How Much Deposit Do You Need to Buy a House in Australia? (2026 Guide)
Saving for a home deposit is often the biggest hurdle for Australians looking to enter the property market. While many people believe you need a 20% deposit to buy a home, that isn’t always the case.
Depending on your financial situation, the type of property you’re buying and whether you’re eligible for government assistance, you may be able to purchase a home with as little as a 5% deposit—or even 2% in some circumstances.
In this guide, we’ll explain how much deposit you may need, the costs to consider, and the government support available across Australia.
Is a 20% Deposit Required?
The simple answer is no.
While a 20% deposit is often considered the benchmark because it usually allows borrowers to avoid Lenders Mortgage Insurance (LMI), many Australians purchase their first home with a much smaller deposit.
Generally speaking:
Deposit | What it usually means |
5% | Possible through the Australian Government’s First Home Guarantee (if eligible) or some lender products. |
10% | Common for many buyers, although LMI may still apply. |
20% | Often avoids LMI and may provide access to more competitive lending options. |
Remember, your deposit is only one part of the buying process. You’ll also need to meet a lender’s borrowing criteria, including income, expenses and credit assessment.
What Is Lenders Mortgage Insurance (LMI)?
Lenders Mortgage Insurance is a one-off insurance premium that may apply when you borrow more than 80% of a property’s value.
It’s important to know that LMI protects the lender—not the borrower.
Many buyers choose to pay LMI because it allows them to purchase sooner rather than waiting years to save a larger deposit.
Eligible first home buyers may be able to avoid paying LMI altogether under the Australian Government’s First Home Guarantee Scheme.
How Much Deposit Do You Need?
Here’s an example based on different purchase prices.
Purchase Price | 5% Deposit | 10% Deposit | 20% Deposit |
$600,000 | $30,000 | $60,000 | $120,000 |
$700,000 | $35,000 | $70,000 | $140,000 |
$800,000 | $40,000 | $80,000 | $160,000 |
$900,000 | $45,000 | $90,000 | $180,000 |
$1,000,000 | $50,000 | $100,000 | $200,000 |
These figures don’t include additional purchase costs such as stamp duty, conveyancing and inspections.
Other Costs to Budget For
Many buyers focus solely on their deposit and forget about the additional expenses involved in purchasing a home.
Depending on your situation, you may also need to budget for:
· Stamp duty (where applicable)
· Conveyancing and legal fees
· Building and pest inspections
· Loan establishment fees
· Government registration fees
· Moving costs
· Home and contents insurance
The exact costs vary depending on the property price and the state or territory where you’re buying.
Australian Government Assistance
The Australian Government offers several initiatives designed to help eligible home buyers enter the market sooner.
These include:
First Home Guarantee
Eligible first home buyers may be able to purchase with just a 5% deposit, without paying Lenders Mortgage Insurance. The Government guarantees part of the loan, helping buyers enter the market sooner.
Family Home Guarantee
Eligible single parents or legal guardians may be able to purchase a home with a 2% deposit, subject to the scheme requirements.
Eligibility criteria, property price caps and participating lenders apply.
First Home Buyer Assistance by State
While the Home Guarantee Scheme is available nationally, each state and territory also offers its own grants, concessions and stamp duty relief.
Victoria
Eligible first home buyers may receive:
· $10,000 First Home Owner Grant for eligible new homes valued up to $750,000.
· Stamp duty exemptions or concessions on eligible properties.
· First Home Guarantee access through participating lenders.
New South Wales
Eligible buyers may access:
· Stamp duty exemptions or concessions on eligible purchases.
· First Home Owner Grant for eligible new homes.
· Australian Government Home Guarantee Scheme.
Queensland
Eligible buyers may have access to:
· First Home Owner Grant for eligible new homes.
· Stamp duty concessions depending on the property.
· First Home Guarantee Scheme.
South Australia
Eligible first home buyers may benefit from:
· First Home Owner Grant for eligible new homes.
· Stamp duty relief on eligible new homes.
· Australian Government Home Guarantee Scheme.
Western Australia
Support may include:
· First Home Owner Grant.
· Transfer duty concessions for eligible buyers.
· First Home Guarantee Scheme.
Tasmania
Eligible buyers may be able to access:
· First Home Owner Grant.
· Stamp duty concessions.
· Australian Government Home Guarantee Scheme.
Australian Capital Territory
Support may include:
· Stamp duty concessions for eligible buyers.
· First Home Guarantee Scheme.
· Other territory-based assistance programs.
Northern Territory
Eligible buyers may have access to:
· First Home Owner Grant.
· Territory assistance programs.
· Australian Government Home Guarantee Scheme.
Can You Buy with Less Than 5%?
In most cases, buyers are expected to contribute a genuine deposit.
However, depending on your circumstances, lenders may also consider options such as:
· Family guarantees.
· Equity in another property.
· Certain government assistance programs.
The most suitable option depends on your financial circumstances and lender requirements.
How a Mortgage Broker Can Help
Working out how much deposit you need isn’t always straightforward.
A mortgage broker can help you:
· Calculate how much you’ll need to save.
· Understand your borrowing capacity.
· Compare loans from multiple lenders.
· Explain government assistance that may be available.
· Help you prepare for pre-approval.
Getting the right advice early can make your home-buying journey much smoother.
Ready to Start Your Home Buying Journey?
Whether you’ve saved 5%, 10% or 20%, understanding your finance options is the first step towards buying with confidence.
At Homefront Mortgages, we help Australians compare home loans from a wide range of lenders and guide them through every stage of the borrowing process.
Contact Homefront Mortgages today for a free, no-obligation consultation and find out how much you could borrow.
Disclaimer
This article provides general information only and does not constitute financial, legal or tax advice. Lending criteria, government schemes and eligibility requirements may change and vary depending on your personal circumstances. You should seek independent professional advice before making fin
