How Much Deposit Do I Need to Buy a House in Australia?
This article provides general information only and does not constitute financial advice. For advice tailored to your situation, consult a licensed financial adviser. Learn more.
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How Much Deposit Do I Need to Buy a House in Australia?
The minimum deposit to buy a house in Australia is generally 5% of the purchase price, though the standard recommendation is 20% to avoid paying lenders mortgage insurance (LMI). For first home buyers using the First Home Guarantee, a 5% deposit is accepted with no LMI required.
The deposit you need depends on the purchase price, the scheme you’re using and your lender’s policy.
Deposit Options at a Glance
| Deposit Size | LMI Required? | Scheme Needed? | Notes |
|---|---|---|---|
| 2% | No (via scheme) | Family Home Guarantee | Single parents only |
| 5% | No (via scheme) | First Home Guarantee / Regional FHBG | Income and price caps apply |
| 5% | Yes | No scheme | LMI adds $10,000–$40,000+ |
| 10% | Yes | No scheme | LMI still applies above 80% LVR |
| 20% | No | Not required | Standard deposit; full lender choice |
| 20%+ | No | Not required | Lower rate and better terms possible |
What Deposit Do You Need at Different Purchase Prices?
5% Deposit (minimum with First Home Guarantee)
| Purchase Price | 5% Deposit Required | Max Loan Amount |
|---|---|---|
| $500,000 | $25,000 | $475,000 |
| $600,000 | $30,000 | $570,000 |
| $700,000 | $35,000 | $665,000 |
| $800,000 | $40,000 | $760,000 |
| $900,000 | $45,000 | $855,000 |
Price caps under the First Home Guarantee vary by state — see First Home Guarantee eligibility.
20% Deposit (standard — avoids LMI)
| Purchase Price | 20% Deposit Required | Loan Amount | Stamp Duty (NSW, non-FHB) |
|---|---|---|---|
| $500,000 | $100,000 | $400,000 | ~$17,990 |
| $600,000 | $120,000 | $480,000 | ~$22,490 |
| $700,000 | $140,000 | $560,000 | ~$26,990 |
| $800,000 | $160,000 | $640,000 | ~$31,490 |
| $1,000,000 | $200,000 | $800,000 | ~$40,490 |
What Is LMI and Why Does It Matter?
Lenders Mortgage Insurance (LMI) is charged when you borrow more than 80% of the property’s value (LVR above 80%). Despite its name, LMI protects the lender — not you — if you default on the loan.
LMI premiums are significant and are typically capitalised into the loan (you pay interest on them for years):
| Purchase Price | LVR 90% (10% deposit) | LVR 95% (5% deposit) |
|---|---|---|
| $500,000 | ~$9,000–$14,000 | ~$16,000–$22,000 |
| $700,000 | ~$13,000–$20,000 | ~$23,000–$32,000 |
| $900,000 | ~$17,000–$26,000 | ~$30,000–$42,000 |
LMI premiums vary by lender and insurer. Use the LMI calculator for an estimate.
The First Home Guarantee allows eligible buyers to borrow up to 95% LVR without paying LMI — the government guarantees the lender for the portion above 80%.
The Real Savings Needed — Beyond Just the Deposit
Many first home buyers underestimate the total savings required. Beyond the deposit itself:
| Cost Item | Typical Range |
|---|---|
| Stamp duty (varies by state, may be exempt for FHB) | $0–$45,000+ |
| Conveyancing / legal fees | $1,500–$3,500 |
| Building and pest inspection | $400–$900 |
| Loan establishment fees | $0–$600 |
| Moving costs | $800–$2,500 |
| Buffer (emergency fund) | 1–2 months’ repayments |
For a $600,000 purchase in NSW, a first home buyer exempt from stamp duty still needs approximately $30,000 deposit (5% via FHBG) plus roughly $3,000–$5,000 in other upfront costs — a minimum of $33,000–$35,000 in savings, assuming $0 stamp duty.
A non-first-home-buyer purchasing the same property in NSW needs the $30,000 deposit plus approximately $22,490 in stamp duty plus other costs — totalling around $55,000–$60,000.
How Long Does It Take to Save a 20% Deposit?
| City | Median House Price | 20% Deposit | Years to Save (at $1,000/month) |
|---|---|---|---|
| Sydney | ~$1,450,000 | ~$290,000 | ~24 years |
| Melbourne | ~$940,000 | ~$188,000 | ~16 years |
| Brisbane | ~$900,000 | ~$180,000 | ~15 years |
| Perth | ~$780,000 | ~$156,000 | ~13 years |
| Adelaide | ~$770,000 | ~$154,000 | ~13 years |
This is why many first home buyers use a 5% deposit scheme or pursue more aggressive saving strategies like the FHSS.
Saving $2,000/month halves these timeframes. Using the FHSS scheme (contributing voluntarily to super and withdrawing up to $50,000 for a deposit) adds a tax efficiency advantage that can meaningfully accelerate savings.
Deposit Strategies for First Home Buyers
1. First Home Super Saver (FHSS) Scheme Voluntary super contributions (up to $15,000/year, $50,000 total) are taxed at 15% inside super. When withdrawn for a home purchase, the tax saving compared to after-tax saving can be $3,000–$6,000 per year for mid-to-high income earners.
2. Use the First Home Guarantee Buying with a 5% deposit through the First Home Guarantee avoids LMI — saving $10,000–$35,000 in LMI premiums that would otherwise be payable.
3. Family gift or guarantee Parents can gift money toward a deposit or go guarantor using equity in their own property, allowing you to purchase sooner with a smaller deposit. See gifted deposit guide and guarantor guide.
4. Consider a smaller property or different location A lower purchase price reduces the deposit needed dramatically. Regional areas offer lower entry prices — and the Regional First Home Buyer Guarantee applies the same 5% deposit/no LMI benefit in eligible areas.
Frequently Asked Questions
What is the minimum deposit to buy a house in Australia? The minimum deposit is generally 5%, though some schemes allow as little as 2% for single parents (Family Home Guarantee). Without a scheme, a 5% deposit means paying LMI. With the First Home Guarantee, eligible buyers can borrow 95% with no LMI.
How much do I need to save beyond the deposit? Allow for stamp duty (varies by state — may be zero for first home buyers), conveyancing fees ($1,500–$3,500), building and pest inspection ($400–$900) and a financial buffer. Total additional savings of $3,000–$10,000 beyond the deposit is common for first home buyers with stamp duty exemptions; much more without exemptions.
Do I need genuine savings for a home deposit? Most lenders require at least 5% in “genuine savings” — funds that have been held in your account for at least 3 months. Gifted funds generally cannot count as genuine savings on their own. A guarantor arrangement is an alternative way to meet deposit requirements without genuine savings.
Is a 10% deposit enough to buy a house? Yes, but LMI will apply unless you’re using the First Home Guarantee (which caps the scheme at 95% LVR). At 10% deposit and 90% LVR, LMI costs typically range from $9,000 to $26,000 depending on the loan size.
Related Guides
- First Home Guarantee Explained
- FHSS Scheme — Using Super for Your Deposit
- How to Save for a House Deposit
- LMI Calculator
- First Home Buyer Hub
This article provides general information only. Deposit requirements and scheme eligibility depend on individual circumstances and lender policies. For advice tailored to your situation, speak with a licensed mortgage broker or financial adviser. Find one through MoneySmart.