Almost everyone starts with the same number. Twenty per cent. It is the figure your parents used, the one the bank’s calculator defaults to, and the reason a lot of Australians are still renting while they save.
Twenty per cent is a real threshold and it does something specific: it is the point at which lenders stop charging you for the risk of a small deposit. But it is not a legal minimum, and treating it as one has quietly cost a generation of buyers years of price growth they never got back.
This guide gives you the actual numbers. What 5%, 10% and 20% look like at each price, what lenders mortgage insurance adds on top, how the government scheme works now that it has changed names four times, and how to tell whether waiting another eighteen months leaves you better off or worse off.
How much deposit you need, by purchase price
Here is the arithmetic, laid out. Deposit figures are simple percentages of the purchase price. The LMI columns are indicative only, and the assumptions behind them are set out underneath.
| 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 $21,000 | $6,500 to $11,000 |
| $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 $15,500 |
| $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 $20,000 |
LMI ranges are modelled on premiums of roughly 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. Actual premiums are set by the insurer, not the lender, and move with your loan size, your state, your loan type and whether you are a first home buyer. Get a quote for your own numbers rather than working off the table. No LMI applies at 20%.
Two things jump out. 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%. And on a $700,000 purchase, the gap between a 5% and a 20% deposit is $105,000 of cash you have to find before you can start.
For most buyers the real question is not how much deposit is ideal. It is how much deposit is enough to get approved on terms you can live with.
What LVR means and why lenders care
Loan-to-value ratio is the loan divided by the property value. A $30,000 deposit on a $600,000 house means a $570,000 loan, which is a 95% LVR.
Lenders price risk off that number. At 80% or below, every lender on the market wants your business. Above 80%, the lender is exposed if prices fall and you default, so it either insures that exposure or declines it. That is the whole mechanism, and it is why 20% keeps coming up.
What lenders mortgage insurance actually costs
Lenders mortgage insurance protects the lender. It does not protect you, it does not cover your repayments if you lose your job, and you cannot claim on it. You pay the premium and the lender is the beneficiary. Moneysmart’s explanation is the plainest one published.
It is a one-off premium, charged when your LVR is above 80%. Most people capitalise it, which means it gets added to the loan rather than paid at settlement. That keeps your cash requirement down and spreads the cost over the loan term, with interest.
The two ways people get LMI wrong
The first is treating it as a fee to be avoided at all costs. On a $600,000 purchase with a 10% deposit, an $11,000 premium is around 1.8% of the price. If the same house costs $636,000 in twelve months, you have paid $36,000 to avoid an $11,000 charge.
The second is assuming the price growth argument always wins. Prices fall in some markets and some years, and if they fall while you are sitting at 95% LVR you have almost no equity buffer and limited ability 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. Anyone who tells you it is always right or always wrong is selling something.
Ways to avoid LMI without a 20% deposit
There are four routes, and they are covered on the zero LMI home loans page in more detail:
- A government guarantee. The 5% Deposit Scheme covers the gap between your deposit and 20%, so the lender has no uninsured exposure and no premium is charged.
- 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 for specific occupations. Eligible doctors can reach 95% LVR with certain lenders, while law, accounting, finance and engineering typically sit a tier below at up to 90%. Eligibility is lender-specific and changes.
- A larger deposit. Still the simplest route, if the timeline works.
The government scheme that has had four names
This is where most published guidance is out of date, and it matters because the names are how people search.
The scheme launched in 2020 as the First Home Loan Deposit Scheme. 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.
The administering agency changed names too. It was NHFIC, the National Housing Finance and Investment Corporation, until it became Housing Australia in 2023. Search engines still surface the old domain, which is part of why so much of the top-ranking content on this topic describes rules that no longer apply.
They are all the same scheme. If you have read about the FHLDS, the FHBG or the First Home Guarantee, you have read about the 5% Deposit Scheme.
What changed on 1 October 2025
Three things, and each of them is significant:
- Income caps were removed. The old limits of $125,000 for a single applicant and $200,000 for a couple no longer apply.
- Place limits were removed. The scheme used to ration a fixed number of guarantees per financial year, which created a scramble every July. It is now uncapped.
- Property price caps went up across every state and territory.
Current property price caps
Both the purchase price and the lender’s valuation must sit at or below the cap for your location.
| State or territory | Capital city and 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 (all areas) | n/a |
| Northern Territory | $750,000 | $600,000 |
Source: firsthomebuyers.gov.au, current as at July 2026. Caps are reviewed periodically, so check the postcode tool before you make an offer.
The other two streams
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.
Help to Buy is a separate programme. It also starts from a 2% deposit, but the government takes an equity share in the property rather than guaranteeing the loan, and that share is settled when you sell. Different trade entirely.
The catch nobody mentions
Not every lender participates, and the ones that do apply their own credit policy on top of the scheme rules. Meeting the eligibility criteria does not mean you are approved. You still have to service the loan on that lender’s assessment, and a 95% LVR loan is a large loan by definition. This is where lender choice does the heavy lifting. See low deposit home loans for how the routes compare.
Can a guarantor replace the deposit?
A family guarantor uses equity in their own property as additional security for your loan, covering the gap between what you have and the 20% mark. It can mean buying with little or no cash deposit of your own, and no LMI.
The appeal is obvious. The obligation is the part that deserves more attention than it usually gets. Your guarantor is legally on the hook for the guaranteed portion, and if things go wrong that money is theirs to find. It is a genuine commitment, and everyone involved should get their own legal advice before signing.
