How Much Deposit Do You Need to Buy a House in Australia? (2026)

The minimum deposit to buy a house in Australia is 5% of the purchase price — but the deposit amount you choose has a significant knock-on effect on Lenders Mortgage Insurance costs, your interest rate, your borrowing power, and which government schemes you can access.

This guide covers every deposit tier from 2% to 20%, what each one actually costs you, the government schemes that let you buy with less, and the genuine savings rules lenders apply regardless of how much you have saved.

Quick answer: 5% is the minimum for most buyers. 20% eliminates LMI. The government's 5% Deposit Scheme (from October 2025, no income cap, no allocation limit) lets eligible first home buyers buy with 5% and no LMI. The Help to Buy shared equity scheme allows as little as 2%.

Use the Dolaro Mortgage Repayment Calculator to model your repayments at any deposit size and purchase price.

The Deposit Tiers Explained

20% Deposit — The Standard Benchmark

A 20% deposit gives you a Loan-to-Value Ratio (LVR) of 80%. This is the industry standard because:

No LMI. Lenders Mortgage Insurance is not required at 80% LVR or below (with most lenders).
Better interest rates. Most lenders reserve their sharpest rates for 80% LVR loans. The rate difference between a 95% LVR and an 80% LVR loan can be 0.5–1.0 percentage points — on a $600,000 loan, that is $3,000–$6,000 per year in extra interest.
Higher approval probability. An 80% LVR borrower presents lower default risk to the lender. Approval is more straightforward and serviceability assessment is less stringent.

What 20% looks like in dollar terms by state (approximate median house price, 2026):

State	Approx. median house price	20% deposit required
NSW (Sydney)	$1,450,000	$290,000
VIC (Melbourne)	$940,000	$188,000
QLD (Brisbane)	$870,000	$174,000
WA (Perth)	$800,000	$160,000
SA (Adelaide)	$780,000	$156,000
ACT (Canberra)	$870,000	$174,000
TAS (Hobart)	$620,000	$124,000

Figures are indicative only — median prices vary significantly by suburb, property type and timing. Always verify current data with CoreLogic or the relevant state's property data source.

For most Australians outside of targeted government schemes, a 20% deposit in Sydney requires saving close to $300,000 in cash before stamp duty, conveyancing, and other upfront costs. This is why low-deposit pathways have become central to how first home buyers enter the market.

10% Deposit — LMI Applies, Rates May Differ

A 10% deposit gives a 90% LVR. Lenders will approve loans at this level but LMI applies. The LMI premium at 90% LVR is significantly lower than at 95% LVR — roughly $10,000–$18,000 on a $600,000 loan depending on the lender, compared to $18,000–$28,000 at 95% LVR.

Some lenders also offer slightly better rates at 90% LVR than 95% LVR, though neither tier matches the rates available at 80% LVR.

When a 10% deposit makes sense: If you are close to 20% but not there yet, pausing to save the extra 10% may take 1–3 additional years depending on income. In a rising market, the value of entering sooner can outweigh the LMI cost. In a flat or declining market, the calculus reverses. There is no universal answer — it depends on your market, savings trajectory, and timeline.

5% Deposit — The Practical Minimum

Most lenders will approve home loans at 95% LVR (5% deposit) subject to:

Meeting the lender's serviceability assessment
The property being assessed at or above purchase price by the lender's valuer
Genuine savings requirements (discussed below)
LMI being paid (either upfront or capitalised into the loan)

LMI at 95% LVR is the most expensive tier. On a $700,000 purchase with a 5% deposit ($35,000), LMI typically adds $20,000–$30,000 to your loan — either paid upfront or added to the loan amount and repaid with interest over the loan term.

The key caveat on 5% deposits: A $700,000 purchase with a 5% deposit means borrowing $665,000. Add LMI capitalised at $25,000 and you are borrowing $690,000. At 6.0% over 30 years, that is approximately $4,140 per month in repayments — versus $3,395 per month on the same purchase price with a 20% deposit and no LMI. Over 30 years, the cost difference compounds significantly.

2% Deposit — Help to Buy Scheme Only

The federal government's Help to Buy shared equity scheme, which launched in late 2025, allows eligible buyers to purchase with as little as a 2% deposit. Under the scheme, the federal government takes an equity stake in the property (up to 40% for new homes, up to 30% for existing homes) and receives a proportional share of any capital gain when the property is sold or the equity is bought back.

