How Much Deposit Do You Need to Buy a House in Australia? (2026)

The deposit is only half the cash a purchase needs, and knowing the all-in number before you look is what lets you bid with confidence. Pre-approval and a firm ceiling keep every offer within what you can afford.

The short answer

Most Australian lenders need a minimum 5% deposit. To avoid Lenders Mortgage Insurance (LMI), you need 20%. Government schemes for first home buyers can bridge that gap, dropping the LMI-free threshold to 5% (or 2% for single parents) on eligible properties.

Deposit tiers explained

5% deposit

The bare minimum at most banks. You’ll pay LMI (typically $15,000 to $25,000 on a $500,000 to $700,000 loan), and your interest rate may be slightly higher than for a 20% deposit borrower. Eligible first home buyers can skip LMI entirely via the Home Guarantee Scheme.

10% deposit

A common middle ground. LMI is roughly 1.5% to 2% of the loan amount, rather than 3% to 4% at the 5% level. You get a wider choice of lenders and better rates than a 5% deposit would, without waiting another year or two to hit 20%.

20% deposit

The classic “no LMI” benchmark. You get the widest choice of lenders, the sharpest interest rates, and no upfront insurance premium. You also start with more equity, which means a smaller loan and lower repayments.

What LMI actually costs

LMI is a one-off premium that protects the lender (not you) if you default and the sale doesn’t recover the loan. The premium scales with your loan-to-value ratio (LVR).

Indicative LMI on a $600,000 purchase:

• 5% deposit ($30,000): roughly $20,000 to $25,000 LMI
• 10% deposit ($60,000): roughly $10,000 to $13,000 LMI
• 15% deposit ($90,000): roughly $5,000 to $7,000 LMI
• 20% deposit ($120,000): $0 LMI

Run your own price and deposit through our LMI calculator, which adds the stamp duty your state charges on the premium.

Most lenders will let you capitalise LMI into the loan rather than pay it upfront, but you then pay interest on it for the life of the loan. Our Lenders Mortgage Insurance Guide walks through when capitalising makes sense.

All-in cash needed at settlement

Beyond the deposit itself, you need to budget for:

• Stamp duty: $0 to $40,000+ depending on price, state, and first home buyer status. Use our Stamp Duty Calculator for the exact figure.
• Conveyancing or solicitor: $1,500 to $3,000.
• Building & pest inspection: $500 to $1,000.
• Bank application & valuation fees: $400 to $1,200.
• Title transfer & registration: $200 to $400.
• Council and water adjustments: $200 to $1,500 (rates already paid by the seller, prorated).

On a $700,000 house with a 20% deposit and no first home buyer exemptions, plan for about $165,000 to $175,000 in total cash to complete the purchase.

Government schemes (5% & 2%)

5% Deposit Scheme (Home Guarantee Scheme)

The federal government guarantees the gap between your 5% deposit and the 20% LMI threshold for eligible first home buyers. You skip LMI entirely. Since 1 October 2025 there’s no income test and no limit on places, but each area has a price cap. Our 5% Deposit Scheme guide has the caps for every state.

Family Home Guarantee (FHG)

For single parents with at least one dependent, the deposit drops to 2% of the property price, with no income test. Same LMI exemption mechanism and price caps as the 5% Deposit Scheme.

Regional First Home Buyer Guarantee (RFHBG)

Closed. No new regional guarantees have been issued since 1 October 2025; regional buyers use the 5% Deposit Scheme at their area’s price cap.

Our blog post on first home buyer schemes by state covers state grants and stamp duty exemptions on top of these federal schemes.

Genuine savings rule

Most lenders require 5% of the purchase price to be “genuine savings” - money you’ve held in your own name for at least 3 months. The point is to demonstrate you can budget consistently. Gifts and inheritance often don’t count toward this 5%, though some lenders will accept them after a 3-month holding period. Rent paid on time (with a rental ledger) can substitute for genuine savings at some banks.

First Home Super Saver scheme

FHSS lets first home buyers count up to $15,000 of voluntary contributions a financial year (max $50,000 total per person) in super, then withdraw them with deemed earnings for a deposit. Salary sacrifice is taxed at 15% going in rather than your marginal rate, and the release at your marginal rate plus Medicare levy, less a 30% offset. On a $90,000 salary, salary sacrificing $10,000 a year for 3 years leaves $28,098 for the deposit, against $21,392 saved in a bank at 4.5%. A couple can each do it. See the FHSS guide or run your own numbers in the FHSS calculator.

How to save faster

1. Open a high-interest savings account. The 1% to 2% difference between bonus saver accounts and a standard transaction account adds $500 to $2,000 a year on a deposit balance.
2. Auto-transfer on payday. Money you don’t see is money you don’t spend. Treat your deposit savings as a fixed expense.
3. FHSS if you’re a first home buyer. The 15% super tax rate beats most after-tax savings. See our notes above, or try the FHSS calculator.
4. Renegotiate fixed costs. Insurance, energy, mobile, internet, and streaming subscriptions can usually be cut by 10% to 30% with one round of phone calls.
5. Avoid HECS lump sum repayments. Counter-intuitive, but lenders treat HECS as an expense that reduces borrowing capacity. Paying it off helps borrowing power but burns cash you could have used as deposit.

Next steps

Three concrete moves once you know your target deposit:

1. Run the numbers. Use the Borrowing Power Calculator and Stamp Duty Calculator to back into a realistic price range.
2. Get pre-approval. Most lenders give 90-day pre-approval for free. It tells you exactly what you’ll be allowed to borrow at today’s rates.
3. Check the price cap where you’re buying. The 5% Deposit Scheme has no limit on places, but the cap for your area decides which homes qualify.