The deposit is only part of the number
A twenty percent deposit on an $800,000 purchase is $160,000. The funds you actually need to complete are higher: stamp duty where it applies, transfer and registration fees, conveyancing, building and pest inspections, lender fees and adjustments.
Depending on the state and your eligibility for concessions, that can add anywhere from a few thousand to over forty thousand dollars.
Lenders mortgage insurance is not always the enemy
Buying with a smaller deposit usually means paying lenders mortgage insurance, which protects the lender, not you. It is a real cost and it deserves to be quantified.
It also deserves to be compared against the cost of waiting. In a rising market, two more years of saving can cost more in purchase price than the insurance premium would have. In a flat market, the opposite may be true. This is arithmetic, not ideology, and it should be run for your actual situation.
Genuine savings and gifted deposits
Some lenders require part of the deposit to be 'genuine savings' — funds accumulated over at least three months, rather than a recent gift or windfall. Rules differ, and consistent rent payments can sometimes substitute.
A gift from family is entirely acceptable to most lenders with a short letter confirming it is not repayable. Planning that conversation early prevents an awkward delay at approval stage.
Keep a buffer after settlement
Arriving at settlement with an empty account is a stressful way to begin home ownership. Hot water systems fail, rates notices arrive, and the first year of ownership almost always costs more than the spreadsheet suggested.
We generally encourage buyers to plan for a buffer of three to six months of repayments left over after everything is paid, even if that means adjusting the target price.