How much do you need for a house deposit? It’s a question most first home buyers ask early in their journey and the answer depends on more than just the purchase price. Your deposit amount can vary depending on your lender, your income, whether you qualify for government assistance and even the type of property you’re buying.
While it might seem like a daunting figure at first, understanding the basics of how deposits work can make your goal far more achievable than it first appears.
How Much Do You Need for a House Deposit in Australia?
When it comes to the question of “how much do you need for a house deposit,” there’s no one-size-fits-all answer. Most lenders, however, require a deposit of at least 5–20% of the property’s purchase price. So, if you’re buying a home for $600,000, you may need anywhere from $30,000 to $120,000 upfront.
If you’re wondering how much deposit will I need for a mortgage, it depends on
- Your lender’s policies
- The type of loan you apply for
- Whether you’re eligible for government schemes
- Your credit profile and financial history
Generally, a 20% deposit is considered ideal because it allows you to avoid Lenders Mortgage Insurance (LMI)—: a fee charged by lenders when your deposit is under 20%. But don’t worry if you don’t have the full 20%—, many Australians buy with less.
Under the Home Guarantee Scheme, for example, eligible buyers may be able to purchase a property with as little as a 5% (or even 2%) deposit, without needing to pay LMI.
Looking for a Finance Broker?
Click the button to schedule an appointment with our team to discuss your eligibility and options.
Factors That Affect How Much Deposit Is Required to Buy a House
A range of personal and financial factors can influence how much deposit is required to buy a house. Understanding these will give you a clearer idea of what to aim for when setting your savings goal.
Some of the key factors include:
- Property price: Naturally, the higher the price, the higher the deposit needed.
- Loan-to-value ratio (LVR): This is the loan amount expressed as a percentage of the property value. A higher LVR usually means a smaller deposit but may also attract higher costs or stricter conditions.
- Your financial situation: Income stability, savings history, and credit score all play a part in how lenders assess your deposit requirements.
- LMI: If you don’t meet the 20% deposit threshold, your lender may require you to pay LMI, which protects them (not you) if you default on the loan.
How Much Do You Need for a House Deposit If You’re Using a Government Scheme?
So, how much do you need for a house deposit if you’re eligible for a government scheme? It may be significantly less than you think. The First Home Guarantee scheme, for example, allows eligible first home buyers to purchase with as little as a 5% deposit, without having to pay LMI.
Other helpful programs include:
- First Home Super Saver Scheme (FHSSS) – allows you to use voluntary super contributions to save for a home deposit.
- Stamp duty concessions or exemptions – available in some states and territories for eligible first home buyers.
These schemes can reduce the upfront cash required and help you get into your first home sooner. Just be sure to check the eligibility criteria and application deadlines.
What If I Don’t Have a 20% Deposit?
Not everyone can come up with a 20% deposit, especially when buying in high-demand areas. When this is the case, you may ask yourself, how much do I need for a deposit if I don’t have that full amount?
There are a few strategies you can explore:
- Low deposit home loans: Many lenders accept deposits of 5–10%, although LMI may apply.
- Guarantor loans: A family member may be able to use their own property as security to help you avoid LMI and buy with little or no deposit.
- LMI waivers: Some professionals, like doctors, lawyers or accountants, may qualify for LMI waivers with certain lenders.
Working with a great mortgage broker can help you explore all your options and compare lenders willing to work with smaller deposits.
Saving Tips for First Home Buyers
If you’re still building your deposit, here are some practical ways to boost your savings:
- Create a budget: Track your spending and cut non-essential expenses.
- Set up a dedicated savings account: High-interest or bonus saver accounts can help your money grow faster.
- Automate your savings: Set up a recurring transfer to make saving a habit.
- Explore grants early: Knowing which schemes you qualify for can help you set a more accurate target.
- Check your credit score: A good credit score can open the door to better home loan deals.
And if you’ve been asking yourself, “How much do I need for a home deposit?”, these savings strategies can bring you closer to your goal
How Much Do You Need for a House Deposit? Let’s Chat
So, how much do you need for a house deposit? The answer isn’t the same for everyone. To get the answers you need, you should consider getting personalised advice. Every buyer’s situation is different, after all, and the best way to get clarity is to speak with a lending expert who understands your goals.
At Professional Lending Solutions, we help first home buyers understand their options, compare lenders, and get into their first home sooner. Whether you’ve saved a full deposit or are just starting out, we’ll help you explore the best path forward.
Phil’s journey from banking to mortgage brokering reflects a career driven by a commitment to personalised service and tailored financial solutions. With a distinguished background in banking, including roles at NAB, ANZ and Lloyds TSB Bank in the UK, Phil spent 12 years developing expertise in personal and commercial finance, while also completing a Bachelor of Business (Finance), followed by an MBA majoring in International Business.