Ask anyone what a “standard” home loan deposit is and you’ll get the same answer: 20%.
Your parents saved it, the bank’s calculator defaults to it, and plenty of Australians are still renting because of it. But 20% isn’t the price of admission: it’s the price of avoiding Lenders Mortgage Insurance (LMI).
In this article we give you the real deposit numbers at every price point, including the total downpayment required to buy a home after all costs, so you can work out the right option for you.
How much deposit you need, by purchase price
Before you set a savings target, it helps to see what each tier actually costs at your price point.
Deposit figures are simple percentages. The LMI columns are indicative, and the assumptions behind them sit underneath the table.
| Purchase price | 5% deposit | 10% deposit | 20% deposit | Indicative LMI at 5% | Indicative LMI at 10% |
|---|---|---|---|---|---|
| $500,000 | $25,000 | $50,000 | $100,000 | $14,000 to $21,500 | $6,500 to $11,500 |
| $600,000 | $30,000 | $60,000 | $120,000 | $17,000 to $25,500 | $8,000 to $13,500 |
| $700,000 | $35,000 | $70,000 | $140,000 | $20,000 to $30,000 | $9,500 to $16,000 |
| $800,000 | $40,000 | $80,000 | $160,000 | $23,000 to $34,000 | $11,000 to $18,000 |
| $900,000 | $45,000 | $90,000 | $180,000 | $25,500 to $38,500 | $12,000 to $20,500 |
| $1,000,000 | $50,000 | $100,000 | $200,000 | $28,500 to $43,000 | $13,500 to $22,500 |
LMI ranges are modelled on premiums of 3% to 4.5% of the loan amount at 95% LVR and 1.5% to 2.5% at 90% LVR, for an owner-occupier buying to live in, rounded to the nearest $500. The premium is set by the insurer rather than the lender, and it moves with your loan size, your state, your loan type and whether you’re a first home buyer. Get a quote on your own numbers rather than working off the table. No LMI applies at 20%+.
Two things jump out of that table.
The first is that LMI at 5% costs roughly double what it costs at 10%, so the step from 5% to 10% buys you far more than the step from 10% to 15%.
The second is the size of the gap at higher purchase prices. On a $1,000,000 purchase, moving from a 5% deposit to a 20% one means finding another $150,000 in cash before you can start.
Loan-to-Value Ratio (LVR), and why the 80% line matters
Loan-to-value ratio (LVR) is the loan divided by what the property is worth. It’s the number every lender uses to assess risk, and why the 20% deposit keeps coming up.
How much Lenders Mortgage Insurance (LMI) costs
Lenders Mortgage Insurance protects the lender, not you. It doesn’t cover your repayments if you lose your job and you can’t claim on it. You pay the premium and the lender is the beneficiary. Moneysmart offers this definition:
Lenders mortgage insurance (LMI) protects a credit provider if borrowers are unable to repay their loan. LMI is usually a one-off cost to a home loan borrower, payable when the amount borrowed exceeds 80% of the value of the property. LMI does not benefit the borrower, it only protects the lender.
Most borrowers capitalise the LMI premium, which means it gets added to the loan rather than paid at settlement. That keeps your cash requirement down and spreads the cost across the loan term, with interest.
Is it worth paying LMI to buy sooner?
Many home buyers choose to pay LMI with a lower deposit in order to buy sooner.
On a $600,000 purchase with a 10% deposit, an $11,000 LMI premium is about 1.8% of the price. If the same house costs $636,000 a year later, which is 6% growth, you’ve paid $36,000 to avoid an $11,000 charge.
On the other hand, if prices fall while you’re sitting at 95% LVR, you’ll have almost no equity buffer and limited room to refinance out.
Paying LMI is a timing decision, and the right answer depends on what your target market is doing, how fast you can save, and how stable your income is.
Like many things when it comes to getting a home loan, planning and locking in the right strategy are important.
3 ways to avoid LMI, without a 20% deposit
There are three routes to potentially getting a zero LMI home loan:
- A government guarantee. The Australian Government 5% Deposit Scheme covers the gap between your deposit and 20% with no LMI to pay. This is an excellent option for first home buyers.
- A family guarantor. A parent or close family member offers equity in their own property as additional security.
- A professional waiver. Some lenders waive LMI entirely for specific occupations. Eligible medical professionals can borrow up to 95% LVR without it, while legal, accounting, finance and engineering professionals typically sit at up to 90%. Which occupations qualify, and at what LVR, is each lender’s own policy and it changes.
How the Australian Government 5% Deposit Scheme works
The scheme has had four names in six years, which is most of the reason the guidance you’ll find on it is out of date.
It launched in 2020 as the First Home Loan Deposit Scheme (FHLDS). It was renamed the First Home Guarantee and grouped under the Home Guarantee Scheme umbrella alongside the Family Home Guarantee and the Regional First Home Buyer Guarantee. From 1 October 2025 those streams were consolidated and the whole thing was rebranded the Australian Government 5% Deposit Scheme.
