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

The short answer: you need 5% to 20% of the purchase price

Lenders talk about deposits using the loan to value ratio, or LVR. It sounds technical but it is simple: LVR is the share of the property's value you borrow. Buy an $800,000 home with a $160,000 deposit and you borrow $640,000, which is 80% of the value, so your LVR is 80%.

Here is how deposit sizes usually play out:

• 20% deposit (80% LVR): no LMI. This is the benchmark lenders treat as low risk.
• 10% to 19% deposit: most lenders will approve you, but LMI usually applies.
• 5% to 10% deposit: still possible with most mainstream lenders, with a larger LMI premium, unless a government scheme removes it.
• Under 5%: generally guarantor territory, or the 2% single-parent stream of the government scheme.

Most mainstream lenders will lend up to 95% LVR to owner occupiers, so 5% is the practical minimum deposit outside government schemes. That 95% ceiling is market practice, not a regulator's rule. And remember that the deposit is only half the test: as at 2026, APRA requires banks to check you could still afford the repayments if your interest rate rose by 3 percentage points. Your income and spending shape your borrowing power just as much as your savings do.

Why a 20% deposit is the benchmark

Twenty per cent is not a law. It is simply the point where the lender's risk drops enough that they stop asking you to pay for insurance.

Hitting 20% brings three real benefits:

• No LMI. At 80% LVR or below, lenders do not normally charge lenders mortgage insurance. That can keep many thousands of dollars in your pocket.
• A smaller loan. Every extra dollar of deposit is a dollar you do not borrow, which means lower repayments and less interest over the life of the loan.
• An equity buffer. If property values dip after you buy, a 20% deposit makes it far less likely you will owe more than the home is worth.

The catch is time. On an $800,000 home, 20% is $160,000 before a single extra cost, and saving that can take many years. That is why plenty of buyers weigh a different trade: buy sooner with a smaller deposit and accept LMI, use the government's 5% Deposit Scheme, or ask family to guarantee part of the loan. None of these paths is automatically better. It depends on your savings, your income and how prices move in your area, so treat 20% as a target, not a rule.

What is LMI and how much does it cost?

Lenders mortgage insurance is an insurance policy your lender takes out when your deposit is under 20%. You pay the premium, but here is the part that surprises people: LMI protects the lender, not you. If you default and the sale of your home does not cover the debt, the insurer pays the lender, and the insurer can then chase you for the shortfall.

How much does it cost? LMI typically runs at roughly 1% to 5% of the loan amount. As an indicative 2026 guide:

• On a $600,000 property with a 10% deposit (90% LVR), expect roughly $8,000 to $12,000.
• Push to a 5% deposit (95% LVR) and the premium on a similar purchase rises to roughly $15,000 to $20,000.

Australia has two main LMI providers, Helia and QBE, and every lender prices differently. Premiums move with your LVR band, loan size and borrower profile, so treat every figure you read as a range, never a quote.

Most lenders also let you capitalise the premium, which means adding it to your loan instead of paying it upfront. That keeps cash in your pocket on settlement day, but you then pay interest on the premium for the life of the loan, so it costs more in the long run.

How much deposit you need at $600,000, $800,000 and $1 million

Here is what different deposit sizes look like in dollars at three common price points. The loan amount is simply the price minus your deposit.

Three things to keep in mind when you read this table:

• LMI applies below 20% unless the 5% Deposit Scheme or a guarantor removes it. On the $600,000 home with a 10% deposit, that is an indicative $8,000 to $12,000 on top.
• These are deposit figures only. Stamp duty, conveyancing and inspections come on top, and in some states the duty on an $800,000 home can rival the 5% deposit itself.
• Scheme price caps matter at $1 million. A $1,000,000 purchase fits under the 5% Deposit Scheme cap in some cities but not others, so check your area before you count on a $50,000 deposit.

Buying with 5%: the Australian Government 5% Deposit Scheme

The federal scheme formerly known as the Home Guarantee Scheme is now called the Australian Government 5% Deposit Scheme, and its official home is firsthomebuyers.gov.au. It lets eligible first home buyers purchase with a minimum 5% deposit and pay no LMI, because Housing Australia guarantees up to 15% of the property's value to the lender.

The scheme changed in a big way on 1 October 2025: there are now no income caps, no annual place limits and no waitlist. Every eligible first home buyer with a 5% deposit can apply. Eligible single parents and single legal guardians can buy with as little as a 2% deposit under the scheme's single-parent stream.

Price caps still apply, and they depend on where you buy. These caps took effect on 1 October 2025:

Darwin's cap rose from $600,000 to $750,000 on 1 July 2026, while the rest of the NT stays at $600,000. Caps can differ within a single state, so run your postcode through the lookup tool on the official site before you set your budget. And remember: the scheme shrinks your deposit and removes LMI, but you still pay stamp duty (unless your state exempts you), conveyancing and inspection costs.

