Key takeaways:
Many lenders prefer a 20% house deposit, but some buyers may qualify for a home loan with a 5% or 10% deposit.
A 5% deposit on a $700,000 home is $35,000, compared with $70,000 for 10% or $140,000 for 20%, excluding additional purchase costs.
A 20% deposit generally helps you avoid lenders' mortgage insurance (LMI) and reduces the amount you need to borrow.
Eligible buyers may purchase with as little as a 2% deposit through government schemes, while some guarantor loans may not require a cash deposit.
Budget beyond your house deposit for stamp duty, legal fees, inspections and other upfront costs.
A 20% deposit is a common benchmark because it produces an 80% LVR and may help you avoid LMI, although lender policies vary. Some buyers may qualify for a home loan with as little as 5%, depending on lender requirements and eligibility for government schemes. For a $700,000 home, your deposit would be:
20% deposit | 10% deposit | 5% deposit |
|---|---|---|
$140,000 | $70,000 | $35,000 |
These figures exclude additional upfront costs, such as stamp duty and legal fees.
This guide explains how much deposit you need to buy a house, how it affects your home loan and what options are available if you haven't saved 20%.
How much deposit do you need for a house?
Your deposit depends on the property's purchase price and your lender's requirements.
To calculate it, multiply the purchase price by your deposit percentage. For example, a 10% deposit on a $600,000 home is $60,000.
Here's how much you'd need to save for different property prices:
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 |
Aussie tip: These figures exclude additional upfront costs, such as stamp duty and legal fees. Only use these amounts to set a savings target, then check your borrowing power to estimate how much you can borrow.
You might also be interested in: How to save for a house deposit: Tips for first-time buyers
Why do lenders prefer a 20% deposit?
Lenders generally prefer a 20% deposit because it reduces lending risk and typically lets borrowers avoid lender's mortgage insurance (LMI).
A 20% deposit usually means an 80% loan-to-value ratio (LVR), the percentage of a property's lender-assessed value you're borrowing.
For example, an $800,000 home with a $160,000 deposit leaves a $640,000 loan and an 80% LVR, assuming the lender's valuation matches the purchase price.
A larger deposit can offer several benefits:
Avoid LMI: Lender's mortgage insurance protects the lender if you default and they incur a loss. It generally applies when your LVR exceeds 80%, although exemptions may be available. You can pay LMI upfront or add it to your loan, depending on the lender.
Lower borrowing costs: Borrowing less generally reduces repayments and total interest paid, assuming the same rate and loan term.
More loan options: An LVR of 80% or below may make more loan options available, depending on the lender, product and your circumstances.
Learn more about loan-to-value ratios and how to avoid lenders mortgage insurance.
You might also be interested in: LMI waivers for professionals: Who may qualify and how they work
How your deposit size affects your home loan
A smaller deposit increases the amount you need to borrow and your monthly repayments, assuming the same interest rate and loan term.
Here's how different deposits affect repayments on a $700,000 home, based on a 6.25% p.a. interest rate over 30 years.
Deposit | Loan amount | Est. monthly repayment | LMI |
|---|---|---|---|
5% ($35,000) | $665,000 | $4,095 | Generally applies unless exempt |
10% ($70,000) | $630,000 | $3,879 | Generally applies unless exempt |
20% ($140,000) | $560,000 | $3,448 | Generally not required |
Disclaimer: Repayments are illustrative only, based on a 6.25% p.a. interest rate, 30-year term and principal and interest repayments. Figures exclude LMI, fees and other costs. The interest rate is hypothetical and does not represent a loan offer. Actual repayments depend on lender requirements and loan terms.
A 20% deposit reduces monthly repayments by approximately $647 compared with a 5% deposit under these assumptions, excluding any LMI costs. Use Aussie's home loan repayments calculator to compare loan amounts, interest rates and repayment terms.
What other upfront costs do you need to save for?
Beyond your house deposit, you'll need to budget for additional upfront costs, which vary by property, location and lender. Key expenses include:
Stamp duty: Also called transfer duty is a state or territory tax on on certain property transfers. Eligible first-home buyers may receive exemptions or concessions, rates, calculations and concessions vary by location.
