vendor deposit and banks

Hi All,

Looking at selling a house to someone who lacks the deposit.
If I lend them say 5-10% deposit interest free say for 3 years. Does anyone know does the interest free loan need to factor in thier serviceability – and if so how?

Would the lender mind the deposit coming from the vendor like this (and no the house price is not inflated to cover the deposit).

Or else would it be better to lend it IO at fixed 5%? Least then can easily factor the payments and may seem like a more ‘normal’ loan by the lender?

Many Thanks
Grant