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. The mechanics are set out on the guarantor home loans page.
Using super: the First Home Super Saver Scheme
You generally cannot withdraw your super to buy a house. The First Home Super Saver Scheme is the narrow exception, and it works differently from how most people assume.
You make voluntary contributions into super, then apply to the ATO to release them later for a first home deposit. You are not withdrawing your existing balance, you are using super as a savings account with a different tax treatment.
The limits are $15,000 of eligible voluntary contributions in any one financial year and $50,000 in total across all years, plus associated earnings. Full detail is on the ATO’s FHSS page.
The benefit comes from the tax treatment: salary-sacrificed contributions are taxed at the concessional super rate rather than your marginal rate, so for many people the same gross income builds a deposit faster inside super than outside it. How much faster depends entirely on your marginal rate and your contribution timing, which makes this a question for your accountant rather than your broker.
The practical catch is timing. A release takes time to process, and lenders need to see the funds. Start the paperwork well before you are house hunting, not during.
What else you need beyond the deposit
The deposit is the biggest number but it is not the only one. Budget for these on top.
Stamp duty
Usually the largest additional cost and the one with the widest variation. Every state and territory offers a first home buyer concession or exemption, but the thresholds, property types and amounts 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. A concession can move your cash requirement by tens of thousands, so confirm it before you set a savings target.
The rest
| 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 deposit plus 5% to 6% of the purchase price, before any first home buyer stamp duty concession. On a $700,000 purchase that is $35,000 to $42,000 on top of whatever deposit you have landed on. If a concession applies, that number drops sharply.
Confirm the exact figures with your conveyancer before you sign a contract. A shortfall discovered a week out from settlement is one of the worst problems to have.
Genuine savings
Most lenders want to see that some of your deposit is what they call genuine savings, typically funds you have accumulated or held for around three months. A deposit made up entirely of a recent gift or grant can slow an application down or narrow which lenders will look at it. Policies differ here more than people expect, and some lenders count rental payment history as an equivalent.
Does a bigger deposit mean you can borrow more?
Not directly, and this trips a lot of people up.
Borrowing capacity is driven by your income, your existing debts and commitments, your living expenses, and the lender’s serviceability buffer, currently an assessment at 3% above the actual rate under APRA’s lending standards. Your deposit is not an input to that calculation.
What a bigger deposit does change is the total you can spend, since purchase price equals deposit plus loan. It also tends to improve your pricing, and a lower assessment rate means the same income services a slightly larger loan. Capitalising LMI works the other way, adding to your debt and trimming the capacity you have left for later.
Keep saving, or buy now?
This is the decision underneath the whole article, and it comes down to four variables.
How fast can you actually save? Use your real monthly surplus, not your optimistic one. At $2,000 a month, the gap between a 5% and a 10% deposit on a $600,000 house is fifteen months.
What is your target market doing? If prices where you are looking are flat or falling, waiting costs you little and improves your position. If they are moving, the goalposts move with them, because a 10% deposit on a rising price is a bigger number every quarter.
How secure is your income? A 95% LVR loan leaves almost no equity buffer, so if your income is variable a larger deposit is worth more than the growth you might miss.
What does the whole cost look like? LMI, stamp duty after any concession, and the difference in what you can borrow. Model both paths before you commit to either.
There is no universally right deposit. There is a right deposit for your income, your timeline and the market you are buying into. That is a modelling exercise, and it should happen before you set a savings target, not after you have spent two years chasing the wrong one.
Frequently asked questions
How much deposit do I need to buy a house in Australia?
Most lenders will consider a home loan from a 5% deposit, and 20% is the level at which lenders mortgage insurance stops applying. On a $600,000 house that is $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 in the range of $17,000 to $25,500 on top, which most buyers capitalise into the loan. If you are 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. If a stamp duty concession applies in your state, that additional figure can fall substantially.
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 would generally be leaning on the 5% Deposit Scheme, a guarantor, or a combination of savings and a first home owner grant. It is worth checking what your borrowing capacity supports before ruling it out.
Is $40,000 enough for a house deposit?
It is 5% of $800,000 and 10% of $400,000, so the honest answer is that it depends entirely on where you are buying and what your income supports. The bigger constraint for most buyers at this level is not the deposit but 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. Places were uncapped from 1 October 2025, so there is no longer an annual limit or a queue. Income caps were removed at the same time. 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 is roughly $8,000 to $13,500. The premium is set by the insurer rather than the lender and varies with loan size, location, loan type and whether you are a first home buyer. Get an actual quote before budgeting off a range.
Next steps
The deposit question almost always turns into a lender question. Minimum deposit, what counts as genuine savings, how LMI is priced, whether a professional waiver applies and which lenders participate in the scheme all vary from one lender to the next, and those differences decide whether you buy this year or in two years.
That is the work a broker does, and it is why Approov compares your position across a panel of 30+ lenders rather than one bank’s view of you. A licensed broker owns the strategy and signs off on the recommendation. The platform is built so you share your details once, see where things stand without chasing anyone, and keep your file open after settlement rather than closing it.
If you want the numbers for your own situation, book a strategy session. We will map what your deposit gets you at each level, what the costs add up to in your state, and whether waiting improves your position or erodes it.
More on the routes into a first home sits on the first home buyers page. If you are still deciding who to talk to first, mortgage broker vs bank covers that comparison honestly.