Guarantor loans: using family equity instead of a bigger deposit

A guarantor loan (often called a family security guarantee) lets a close family member, usually a parent, pledge equity in their own property as extra security for your loan. Because the lender now holds security over two properties, you can typically borrow up to around 100% of the purchase price, sometimes plus costs, with no LMI at all.

A few features make this less scary than it first sounds:

• The guarantee is usually limited, covering roughly the top 20% to 25% of the purchase price rather than the whole loan.
• The guarantor can usually be released once your loan falls below 80% of the property's value, which typically takes 3 to 7 years of repayments and price growth. You generally need to ask your lender for the release, and a new valuation may be required.

But the risk is real, and it sits with the guarantor. If you default and the sale of your home does not cover the debt, the lender can pursue the guarantor for the guaranteed amount, and that claim is secured against the guarantor's own property. This is why guarantors should get independent legal and financial advice before signing, and why the conversation with your family needs to cover the worst case, not just the happy path.

Genuine savings: why lenders check where your deposit came from

A big deposit is not always enough on its own. When your LVR climbs above roughly 85% to 90% (the trigger varies by lender), most lenders also want to see that about 5% of the purchase price is genuine savings: money held or built up in your own name for at least 3 months.

What usually satisfies the rule:

• Money you have saved steadily and held in your own accounts for at least 3 months.
• As a substitute, many lenders accept 6 to 12 months of clean rental history paid through a real estate agent.

What usually does not count straight away: gifts from family, inheritances and other windfalls. These generally do not count until they have been sitting in your account for the required period. The point of the rule is simple: lenders want proof you can consistently put money aside, because that is the same habit that pays a mortgage.

Every lender writes its own policy on the trigger LVR, the holding period and rental history. If your deposit includes a gift, this is exactly the kind of detail a mortgage broker can match to the right lender's policy.

Stamp duty: the biggest cost on top of your deposit

Stamp duty (officially transfer duty) is a state tax on property purchases, and it is usually the largest upfront cost after the deposit itself. Without concessions it is genuinely large: on an $800,000 home, third-party calculators put it at roughly $31,000 in NSW and roughly $43,000 in Victoria in 2026. States index their rates over time, so always use your state revenue office's calculator for an exact figure.

The good news is that every state and territory offers first home buyers some relief, though the rules differ sharply. As at mid 2026:

• NSW: full exemption on new or existing homes up to $800,000, with a concession up to just under $1,000,000.
• Victoria: exemption up to $600,000, concession from $600,001 to $750,000.
• Queensland: zero duty on new homes with no price cap, and zero duty on established homes up to $700,000 with a sliding concession to $800,000. From 1 August 2026 these concessions are limited to Australian citizens, permanent residents and specified foreign retirees.
• WA: no duty up to $500,000, concessions up to $700,000 in Perth metro and Peel and up to $750,000 in regional WA. A 2026 Budget proposal would lift these thresholds, so check wa.gov.au for the current law.
• SA: zero duty on new homes with no value cap, but no first home buyer relief at all on established homes.
• Tasmania: the established-home exemption ended for settlements after 30 June 2026, so check the State Revenue Office of Tasmania for what applies now.
• ACT: from 1 July 2026 eligible buyers pay no duty and there is no income test (you must not have owned property in the past 5 years and must live in the home for at least a year).
• NT: the headline support is grants: $50,000 for building or buying a new home (contracts before 30 September 2026) and $10,000 for established homes. Confirm duty rules with the Territory Revenue Office.

Rules like these change with every state budget, so confirm with your state revenue office before you sign a contract.

Other upfront costs to budget beyond your deposit

Your deposit and stamp duty are the big two, but they are not the whole bill. Budget for these as well:

• Conveyancing: typically $800 to $2,500 in professional fees in 2026 (licensed conveyancers roughly $800 to $1,600, solicitors roughly $1,200 to $2,500 or more), plus $200 to $600 in disbursements for searches and certificates.
• Building and pest inspection: typically $400 to $800 for a standard house, and more for large or prestige properties. Never skip this one. It is cheap insurance against very expensive surprises.
• Lender fees: application and valuation fees vary by lender, so ask before you apply.
• Moving costs: removalists, utility connections and all the small things that add up in the first month.

One trap worth naming: buying through the 5% Deposit Scheme does not make these costs disappear. The scheme shrinks your deposit and removes LMI, and that is all. Scheme buyers still pay stamp duty (unless their state exempts them), conveyancing and inspections, so the real amount you need saved is always more than the deposit line alone.

Getting that full number clear early is the whole game. Byrz offers free tools that build a loan profile, estimate your borrowing power and connect you with a broker when you are ready, so you can see your complete upfront picture before you fall in love with a listing.

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