How Much Deposit Do I Need to Buy a First Home in Australia?

1. How much deposit do you need?

A simple way to think about your savings goal:

Property price + applicable buying costs − borrowing capacity = your savings/deposit goal.

A larger deposit generally means borrowing less, which can mean lower repayments. But the deposit is only one part of the overall affordability calculation — your borrowing capacity and other costs matter just as much.

2. Is a 20% deposit required?

No. Here is how deposit sizes actually work in practice:

• 20% is a common target, largely because it typically avoids lenders mortgage insurance.
• It is not universally required.
• Smaller deposits may be possible depending on the lender and your circumstances.
• A higher LVR can result in lenders mortgage insurance (LMI).
• Eligible government schemes may allow a lower deposit.

3. What does a 5% deposit mean?

The Australian Government 5% Deposit Scheme is designed to help eligible first-home buyers purchase sooner. At a high level:

• Eligible first-home buyers may use a minimum 5% deposit.
• The scheme currently has no income caps and no waitlist.
• Eligible buyers using the scheme can avoid LMI under the scheme.
• Property price caps apply by location.
• Your lender still assesses borrowing capacity, credit policy and loan approval.
• Buyers remain responsible for other costs such as stamp duty and legal fees.

This is a summary only — see our Government Help for first home buyers page for current eligibility details and location price caps.

4. Deposit examples: 5%, 10%, 15% and 20%

The following table uses a $700,000 property as a mathematical example only. The deposit shown is simply the percentage of the price; LVR is the remaining share borrowed. These are not recommendations or requirements.

Lender policies vary, so a particular LVR does not automatically mean a loan will or won't qualify for something, or that LMI will or won't apply.

5. Your deposit isn't the only cash you need

Your deposit goes toward the property price, but other costs are usually paid on top of it:

Deposit + applicable buying costs = total cash you may need.

Buying costs can include:

• transfer duty (stamp duty), where applicable
• conveyancing or legal costs
• building and pest inspections
• other applicable purchase costs, such as loan fees and registrations

Our first home buyer costs page breaks these down in detail.

6. How does your deposit affect LVR?

LVR (loan-to-value ratio) compares the amount borrowed with the lender-assessed property value. The examples above show the idea on a $700,000 home: a $35,000 deposit means borrowing $665,000 (a 95% LVR), while a $140,000 deposit means borrowing $560,000 (an 80% LVR).

One nuance: the lender's valuation may not always be identical to the purchase price, which can affect the LVR the lender actually applies.

7. How does your deposit affect LMI?

LMI may apply when you borrow at a higher LVR — for example with a smaller deposit. Whether it applies, and how much it costs, depends on the lender, the loan and your circumstances, so treat any LMI figure as an estimate. Eligible buyers using the Australian Government 5% Deposit Scheme can avoid LMI under that scheme.

Our first home buyer affordability calculator estimates whether LMI is likely for your numbers, and our Government Help page covers the schemes that may help you avoid it.

8. What if I have a small deposit?

If your savings are modest, you may want to investigate:

• the Australian Government 5% Deposit Scheme
• the First Home Super Saver Scheme — eligible voluntary super contributions may be released to help buy your first home, subject to ATO rules and limits
• other applicable government assistance, such as state and territory grants
• lender-specific low-deposit options

This is general information, not a recommendation of any particular product or lender. Check current rules with the official government sources on our Government Help page.

9. How much deposit do you actually need?

Your practical savings target depends on:

• your target property price
• your borrowing capacity
• the buying costs involved
• the deposit size (and LVR) you're aiming for
• whether LMI may apply
• government assistance you may qualify for
• lender requirements

It's worth noting that someone can have a large deposit but still be unable to afford a property if their borrowing capacity is insufficient — the deposit and your borrowing both need to line up.

10. Use the Aus Property Guide calculator

Our first home buyer affordability calculator uses your income, expenses, debts and savings to estimate your:

• borrowing position and maximum estimated property price
• deposit and total cash contribution
• upfront costs
• loan required and LVR
• estimated LMI
• estimated repayments

Once you know your loan amount, the home loan repayment calculator estimates what different rates, terms and repayment frequencies could mean for your repayments.