How Much Deposit Do I Need to Buy a Home in Australia?

The amount you actually need depends on factors including:

• the property's purchase price
• the lender's valuation
• how much you can borrow
• your loan-to-value ratio
• lender requirements
• whether Lenders Mortgage Insurance applies
• buying costs
• whether you're eligible for government assistance
• your overall financial position

• First home buyers
• How we approach home loans

A 20% deposit is commonly discussed because borrowing 80% or less of a property's value can help borrowers avoid Lenders Mortgage Insurance in many standard lending situations.

As a simplified illustration only: on a $700,000 property, a 20% deposit is $140,000, leaving an indicative loan amount of $560,000. This example excludes purchasing costs. The lender's valuation can also differ from the purchase price, and any actual loan amount remains subject to lender assessment.

A larger deposit can also mean borrowing less, potentially paying less interest over time, a lower loan-to-value ratio and potentially access to different lending options. But waiting until you have exactly 20% isn't necessarily the only way to purchase.

Potentially. ASIC's Moneysmart notes that some lenders may accept a deposit as low as 5%. Not every lender offers lending at that level, and having a 5% deposit does not by itself mean an applicant qualifies for a home loan.

A smaller deposit generally means you're borrowing a larger proportion of the property's value. Depending on the lender and circumstances, this may result in additional costs such as Lenders Mortgage Insurance.

Eligible buyers may also be able to use the Australian Government 5% Deposit Scheme, described further below.

• Moneysmart: save for a house deposit

Loan-to-value ratio, usually called LVR, compares the amount being borrowed with the value of the property used as security. The calculation is the loan amount divided by the property value, multiplied by 100.

For example, a $450,000 loan against a $600,000 property is an LVR of 75%, with $150,000 of deposit or equity.

A lower LVR generally means you're borrowing a smaller proportion of the property's value. Keep in mind the lender may use its own valuation of the property rather than simply relying on the purchase price.

Lenders Mortgage Insurance, commonly called LMI, is insurance that protects the lender if the borrower cannot repay the loan and the lender suffers a loss after enforcement. It does not insure the borrower.

Moneysmart notes that LMI may apply when the LVR is above 80%, depending on the lending arrangement. The cost can sometimes be paid at settlement or added to the loan, subject to lender requirements.

LMI does not automatically apply in every case above 80% LVR. Lender, product, profession, scheme eligibility and other circumstances can affect the position, and premiums vary, so any cost should be confirmed for your specific scenario rather than estimated generically.

• Moneysmart: buying a house

Not necessarily. LMI is a real cost and should be understood before proceeding, but the decision isn't simply “LMI is bad, so I must wait until I have 20%.” Waiting longer to build a larger deposit can have other implications.

Waiting may mean property prices change, your circumstances change, you continue paying rent while saving, your borrowing capacity changes or interest rates change.

Purchasing sooner with a smaller deposit may mean borrowing more, paying LMI where applicable, having less equity at the beginning, potentially paying more interest and having a smaller financial buffer after settlement. The appropriate decision depends on the numbers and your circumstances, not on entering the market as quickly as possible.

Your deposit isn't necessarily the only cash you'll need. Depending on the property and your circumstances, buying costs can include:

• stamp duty
• conveyancing or legal costs
• building and pest inspections
• loan or settlement costs
• moving costs
• adjustments at settlement
• other property-related costs

• Moneysmart: ways to buy a home sooner
• First Home Buyers (Australian Government)

The Australian Government 5% Deposit Scheme can help eligible buyers purchase a home with a smaller deposit without paying Lenders Mortgage Insurance. As at August 2026, eligible first-home buyers can purchase with a minimum 5% deposit, and eligible single parents or legal guardians may be able to purchase with a minimum 2% deposit.

The Australian Government provides a guarantee to the participating lender for part of the loan. The guarantee is not a cash payment to the buyer.

As at August 2026, the Scheme has no income caps, no waitlists and unlimited places for eligible applicants, together with property price caps based on location, participating lender requirements and owner-occupier requirements. These are current settings rather than permanent rules, so confirm the position at the time you apply.

