour as more high quality loans make inroads into the home loan market," Mr Mitchell said.

Consumers can download the latest Canstar Cannex home loan star ratings report on www.canstarcannex.com.au.