Conveyancing and legal fees: Cover contract reviews, property ownership transfers and settlement.
Building and pest inspections: Help identify structural defects, maintenance issues and pest activity before purchasing.
Loan and settlement fees: May include lender application, property valuation and settlement charges.
Moving costs: Include removalists, transport and utility connections.
Cash buffer: Additional savings for unexpected repairs or expenses after settlement.
Use Aussie's stamp duty calculator to estimate your costs and check available concessions in your state or territory.
You might also be interested in: The hidden costs of buying a bigger home in Australia
Can you buy a home with less than a 20% deposit?
Yes. You may be able to buy with a deposit as low as 2% through a government scheme, or potentially without a cash deposit using an eligible family guarantor.
Each option has different eligibility requirements, costs and risks.
Option | Min. deposit | LMI | Who it may suit | Key consideration |
|---|---|---|---|---|
Often 5–10% | Usually applies | Buyers not using a government scheme | Higher borrowing costs | |
5% | No | Eligible first-home buyers | ||
2% | No | Eligible single parents and legal guardians | ||
2% | No | Eligible buyers within income limits | ||
Potentially 0%* | May be avoided | Buyers with eligible family support | Guarantor's property may be at risk |
Aussie tip: Minimum deposits are indicative. Eligibility, lender approval and other purchase costs apply.
* A guarantor may reduce or eliminate the cash deposit required with some lenders, but you’ll still need funds for purchase costs and must meet lender criteria
Standard low-deposit home loans
Some lenders accept deposits of 5–10% without government assistance. Approval depends on your income, debts, credit history, savings and borrowing capacity.
A smaller deposit may mean:
Paying LMI.
Higher interest rates or stricter lending conditions.
Fewer available loan products.
An Aussie Broker can compare low-deposit home loans across Aussie's lender panel and explain the costs and requirements.
You might also be interested in: Can you buy a house with no deposit in Australia?
Australian Government 5% Deposit Scheme
The Australian Government 5% Deposit Scheme allows eligible buyers to purchase with a minimum 5% deposit, or 2% for single parents and legal guardians, without paying LMI.
Expanded on 1 October 2025, the scheme has no income caps, unlimited places and no waiting list. It offers two pathways:
First-home buyers: Australian citizens and permanent residents aged 18 or over who are buying their first home or haven't owned property or land in Australia for at least 10 years.
Single parents and legal guardians: Eligible applicants with at least one dependent child who can buy with a 2% deposit. They don't need to be first-home buyers but cannot retain another property interest after settlement.
Both pathways require an eligible owner-occupied property within the applicable price cap and approval from a participating lender.
The former Regional First Home Buyer Guarantee closed to new applicants on 1 October 2025. Eligible regional buyers can now apply through the expanded scheme.
See Aussie's 5% Deposit Scheme price caps by state for location-specific requirements.
You might also be interested in: The Australian Government 5% Deposit Scheme: Buying with a 5% deposit
Australian Government Help to Buy Scheme
The Australian Government Help to Buy Scheme allows eligible buyers to purchase with a minimum 2% deposit. The government contributes up to 30% of an existing home's purchase price or 40% of a new home's price.
Unlike a deposit guarantee, Help to Buy is a shared equity scheme. The government holds a share of the property's value, which you must eventually repay. Key eligibility requirements include:
Income limits: For 2026–27, taxable income must not exceed $103,000 for individuals or $165,000 for joint applicants and single parents.
Citizenship: Applicants must be Australian citizens aged 18 or over.
Property requirements: The property must be within the applicable price cap and used as your principal place of residence.
Participating lenders: Applications must be made through an authorised participating lender.
Help to Buy cannot be combined with the 5% Deposit Scheme.
The government's equity share changes with the property's value, so the amount repayable may increase or decrease.
You might also be interested in: Help to Buy Scheme: What first home buyers need to know
Guarantor home loans
A guarantor home loan allows an eligible family member, usually a parent, to use equity in their property as additional security for your loan. A guarantor agrees to cover a specified portion of your debt if you cannot meet your repayments.
Depending on the lender, a guarantor arrangement may reduce or eliminate your cash deposit requirement and help you avoid LMI.