• Australian Government 5% Deposit Scheme
• Scheme eligibility for first home buyers

No. The Australian Government 5% Deposit Scheme uses a government guarantee supporting part of the loan. It is not the same structure as a shared-equity program, where another party obtains an ownership interest in the property.

Shared-equity programs are structurally different and have separate eligibility requirements, so it's worth being clear about which program you're actually considering.

Yes, for the Australian Government 5% Deposit Scheme. The property must meet the applicable location price cap, and both the purchase price and the home's value as assessed by the participating lender need to remain within the relevant cap.

Price caps vary by location and can change, so check the official price-cap tool for the area you're buying in rather than relying on a figure quoted elsewhere.

• Scheme property price caps

Having a larger deposit can still be beneficial. Depending on your circumstances, a larger deposit may reduce the amount you need to borrow, reduce your LVR, reduce interest costs, potentially provide access to different lending options and reduce or avoid LMI where applicable.

Government scheme rules can also affect how a larger available deposit is treated. Reducing your deposit artificially to fit a scheme isn't a sensible strategy; the right approach depends on the full picture.

Some lenders may consider the source and history of a borrower's deposit as part of their assessment, particularly for higher-LVR lending. The treatment of genuine savings varies between lenders and products.

Possible deposit sources can include savings, sale proceeds, gifts, equity and other acceptable sources depending on the lender and loan structure. The source of your funds can matter, so it's worth checking before committing to a purchase.

Potentially. Family assistance can take different forms, including a financial gift, family guarantee arrangements or other appropriately structured assistance. These approaches have different financial and legal implications.

A guarantor arrangement is not the same thing as simply giving someone money for a deposit. Where a guarantee is being considered, the guarantor should understand the obligations and risks involved and may be encouraged to obtain independent legal and financial advice.

Eligible first-home buyers may be able to use the First Home Super Saver scheme. The FHSS scheme allows eligible voluntary contributions made to super to be released, subject to the scheme rules, to help purchase a first home. This is not general access to compulsory super — only eligible voluntary contributions and associated amounts can be released.

As at August 2026, the ATO states that eligible contributions are subject to a maximum of $15,000 of eligible contributions from any one financial year and a maximum of $50,000 of eligible contributions across all years. Other eligibility, tax, timing and release rules apply, and this is general information rather than tax advice.

• ATO: First Home Super Saver scheme

Being a first-home buyer doesn't automatically change a lender's normal credit requirements. However, eligible first-home buyers may have access to government schemes, grants, concessions or other assistance that can reduce the upfront savings required.

Available assistance depends on:

• where you're buying
• property price
• property type
• previous property ownership
• residency or citizenship status
• lender participation
• scheme-specific eligibility criteria

• First home buyers with Rove
• The deposit conversation nobody has properly

Having a sufficient deposit does not automatically mean you can borrow the remaining amount. A lender also needs to assess whether you can service the proposed loan.

For example, someone may have a 20% deposit but insufficient borrowing capacity for the remaining 80%. Another borrower may have sufficient income to service the loan but not yet have enough deposit or funds to complete the purchase. Both sides matter.

• How much can I borrow for a home loan?

There isn't one answer for everyone. Waiting may allow you to build a larger deposit, borrow less, potentially avoid LMI and strengthen your financial buffer.

Purchasing with a smaller deposit may allow an eligible borrower to enter the market sooner but can involve a larger loan, higher repayments, LMI where applicable, less initial equity and greater exposure if property values fall.

Government assistance may change the comparison for eligible buyers. The appropriate decision depends on your financial position, property plans and available lending options.

You don't need to wait until you've reached a particular deposit amount before understanding your position. Speaking with a broker earlier can help you understand:

• indicative borrowing capacity
• likely deposit requirements
• potential LVR
• whether LMI may apply
• possible government support pathways
• purchasing costs to plan for
• issues that may need to be addressed before applying

• Self-employed lending
• Book a Lending Strategy Session
• Knowledge Centre