They’re all the same scheme. If you’ve read about the FHLDS, the FHBG or the First Home Guarantee, you’ve read about the 5% Deposit Scheme.
There are no income caps and no limit on places, so every eligible first home buyer with a 5% deposit can apply.
5% Deposit Scheme property price caps by state
Both the purchase price and the lender’s valuation have to sit at or below the cap for your location.
| State | Capital or regional centres | Rest of state |
|---|---|---|
| New South Wales | $1,500,000 | $800,000 |
| Victoria | $950,000 | $650,000 |
| Queensland | $1,000,000 | $700,000 |
| Western Australia | $850,000 | $600,000 |
| South Australia | $900,000 | $500,000 |
| Tasmania | $700,000 | $550,000 |
| Australian Capital Territory | $1,000,000 | $1,000,000 |
| Northern Territory | $750,000 | $600,000 |
Source: firsthomebuyers.gov.au, current as at July 2026. Jervis Bay Territory and Norfolk Island sit at $550,000, and Christmas Island and the Cocos (Keeling) Islands at $400,000. Caps are reviewed periodically, so run the postcode tool before you make an offer.
2% deposit options: single parents and Help to Buy
The single parent stream, previously the Family Home Guarantee, lets eligible single parents and legal guardians with dependants buy from a 2% deposit with no LMI charged.
Help to Buy is a separate programme. It also starts at a 2% deposit, but the government takes an equity share in the property rather than guaranteeing the loan, and that share gets settled when you sell.
Why scheme eligibility isn’t the same as approval
Not every lender participates, and the ones that do apply their own credit policy on top of the scheme rules.
The scheme decides whether you're eligible, but the lender still decides whether you're approved.
You’ve still got to service the loan on that lender’s assessment, and a 95% LVR loan is a large loan by definition. The low deposit home loans page compares the routes side by side.
Can a guarantor replace a home loan deposit?
Largely, yes. A family guarantor uses equity in their own property as additional security for your loan, covering the gap between the deposit you’ve got and the 20% mark.
Guarantees are usually limited to a specific dollar amount rather than the whole loan, and they can be released once your equity position improves enough to stand on its own.
Can you use your super for a house deposit?
Generally, money in your super fund must not be accessed until retirement, but there is an exception: the First Home Super Saver Scheme (FHSS).
You make voluntary contributions into super, then apply to the ATO to release them later for a first home deposit. It’s like using super as a savings account with more favourable tax treatment.
The limits are $15,000 of eligible voluntary contributions in any one financial year and $50,000 in total across all years. See full detail on the ATO’s FHSS page.
There is no doubt this can be a highly advantageous scheme for buyers saving for their first home.
Upfront costs of buying a house, beyond the deposit
The deposit is the biggest contribution amount but it isn’t the only one.
Stamp duty and the first home buyer concessions
Stamp duty is usually the largest additional cost, and it’s the one that varies most between states. Every state and territory offers a first home buyer concession or exemption, but the thresholds, property types and amounts all differ, and they move at each state budget.
Check the source rather than a summary: Revenue NSW, State Revenue Office Victoria or Queensland Revenue Office, and their equivalents in WA, SA, Tasmania, the ACT and the NT. A concession can move your cash requirement by tens of thousands of dollars, so confirm yours before you set a savings target.
Conveyancing, inspections and incidental costs
| Cost | Typical range |
|---|---|
| Conveyancing or legal fees | $1,500 to $3,000 |
| Building and pest inspection | $500 to $800 |
| Loan application or establishment fees | $0 to $600 |
| Title search and registration | $200 to $400 |
| Strata search, if applicable | $200 to $350 |
| Council and water rate adjustments | Varies by settlement date |
A workable rule of thumb is to save a deposit plus 5% to 6% of the purchase price, before any first home buyer stamp duty concession. On a $700,000 purchase that’s another $35,000 to $42,000 on top of whatever deposit you’ve landed on. Where a concession applies, that figure drops sharply.
What lenders count as genuine savings
Most lenders want to see that some of your deposit is what they call genuine savings, typically funds you’ve accumulated or held for around 3 months. Banks want to see that you have the habit of setting aside money every month from your pay packet.
Lender policies can differ sharply. Some lenders count 12 months of on-time rental payments as the equivalent, which matters a lot if your deposit arrived as a gift.
Does a bigger deposit mean you can borrow more?
Not directly, and this trips a lot of people up.
Borrowing capacity comes from your income, your existing debts and commitments, your living expenses and the lender’s serviceability buffer. Your deposit isn’t an input to that calculation at all.
What a bigger deposit does change is the total you can spend, since purchase price equals deposit plus loan.
If the loan size rather than the deposit is what’s blocking you, how to increase borrowing power covers strategies to ensure you put your best foot forward in this area.
Should you keep saving for a deposit or buy now?
