General information only, not financial, credit, legal or tax advice. Lending rules and government schemes change, so check current details with a licensed broker or lender before you decide anything.
It's usually the first question people ask, and the honest answer is: it depends. Some people buy with 2% or 5%. Others wait until they have 20%. Neither is automatically right. What matters is what each option costs you, and what it means for you after you move in.
Here's how I'd think it through.
The short answer
Most lenders will consider a deposit of somewhere between 5% and 20% of the purchase price. Some government schemes go lower. The amount you have changes three things: whether you pay lenders mortgage insurance (LMI), how much you borrow, and which loans and schemes you can use.
To give you a feel for the numbers, here's what different deposits look like on a $700,000 home:
2% deposit: $14,000
5% deposit: $35,000
10% deposit: $70,000
20% deposit: $140,000
That's just the deposit. Your other buying costs, like stamp duty, conveyancing and inspections, come on top.
Why everyone talks about 20%
With a 20% deposit, most lenders won't charge LMI. LMI protects the lender, not you, if you can't repay the loan, and it can cost thousands, or tens of thousands, of dollars. A bigger deposit also means a smaller loan, so lower repayments and less interest over time.
But saving 20% takes time, and prices can move while you're saving. That's why it's worth knowing the other options.
Buying with less than 20%
Plenty of people buy with a 5% to 10% deposit and pay LMI. It's often added to the loan rather than paid upfront, which makes it easier to get in sooner, but you'll pay interest on it too.
Some lenders waive LMI for certain professions, and some offer guarantor loans, where a family member uses equity in their own home as extra security. A guarantor loan can mean a smaller deposit, but it comes with real risk for the person guaranteeing it, so everyone involved should get their own independent advice first.
Government schemes worth knowing about
These change often, so treat this as a starting point and check the official details before you plan around one.
The 5% Deposit Scheme. Eligible first home buyers can buy with a 5% deposit without paying LMI. Since 1 October 2025 there are no income caps and no limit on places, but there are property price caps that depend on where you buy. Single parents and legal guardians may be able to buy with 2%. I've explained how it works in The First Home Guarantee Explained.
Help to Buy. A shared equity scheme that started in December 2025. Eligible buyers can buy with a 2% deposit, and the government takes a share of the home, up to 40% for a new home or 30% for an existing one. There are income limits, price caps and a set number of places each year. You'll need to understand how and when the government's share gets paid back before you go down this path.
The First Home Super Saver Scheme. You can make extra voluntary contributions to your super (up to $15,000 a year and $50,000 in total) and later release them, plus earnings, towards your first home. The tax rules matter here, so it's worth checking with the ATO or an accountant first.
State grants and concessions. Most states offer first home buyer grants, stamp duty concessions, or both. They vary a lot, so check your state or territory revenue office.
Lenders look at more than the deposit
Having the deposit is one part. Lenders will also look at your income, your expenses, your debts (including credit cards and buy now, pay later) and how you've saved. Many want to see genuine savings built up over time, not just a lump sum that's appeared recently.
That's why it pays to talk to a licensed broker early, even if you're not ready to buy yet. They can tell you what lenders will actually want to see from you.
Don't spend every dollar on the deposit
This is the part people skip. On top of the deposit you'll need money for stamp duty (unless you're exempt), conveyancing, inspections, lender fees, insurance and moving. I've listed them all in The Upfront Costs of Buying a Home in Australia.
And I'd want a buffer left over once you've settled. Rates change, things break, and life happens. Owning your home with nothing in the bank is a stressful way to start.
What I'd ask before deciding on a deposit
What would LMI actually cost at my deposit and loan size?
Am I eligible for any government scheme, and what are the trade-offs?
How much would I need for upfront costs on top of the deposit?
How much buffer will I have left after settlement?
What would my repayments be, and could I still manage them if rates went up?
Is it better for me to buy sooner with less, or wait and save more?
There's no single right number. The right deposit is the one that gets you in without leaving you stretched.
If you want to see the whole buying process laid out, start with the free Buying a Home in 9 Steps guide. And if you'd like someone to help you work through your questions before you talk to a broker or lender, that's what our home buyer coaching is for.
Disclaimer: This article is general information and education only. It isn't financial, credit, legal or tax advice, and it doesn't take your personal circumstances into account. Government schemes, eligibility rules, price caps and lending criteria change, and the details here are current to the best of our knowledge as at November 2026. Always check official sources and get advice from licensed professionals, such as a mortgage broker, financial adviser or accountant, before making any decisions. Living Invested is not a credit provider, mortgage broker or financial adviser.
