How much deposit do you need to buy a house in Australia?
Last reviewed July 2026 · figures use official 2026-27 rates.
The short version: most lenders want 20% of the price so you skip Lenders Mortgage Insurance, but you can buy with as little as 5%. Since October 2025 an eligible first home buyer can use the First Home Guarantee to buy on a 5% deposit with no LMI at all. On a $700,000 home that is $35,000 instead of $140,000.
The 20% rule, and why lenders care about it
Lenders look at your deposit as a share of the property price. That share is your loan-to-value ratio, or LVR. Put in 20% and you borrow 80%, so your LVR is 80%. Put in 10% and your LVR is 90%.
The number matters because 80% is the line where Lenders Mortgage Insurance kicks in. Below it, most lenders give you their standard pricing and no insurance premium. Above it, you pay LMI, a one-off premium that covers the lender (not you) if the loan goes bad. It gets more expensive the smaller your deposit is. On a $630,000 loan at 90% LVR the premium is roughly $14,500. Our LMI calculator will estimate it for your numbers.
The real minimum deposit
Twenty percent is the target, not the floor. Here is what different deposits actually get you in 2026.
| Deposit | What happens |
|---|---|
| 20%+ | No LMI, sharpest rates, widest lender choice |
| 10% to 19% | Approved by most lenders, but you pay LMI |
| 5% to 9% | Fewer lenders, higher LMI, tighter checks |
| 5% (First Home Guarantee) | Eligible first home buyers pay no LMI; the government backs the gap |
| 2% (Family Home Guarantee) | Single parents with a dependant, also no LMI |
So the practical minimum is 5% for most people, or 2% if you are a single parent using the relevant guarantee. Under 5% you generally need a guarantor.
What changed in October 2025
The First Home Guarantee used to be small and hard to get into. It had income limits, only 35,000 places a year, and modest price caps. From 1 October 2025 all three of those limits went.
It is a federal scheme, so it runs Australia-wide, in every state and territory. What changes by location is the price cap, not whether you can use it. There are now no income caps and no cap on the number of places, so every eligible first home buyer can use it. For 2026 the headline price caps are $1,500,000 in Sydney and NSW regional centres, $1,000,000 in Brisbane and Queensland regional centres, $950,000 in Melbourne and Geelong, and $850,000 in Perth, with separate caps for other cities, regional areas and the territories. You still need to be a first home buyer, buy a home to live in, and meet the usual credit checks, and places are limited to one guarantee per property.
The costs that sit on top of the deposit
People save for the deposit and forget the rest. The deposit is not the only cash you need at settlement. On a normal purchase you also pay:
- Stamp duty. The big one. First home buyers pay little or nothing in most states, but an investor buying a $700,000 home in NSW pays about $25,690. It works differently in every state, so use the stamp duty calculator for yours: NSW, VIC, QLD, SA or WA.
- LMI, if your deposit is under 20% and you are not using a guarantee.
- Conveyancing or solicitor fees, usually $1,500 to $2,500.
- Building and pest inspection, around $500 to $800.
- Loan and lender fees, often a few hundred dollars.
- Moving, connections and a small buffer for the first few weeks.
For a first home buyer using the guarantee on a $700,000 home in NSW, the cash needed can be under $40,000 once you add a 5% deposit, zero stamp duty, and a couple of thousand in fees. For an investor at the same price with a 20% deposit, it is closer to $170,000 once stamp duty is in. The stamp duty part changes a lot from state to state, so check yours (NSW, VIC, QLD, SA or WA) with the calculators below.
A worked example: a $700,000 home
Here is the same house bought four ways, so you can see what the deposit choice does to the loan and the insurance.
| Deposit | Loan | LVR | Approx LMI |
|---|---|---|---|
| $140,000 (20%) | $560,000 | 80% | $0 |
| $70,000 (10%) | $630,000 | 90% | ~$14,500 |
| $35,000 (5%) | $665,000 | 95% | ~$26,000 |
| $35,000 (5%, First Home Guarantee) | $665,000 | 95% | $0 |
The last two rows are the same deposit and the same loan. The only difference is the guarantee, and it is worth about $26,000. That is why the scheme reshapes the deposit question for anyone who qualifies. A bigger loan does mean bigger monthly repayments, so run the loan size through the mortgage repayment calculator before you commit to a small deposit.
Other help worth knowing about
The guarantee is not the only leg-up. The First Home Super Saver scheme lets you save toward a deposit inside super and withdraw it later, which can grow the deposit faster because of the lower tax on contributions. Most states also run first home buyer grants and stamp duty concessions, and those concessions alone can free up tens of thousands that would otherwise go to the government. A family guarantor who puts up equity can drop your effective LVR below 80% and remove LMI without you finding a full 20%.
How long it takes to save, and how to get there faster
On a $700,000 home, a 5% deposit is $35,000 and a 20% deposit is $140,000. At $1,500 saved a month the first takes about two years, the second closer to eight, before you count any interest or help. The savings goal calculator will tell you the monthly figure for your own target and deadline.
Two things speed it up more than budgeting harder. The First Home Super Saver scheme lets your deposit grow with less tax taken out along the way. A guarantor removes the LMI problem so you can buy sooner on a smaller deposit. Both are worth a conversation before you spend years chasing a full 20%.
Is a bigger deposit always better?
Not always, and this is where people talk themselves into waiting too long. A bigger deposit cuts your loan, your interest, and your LMI, and below about 60% LVR some lenders shave a little off the rate. Those are real savings. But rent and prices do not pause while you save. If a first home buyer can get in on 5% with no LMI through the guarantee, spending three more years reaching 20% can cost more in rent and price growth than the LMI would have. Run both paths before you assume you have to wait. There is no single right answer, only the one that fits your numbers.