How much deposit do I need to buy a home in Australia?
Understand Australian home-deposit options, LVR, government 5% and 2% pathways, LMI estimates and separate purchase costs, with worked deposit examples.
Your deposit depends on property value, the lender, any approved guarantee and purchase costs. A larger deposit reduces borrowing, but saving longer also has costs and risks. This guide separates deposit arithmetic from lender eligibility and premium quotes.
Last reviewed:
What is a home deposit?
A home deposit is the portion of the purchase price you pay upfront from your own savings. It is the difference between the purchase price and the amount you borrow from the lender.
For example, on a $700,000 property with a $70,000 deposit (10%), you would borrow $630,000 from the lender. Your deposit is your equity in the property from day one.
A lender may ask for evidence of genuine savings and how your deposit was accumulated. Definitions, evidence periods and alternatives differ by lender and product.
Genuine savings can include:
- Regular salary deposits supported by account statements
- Term deposits that have matured
- Gifted funds from immediate family (with a signed letter confirming it is a gift, not a loan)
- Proceeds from the First Home Super Saver Scheme (FHSSS)
- Equity from an existing property
Ask your lender which sources of deposit it accepts, including gifts, and whether a genuine-savings requirement applies. Do not assume a universal minimum percentage.
Minimum deposit requirements by lender
The minimum deposit varies by lender and loan product, but the general rules are:
5% deposit (95% LVR)
A 5% deposit means 95% LVR before any financed charges, assuming the valuation matches the price. Some products permit this subject to approval. LMI may apply unless a guarantee or lender-specific waiver is approved; obtain a written premium quote.
20% deposit (80% LVR)
A 20% deposit commonly avoids LMI if the lender valuation supports 80% LVR. The lender’s product conditions still determine the actual requirement.
2% deposit — Family Home Guarantee
Eligible single parents or legal guardians can use a minimum 2% deposit through the Australian Government 5% Deposit Scheme. Property caps, ownership and participating-lender conditions apply; check the official eligibility rules.
0% deposit — specialist products
Some lenders offer guarantor loans where a family member uses their own property equity as security for part or all of your deposit. Additional security may change the deposit requirement, but lender approval and purchase costs still apply. The guarantor’s property can be at risk if you default.
Deposit by property price — worked examples
| Property price | 5% deposit | 10% deposit | 20% deposit |
|---|---|---|---|
| $500,000 | $25,000 | $50,000 | $100,000 |
| $600,000 | $30,000 | $60,000 | $120,000 |
| $700,000 | $35,000 | $70,000 | $140,000 |
| $800,000 | $40,000 | $80,000 | $160,000 |
| $1,000,000 | $50,000 | $100,000 | $200,000 |
LMI — the cost of a small deposit
LMI can be an additional purchase cost when required by the lender. It protects the lender; its amount and any waiver depend on the product.
Calcy uses illustrative premium bands, a model allowance of 10% and rounding to the nearest $100. These are not insurer quotes or verified state insurance-duty rates. Actual premiums, charges, capitalisation limits and waivers depend on the lender and insurer. First-home-buyer status alone does not remove the model premium.
For a $700,000 property, 5%, 10%, 15% and 20% deposits are $35,000, $70,000, $105,000 and $140,000. They imply 95%, 90%, 85% and 80% LVR before capitalised charges. Obtain a lender premium quote and keep duty and other purchase costs separate.
Upfront costs beyond the deposit
Your deposit is not the only upfront cash you need. When budgeting to buy a home, you must account for these additional costs:
Stamp duty
Stamp duty is a state government tax on property transfers. Depending on your state and whether you are a first home buyer, stamp duty can range from $0 to over $30,000. Use Calcy’s stamp duty calculator for a planning estimate and confirm the assessment with the revenue office.
Legal and conveyancing fees
Obtain a written conveyancing quote, including searches, disbursements and settlement costs. The sample budget below uses an illustrative input, not a market fee quote.
Building and pest inspections
Obtain building and pest inspection quotes for the property and check what the inspection covers. Include the actual quotes in your purchase budget.
Loan application and valuation fees
Ask for written loan application, valuation and settlement charges, including any conditions for a waiver. Use actual quotes in your budget.
Lenders Mortgage Insurance (if applicable)
If the lender requires LMI, allow for the quoted premium separately. Approved guarantees or lender-specific waivers can change the requirement.
Moving and connection costs
Obtain removalist and utility connection quotes. Include them separately from the deposit and duty.
| Cost item | Estimated amount |
|---|---|
| Deposit (10%) | $70,000 |
| Stamp duty (NSW ordinary duty, no relief) | $25,687 |
| Conveyancing | $1,500 |
| Inspections | $1,000 |
| Loan fees | $500 |
| Moving costs | $2,000 |
| Illustrative Calcy LMI model (lender quote required) | $8,200 |
| Total illustrative cash budget | $108,887 |
Government schemes that reduce your deposit requirement
Australian Government 5% Deposit Scheme
Allows eligible first home buyers to purchase with as little as 5% deposit without paying LMI. The guarantee is not a cash deposit; lender valuation and other scheme conditions apply. Property price caps apply and vary by state and region.
