Buying property

How much deposit do I need to buy a home?

How deposit size, purchase costs and LVR affect an Australian home-loan application.

Short answer

A 20% deposit plus purchase costs can avoid lender's mortgage insurance in many standard applications, but some lenders accept deposits as low as 5%. Eligible government schemes may allow a smaller deposit. Approval, price limits and eligibility rules still apply.

Budget for more than the deposit

Your cash contribution may also need to cover stamp duty, conveyancing, inspections, loan fees and moving costs. Keep an emergency buffer rather than using every dollar at settlement.

A smaller deposit means a higher loan-to-value ratio.
Higher LVR lending can cost more and face tighter policy.
The lender uses its valuation, which may differ from the price.
Grants and schemes have separate rules and property limits.

Calculate the complete contribution

Start with the purchase price and target LVR, then add transaction costs and a cash reserve. If family support or a guarantee is involved, obtain independent legal advice before anyone commits.

A deposit example

On a $700,000 purchase, a 20% deposit is $140,000 and the loan is $560,000 before any capitalised costs. A 10% deposit is $70,000 and the loan is $630,000, but LMI and different pricing may apply. Stamp duty and other purchase costs are usually additional. The lender also uses its accepted value. If that valuation is $680,000, the effective LVR is higher and the cash contribution may need to increase.

Genuine savings and gifted funds

Some lenders require part of a high-LVR deposit to be held or accumulated as genuine savings over a set period. A gift, inheritance or sale of an asset may still be acceptable, but the lender may ask for evidence and confirmation that the money is not repayable. If parents lend the funds, that obligation may affect borrowing capacity. A family guarantee is different again and exposes the guarantor's property, so all parties should receive independent legal advice.

Smaller-deposit pathways

Government guarantees and shared-equity programs can reduce the deposit required for eligible buyers, but each has income, property, occupancy and price rules. Availability can change, and not every lender participates. A smaller deposit also means a larger loan and less starting equity. Compare the repayment and long-term plan, not only the speed of entry. Keep enough money for inspections, conveyancing, moving and urgent repairs rather than using every available dollar as the deposit.

Questions to ask before you proceed

Which approval conditions and property checks are still outstanding?
How much cash is required for the deposit, purchase costs and a sensible buffer?
Does the lender have restrictions on this property type, title, size or location?

Key takeaway

Aim for a deposit that leaves enough cash for costs and a buffer – not just the minimum a lender may accept.

Official guidance: Moneysmart: Save for a house deposit

This is general information, not personal financial, tax or legal advice. Lending criteria, fees and eligibility vary.

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