The choice of whether you should keep saving or buy sooner comes down to four variables:
How fast can you actually save? Use your real monthly surplus, not your optimistic one. The arithmetic looks like this before any price growth:
| Saved per month | Months to 5% | Months to 10% | Months to 20% |
|---|---|---|---|
| $1,000 | 30 | 60 | 120 |
| $1,500 | 20 | 40 | 80 |
| $2,000 | 15 | 30 | 60 |
Based on a $600,000 purchase, where a 5% deposit is $30,000, 10% is $60,000 and 20% is $120,000.
At $1,500 a month, waiting for 20% is close to a seven-year plan. That’s the real cost of treating it as the minimum.
What’s your target market doing? Where prices are flat or falling, waiting costs you little and improves your position. Where house prices are increasing, the goalposts move with them.
How secure is your income? A 95% LVR loan leaves almost no equity buffer, so if your income is variable or unstable a larger deposit provides greater peace-of-mind.
What does the overall cost look like? LMI, stamp duty after any concessions, and the difference in what you can borrow. Model both paths before you commit to either.
There’s no universally right deposit, only a right deposit for your income, your timeline and the market you’re buying into. That’s a modelling exercise, and it belongs before you set a savings target rather than two years into chasing the wrong one.
The deposit question is really a lender question
20% was never the minimum, and what replaces it depends on who assesses you: the deposit they’ll accept, how they price the LMI, and what they count as savings.
To see what your deposit actually gets you, book a strategy session and we’ll map both paths across our 30+ lender panel.
Frequently asked questions
How much deposit do I need to buy a house in Australia?
Many lenders will consider a home loan from a 5% deposit, and 20% is the level at which Lenders Mortgage Insurance (LMI) stops applying. On a $600,000 house that’s $30,000 at 5% and $120,000 at 20%. The practical minimum depends on the lender, your income and whether you qualify for the government’s 5% Deposit Scheme or a guarantor arrangement, all of which change the answer.
What is a 5% deposit on a $600,000 house?
$30,000, which leaves a $570,000 loan at 95% LVR. Without a scheme or a guarantor, expect an indicative LMI premium of $17,000 to $25,500 on top, which most buyers capitalise into the loan. If you’re an eligible first home buyer using the 5% Deposit Scheme, no LMI is charged.
How much deposit do I need for a $700,000 house?
$35,000 at 5%, $70,000 at 10% or $140,000 at 20%. Add roughly $35,000 to $42,000 for stamp duty, conveyancing and inspections before any first home buyer concession. Where a stamp duty concession applies in your state, that additional figure can fall substantially.
How long does it take to save a house deposit?
At $1,500 a month, a 5% deposit on a $600,000 house takes about 20 months and a 20% deposit takes about 80 months. That’s the arithmetic before price growth, which is why the gap between the two tiers is usually a bigger decision than the dollar figures suggest. Run it on your real surplus rather than your budgeted one.
Can I buy a house with a $20,000 deposit?
Possibly, depending on the price and the route. $20,000 is 5% of $400,000, so on a lower-priced property it can be enough on its own. Above that you’d generally be leaning on the 5% Deposit Scheme, a guarantor, or a combination of savings and a first home owner grant. Check what your borrowing capacity supports before you rule it out.
Is $40,000 enough for a house deposit?
It’s 5% of $800,000 and 10% of $400,000, so the honest answer is that it depends on where you’re buying and what your income supports. The bigger constraint for most buyers at this level isn’t the deposit, it’s the purchase costs sitting on top of it and whether stamp duty is payable or concessional in your state.
Can you buy a house with no deposit at all?
Not with zero funds, but you can buy without a cash deposit of your own. A family guarantor using equity in their property is the usual route, and some buyers combine a grant with a small savings balance. A genuine no-deposit home loan is rare and very situation-specific, so treat any offer framed that way with care.
Do first home buyers still get a 5% deposit scheme place?
Yes. There’s no annual limit on places and no queue, and there are no income caps. You still need to meet the eligibility criteria, buy within the property price cap for your location, and satisfy a participating lender’s own credit assessment.
How much is LMI on a 10% deposit?
At 90% LVR, indicative premiums generally land between 1.5% and 2.5% of the loan amount, so on a $600,000 purchase that’s roughly $8,000 to $13,500. The premium is set by the insurer rather than the lender, and it varies with loan size, location, loan type and whether you’re a first home buyer. Get an actual quote before you budget off a range.
Does a bigger deposit increase how much I can borrow?
No. Serviceability runs off your income minus your expenses and commitments, and savings don’t appear in that sum. A bigger deposit lowers your LVR, which can remove LMI and improve your pricing, and it lifts the total price you can reach. The maximum loan itself stays where it was.
Disclaimer: This is general information, not personal credit advice. The LMI premiums, cost ranges and savings timelines above are illustrative, are based on typical lender and insurer practice at the date shown, and are rounded. Stamp duty, scheme caps and lender policy all change without notice. Nothing here is a quote, an approval or a promise about what any lender will do with your file.