Potential benefits | Potential risks |
|---|---|
May reduce the cash deposit required | Guarantor accepts financial obligations |
May help avoid LMI | Guarantor's property may be at risk if you default |
May allow buyers to retain savings | Can affect the guarantor's borrowing capacity |
Both parties should seek independent legal and financial advice before proceeding. An Aussie Broker can explain available guarantor loan options and lender requirements.
Can you use a gifted deposit?
Yes. Some lenders accept money gifted by family members towards a house deposit, subject to lending criteria. You may need to provide:
Gift letter: Confirms the amount and that repayment isn't required.
Proof of funds: Bank statements showing the transfer and, if required, the source of the money.
Savings evidence: Documents demonstrating your savings history, if required by the lender.
Gifted deposits may not satisfy a lender's genuine savings requirements, which assess funds you've saved or held over a specified period.
Check your lender's policy before relying on gifted funds.
You might also be interested in: Financing options for your investment property
Can you use a deposit bond?
A deposit bond replaces the cash deposit normally paid when exchanging contracts, provided the seller accepts it. It may suit buyers whose funds are tied up in another property sale or investment. However, it doesn't reduce the funds required at settlement. Deposit bonds generally involve a fee and require approval.
Check the contract requirements with your conveyancer before arranging one.
You might also be interested in: How deposit bonds help first-home buyers compete in a hot market
How can you save for a house deposit faster?
Setting a savings target, reducing expenses and making regular contributions can help you build your house deposit. Here are five practical steps:
Set a savings goal: Choose a property price range and include estimated upfront costs to calculate how much you'll need.
Review your budget: Track spending and redirect money from non-essential expenses towards your deposit.
Automate savings: Schedule transfers into a dedicated savings account each payday and review your progress regularly.
Compare high-interest savings accounts: Check interest rates, bonus conditions, fees and withdrawal restrictions to find an account that suits your savings plan.
Check government grants: Eligible first-home buyers may qualify for a First Home Owner Grant (FHOG), generally for buying or building a new home. Amounts, eligibility and payment timing vary by state or territory.
Check your state or territory revenue office for current grant requirements before including any assistance in your savings target.
Using the First Home Super Saver Scheme
The First Home Super Saver Scheme (FHSS) allows eligible first-home buyers to save through voluntary super contributions and withdraw eligible amounts, plus associated earnings, towards their first home. Under the scheme, you can:
Contribute up to $15,000 per financial year in eligible voluntary contributions.
Access up to $50,000 in eligible contributions, plus associated earnings, subject to release rules.
Combine savings with an eligible partner, potentially accessing up to $100,000 in combined eligible contributions, plus associated earnings.
You can make before-tax (concessional) or after-tax (non-concessional) contributions. Concessional contributions are generally taxed at 15% within super. The assessable portion of released FHSS funds is taxed at your marginal rate, with a 30% tax offset.
Timing matters: You must obtain an FHSS determination from the Australian Taxation Office (ATO) before signing a property contract. For determinations made on or after 15 September 2024, you can request funds before signing or within 90 days afterwards.
Check the ATO's FHSS rules before contributing or signing a contract.
Aussie tip: General information only. FHSS eligibility, contribution caps, tax treatment and release conditions apply. Consider independent financial and taxation advice before making changes to your super.
You might also be interested in: First Home Super Saver Scheme explained
How can you work out how much deposit you need?
Whether you've saved 5%, 10% or 20%, an Aussie Broker can help you assess your deposit requirements and explore suitable home loan options. Your Aussie Broker can help you:
Assess your borrowing capacity: Review your income, expenses and debts to estimate how much you could borrow.
Compare home loans: Explore options across Aussie's lender panel, including low-deposit loans and potential LMI costs.
Check government scheme eligibility: Identify available schemes and explain their requirements.
Estimate upfront costs: Calculate potential lender fees and other purchase expenses beyond your deposit.
Prepare your application: Explain lender requirements, organise supporting documents and guide you through the application process.
You don't need to have saved 20% to start exploring your options.
An Aussie Broker can help you understand what's possible based on your circumstances, subject to eligibility and lender approval.