Help to Buy eligibility (2026):

Australian citizen, 18+
Income cap: $100,000 for singles, $160,000 for couples or single parents
Must not currently own property
Must intend to live in the property as principal place of residence
10,000 places per year nationally

The trade-off: the government owns a share of your home. If the property rises in value, you share that gain. The scheme is not suited to every buyer — it works best for those who genuinely cannot save a larger deposit and want to enter the market sooner, particularly in lower-to-mid price ranges.

Lenders Mortgage Insurance (LMI) — What It Is and What It Costs

LMI is insurance that protects the lender — not you — if you default on your loan and the property sale does not recover the full loan amount. Despite protecting the lender, the cost is paid by the borrower.

LMI is triggered on any loan with an LVR above 80% with most lenders. The premium is calculated as a percentage of the loan amount (not the purchase price), scaled by LVR tier.

Indicative LMI costs (2026):

Purchase price	Deposit	LVR	Approximate LMI
$600,000	$30,000 (5%)	95%	$18,000–$25,000
$600,000	$60,000 (10%)	90%	$9,000–$14,000
$600,000	$90,000 (15%)	85%	$4,000–$8,000
$600,000	$120,000 (20%)	80%	$0
$800,000	$40,000 (5%)	95%	$25,000–$35,000
$800,000	$80,000 (10%)	90%	$13,000–$20,000

LMI premiums vary by lender and by mortgage insurer (primarily QBE and Helia in Australia). Get a quote from your lender for an exact figure.

LMI can be paid upfront from savings or capitalised (added) into the loan amount. Capitalising LMI means you pay interest on it over the loan term — a $22,000 LMI premium capitalised into a 6.0% 30-year loan costs approximately $47,000 in total repayments. Paying it upfront is always cheaper if you have the cash.

Who is exempt from LMI at high LVR:

Buyers accessing the Australian Government 5% Deposit Scheme — the government guarantee replaces LMI
Professionals in certain occupations (doctors, dentists, lawyers, accountants, engineers) — many lenders waive LMI up to 90% or 95% LVR for these borrowers under professional package loans
Family guarantee loans — where a parent provides equity in their own property as additional security

Government Schemes That Reduce the Deposit You Need

Australian Government 5% Deposit Scheme (from October 2025)

From 1 October 2025, the former Home Guarantee Scheme was expanded and renamed the Australian Government 5% Deposit Scheme. Key changes from the prior version:

No income cap — any income level qualifies (previously capped at $125,000 single / $200,000 couple)
No allocation limit — previously 50,000 places per year; now uncapped
All other criteria still apply: first home buyer, Australian citizen 18+, intend to live in the property, purchase within price caps

Property price caps by state/city (2026):

Location	Price cap
NSW — Sydney, Newcastle, Illawarra	$1,100,000
NSW — other	$800,000
VIC — Melbourne, Geelong	$950,000
VIC — other	$650,000
QLD — Brisbane, Gold Coast, Sunshine Coast	$1,000,000
QLD — other	$700,000
WA — Perth	$850,000
WA — other	$600,000
SA — Adelaide	$750,000
SA — other	$550,000
TAS — Hobart	$600,000
TAS — other	$550,000
ACT	$1,000,000
NT	$600,000

Always verify current caps at housingaustralia.gov.au — price caps are reviewed and may change.

How it works: the government guarantees up to 15% of the loan, so the lender treats the loan as if it has an 80% LVR even though you only have a 5% deposit. No LMI applies. You borrow 95% as normal — the guarantee is not cash and does not reduce your loan balance.

Applications are submitted through participating lenders (CBA, NAB, ANZ, Westpac, and a range of other approved lenders). The mortgage broker can also assist.

Family Home Guarantee — 2% Deposit for Single Parents

Single parents and single legal guardians with at least one dependent child can access the Family Home Guarantee, which allows purchase with a 2% deposit and no LMI. The government guarantees up to 18% of the loan.

Eligibility: Australian citizen 18+, single parent or single legal guardian, at least one dependent child, income up to $125,000. This scheme has an annual allocation of 5,000 places.

First Home Owner Grant (FHOG)

The First Home Owner Grant is a cash payment from state governments to eligible first home buyers purchasing new homes. It is separate from the deposit guarantee schemes and does not reduce the deposit requirement — but it adds to your usable funds at settlement.

