The deposit is the single biggest hurdle for most Australian home buyers. Here is exactly how much you need, what happens if you have less, and how to maximise your position in 2026.
Minimum Deposit Required
What Does 20% Deposit Look Like on Real Properties?
| Property Price | 5% Deposit | 10% Deposit | 20% Deposit |
|---|---|---|---|
| $500,000 | $25,000 | $50,000 | $100,000 |
| $700,000 | $35,000 | $70,000 | $140,000 |
| $900,000 | $45,000 | $90,000 | $180,000 |
| $1,200,000 | $60,000 | $120,000 | $240,000 |
The Cost of Going Below 20% — LMI Explained
Lenders Mortgage Insurance (LMI) is a one-off cost paid when your deposit is less than 20% of the property value. It protects the lender, not you. The cost varies by lender and LVR but for a $700,000 loan at 90% LVR, expect to pay $15,000–$22,000.
LMI can be capitalised into the loan (added to your loan balance) or paid upfront. Capitalising it means you pay interest on it over the life of the loan, increasing total cost significantly.
First Home Guarantee — Buy With 5% and No LMI
The federal government’s First Home Guarantee allows eligible first home buyers to purchase with just 5% deposit and no LMI. The government guarantees the remaining 15%, meaning lenders treat the loan as if you had a 20% deposit. Places are limited — 50,000 per year — and income caps apply ($125,000 individual, $200,000 couples).
Genuine Savings — What Lenders Actually Want to See
Most lenders require your deposit to be “genuine savings” — money held in a bank account for at least 3–6 months. Gifts from family, first home buyer grants, and proceeds from selling assets may or may not count depending on the lender. Ask your broker specifically about genuine savings requirements.
How Long to Save a Deposit?
| Monthly Savings | 5% on $650k | 10% on $650k | 20% on $650k |
|---|---|---|---|
| $1,500/mo | 21 months | 43 months | 87 months |
| $2,500/mo | 13 months | 26 months | 52 months |
| $3,500/mo | 9 months | 19 months | 37 months |
Calculate Your Borrowing Power
See how much you can borrow based on your deposit, income and expenses.
Disclaimer: General information only. Not financial advice. Always consult a licensed professional before making financial decisions.