Single-parent and legal-guardian pathway
Eligible single parents or legal guardians may qualify for a minimum 2% deposit under the Australian Government scheme. Confirm current eligibility and lender requirements; historical income caps are not the current scheme rules.
First Home Super Saver Scheme (FHSSS)
FHSS can count up to $15,000 of eligible voluntary contributions a year and $50,000 across years. Release includes 85% of eligible concessional and 100% of eligible non-concessional contributions plus deemed earnings. Check an ATO determination, tax and release timing.
Regional First Home Buyer Guarantee
The expanded Australian Government 5% Deposit Scheme covers eligible regional purchases. Check the current postcode price cap and eligibility; do not use historical regional place quotas.
How to save a deposit faster
Set a target and track it
Knowing exactly how much you need is the first step. A $600,000 property with a 10% deposit needs $60,000. If other purchase costs are assumed to total $20,000, the illustrative target is $80,000; use state duty calculations and actual quotes. Break that into monthly targets.
Use the First Home Super Saver Scheme
FHSS tax outcomes depend on contribution tax, the releasable proportion, associated earnings and tax on release. A contribution is not a tax-free withdrawal, and its full marginal tax amount is not a guaranteed saving. Obtain an ATO determination and check deadlines.
Reduce housing costs
Compare your actual housing costs before and after a possible move or shared accommodation, including moving expenses. Use the difference in your savings plan rather than assuming a standard monthly saving.
Cut high-interest debts first
Paying off credit cards and personal loans improves both your savings rate and your borrowing power. The interest saved is effectively 'risk-free return'.
Consider a family guarantor
If a family member has property equity, a guarantor loan can eliminate the need for a large deposit while you save. The amount and extent of the guarantee depend on the agreement; obtain independent legal advice before putting a family property at risk.
Use Calcy's borrowing power calculator to see how your deposit and income translate into a purchase price.
Deposit FAQs
Can I use a gift from family as my deposit?
Gifted funds may be accepted subject to the lender’s evidence and genuine-savings requirements. Ask what documents and savings history it needs; no universal percentage applies.
Does my deposit affect my interest rate?
Indirectly, yes. A larger deposit (lower LVR) generally qualifies you for lower advertised rates. Some lenders price loans by LVR band, but a lower LVR does not guarantee the lowest rate. Compare current quotes, fees and product conditions.
Can I use my deposit for other costs?
Your deposit directly funds the purchase — it reduces the loan amount. Upfront costs like stamp duty and legal fees must be in addition to your deposit. You cannot redirect deposit funds to cover these.
Key takeaways
- There is no universal minimum: eligible government pathways allow 5% or 2%, and lender-specific security arrangements differ. A 20% deposit commonly avoids LMI subject to valuation and product conditions.
- LMI is lender-specific. Calcy provides an illustrative model rather than a verified insurer premium quote.
- Budget duty, legal costs, inspections, loan charges and moving costs separately using current quotes; no universal dollar range applies.
- The Australian Government 5% Deposit Scheme allows 5% deposits without LMI for eligible buyers
- Family guarantees depend on lender requirements and expose the guarantor to financial risk
- Use the First Home Super Saver Scheme to save your deposit at a lower tax rate
Sources
Australian Government 5% Deposit Scheme — eligibility
ATO — First Home Super Saver Scheme
Put your own savings timetable into the Deposit Savings Tracker. Keep upfront buying costs in the separate Budget Planner.
Frequently asked questions
What is the minimum home deposit in Australia?
There is no universal minimum. Eligible first-home buyers can use the government 5% pathway, eligible single parents or legal guardians can use the 2% pathway, and additional-security arrangements depend on the lender. Check purchase costs and all eligibility conditions separately.
How much deposit do I need to avoid LMI?
A 20% deposit commonly avoids LMI at a supported 80% LVR. Approved government guarantees, additional security or lender-specific waivers can avoid LMI at higher LVRs.
Can I use super to save my deposit?
FHSS has $15,000 annual and $50,000 total eligible-contribution limits. The releasable amount uses 85% of concessional and 100% of non-concessional contributions plus deemed earnings, subject to ATO determination and tax. It is not a promise of a $50,000 cash release.
Do I need genuine savings for a home loan?
Requirements differ by lender and product. Ask what evidence of savings, gifts or rental history it accepts and over what period. There is no universal percentage or savings-history period established by this guide.
Can a family member help with my deposit?
Yes. Family members can gift funds (with a signed gift letter) or act as guarantors using their property equity. The amount of security, deposit, approval conditions and guarantee obligations depend on the agreement; obtain independent legal advice.
General information and estimates, not personal financial advice. Check assumptions and official sources before making decisions.