Current FHOG amounts by state (2026):

State	FHOG amount	Eligible property
NSW	$10,000	New homes up to $600,000 (or $750,000 if building)
VIC	$10,000	New homes up to $750,000
QLD	$30,000	New homes (all values — confirm current cap)
WA	$10,000	New homes in south-west land division
SA	$15,000	New homes (replaces stamp duty concession)
TAS	$10,000	New homes
NT	$10,000	New homes
ACT	Not available	ACT no longer offers FHOG

FHOG amounts and eligibility criteria change regularly. Verify with your state revenue office before relying on these figures.

Stamp Duty Concessions for First Home Buyers

First home buyers in most states receive either a full exemption or a significant concession on stamp duty, which reduces the cash needed at settlement. This is separate from the deposit but affects your total upfront cash requirement.

For the full state-by-state breakdown of stamp duty concessions, see our guide: First Home Buyer's Guide to Stamp Duty in Australia.

For VIC-specific first home buyer schemes, deposit rules, and the now-closed Victorian Homebuyer Fund, see: How Much Deposit Do You Need to Buy a House in Victoria?

Genuine Savings — What Lenders Actually Require

Having 5% of the purchase price in your bank account is not sufficient on its own. Most lenders require that at least 5% of the purchase price comes from genuine savings — funds that have been held and grown in your name over a period of time, demonstrating savings discipline.

What counts as genuine savings:

Savings held in a personal bank account for at least 3 months (most lenders)
Term deposit funds held for 3+ months
Shares or managed funds held for 3+ months
Equity in an existing property (if you already own one)
Rental history — some lenders accept 12 months of consistent rent payments as evidence of savings capacity in lieu of cash savings

What typically does not count as genuine savings:

Gift funds from family (alone) — a gift can top up a deposit but most lenders require some genuine savings component alongside it
FHOG — the grant arrives at settlement and is not a pre-existing bank balance
Tax refunds received shortly before application
Funds received from selling personal assets very recently
First Home Super Saver Scheme (FHSS) withdrawals — some lenders accept these as genuine savings; others do not

First Home Super Saver Scheme (FHSS): The FHSS allows first home buyers to make voluntary super contributions and then withdraw them (up to $50,000) for a home deposit. The tax advantage is that contributions are taxed at 15% going in (instead of your marginal rate) and withdrawals are taxed at your marginal rate less a 30% offset. For someone on a 34.5% marginal rate, the effective tax on FHSS contributions is 4.5% vs 34.5% on normal savings — a meaningful saving. Applications to release FHSS funds are made to the ATO and funds arrive within approximately 20 business days. Factor this timing into your settlement timeline.

What Deposit Do You Actually Need — The Real Number

The deposit is not the only upfront cash you need. The total funds required to complete a purchase include:

Cost	Typical amount
Deposit (5–20% of purchase price)	$30,000–$290,000+
Stamp duty (varies by state and FHB status)	$0–$40,000+
LMI (if applicable)	$0–$35,000
Conveyancing / solicitor fees	$1,000–$2,500
Building and pest inspection	$500–$1,200
Loan application / establishment fees	$0–$900
Moving costs	$500–$3,000

Worked example — first home buyer in Brisbane, $700,000 new home, 5% deposit, 5% Deposit Scheme:

Deposit: $35,000 (5% of $700,000)
Stamp duty: $0 (FHB new home exemption in QLD under $750,000)
LMI: $0 (covered by government guarantee)
Conveyancing: $1,500
Building and pest: $700
FHOG: $30,000 received at settlement (reduces effective cash needed)
Net cash needed at settlement: approximately $8,200 (after FHOG offset)

Worked example — upgrader in Sydney, $1,200,000 existing home, 10% deposit:

Deposit: $120,000 (10%)
Stamp duty: approximately $49,135 (standard NSW rate, no FHB concession)
LMI: approximately $18,000 (90% LVR)
Conveyancing: $2,000
Building and pest: $1,000
Total cash required: approximately $190,135

Guarantor Loans — Buying with No Cash Deposit

A guarantor loan allows a family member (typically a parent) to use the equity in their own property as additional security for your loan. This can eliminate the need for an LMI-triggering deposit entirely.

How it works: the guarantor's property secures the portion of your loan above 80% LVR. For example, if you are buying a $700,000 property with no deposit, the lender takes security over both your new property and the guarantor's home for the portion above $560,000 (80% of $700,000).

Key risks: If you default, the lender can pursue the guarantor's property. Guarantors must obtain independent legal and financial advice before agreeing. The guarantee can usually be released once you build sufficient equity (typically when you reach 80% LVR through repayments and/or capital growth), at which point the guarantor's property is released.

Guarantor loans are not offered by all lenders and have their own serviceability and property criteria. Speak with a mortgage broker to identify lenders that offer them.

Frequently Asked Questions

What is the minimum deposit to buy a house in Australia?

The minimum deposit for most buyers is 5% of the purchase price. This gives a 95% LVR loan. LMI applies unless you access the Australian Government 5% Deposit Scheme (which replaces LMI with a government guarantee for eligible first home buyers). Some lenders require 10% for certain property types (small apartments, regional properties, or high-density postcodes) — always confirm with your lender.

How much deposit do I need to avoid LMI?

You need a 20% deposit (80% LVR) to avoid LMI with most lenders. Below 20%, LMI applies unless you qualify for the Australian Government 5% Deposit Scheme, the Family Home Guarantee, a professional LMI waiver (for doctors, lawyers, accountants, engineers), or a guarantor loan.

Can I buy a house with 5% deposit in Australia?

Yes. Most lenders approve 95% LVR loans for borrowers who meet serviceability and genuine savings requirements. LMI applies at this LVR unless you access the government's 5% Deposit Scheme, which eliminates LMI for eligible first home buyers. The 5% Deposit Scheme has no income cap as of October 2025.

What is genuine savings and why does it matter?

Genuine savings are funds held in your name for at least 3 months that demonstrate consistent savings behaviour. Most lenders require at least 5% of the purchase price in genuine savings before approving a high-LVR loan. Gift funds, tax refunds, and inheritance received very recently typically don't count as genuine savings on their own — though they can supplement genuine savings to reach a larger total deposit.

Is the First Home Owner Grant counted as part of the deposit?

No — the FHOG is paid at settlement, not before. It arrives too late to form part of the deposit you present to the lender at approval. It reduces your effective out-of-pocket cost at settlement but cannot be counted as the 5% deposit required for loan approval. You still need to demonstrate 5% in genuine savings or other qualifying funds before settlement.

How does the Australian Government 5% Deposit Scheme work?

The scheme allows eligible first home buyers to purchase with a 5% deposit and no LMI. The government guarantees up to 15% of the loan, so the lender treats it as an 80% LVR loan for insurance purposes. The guarantee is not cash — it does not reduce your loan balance. You borrow the full 95% and repay it normally. The scheme has no income cap (from October 2025) and no annual allocation limit. Applications go through participating lenders including all four major banks and many others.

What is the Help to Buy scheme and how does the 2% deposit work?

Help to Buy is a federal shared equity scheme where the government buys an equity stake in your home (up to 40% for new homes, 30% for existing) in exchange for contributing to the purchase price. This allows you to buy with as little as a 2% deposit. When you sell, the government receives its proportional share of the sale price. Income caps apply ($100,000 single, $160,000 couple/single parent). 10,000 places per year are available nationally.

Do I need a bigger deposit for an apartment than a house?

Sometimes — yes. Some lenders apply stricter LVR limits on apartment purchases, particularly for small apartments (under 50 sqm), high-density postcodes, or off-the-plan purchases. In these cases a lender may require a 10–20% deposit even where they would approve a 5% deposit on a house. Always confirm your target property type with the lender before assuming the standard minimum deposit applies.

Can I use my superannuation as a house deposit?

Not directly. Super is generally inaccessible before retirement. The exception is the First Home Super Saver Scheme (FHSS), which allows you to make voluntary contributions to super and later withdraw up to $50,000 for a first home deposit. The tax advantage is significant (contributions taxed at 15%, not your marginal rate) but the process involves an ATO release application with a 20-business-day processing window. Factor this timeline into your purchase plans.

What is the average house deposit in Australia?

The average first home buyer deposit in Australia is approximately $134,000 based on ABS loan data — equivalent to a 20% deposit on the average first home buyer loan size. However, with government schemes many buyers now enter with deposits of 5–10%. The average varies significantly by state: NSW buyers face the highest average deposit requirements due to Sydney's median house price.

This article is general information only and does not constitute financial or legal advice. Deposit requirements, LMI premiums, scheme eligibility, and price caps change regularly. Always verify with your lender, mortgage broker, and the relevant government agency before making decisions. For personalised advice, consult a licensed mortgage broker or financial adviser.