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

By Andrew Paterson

General information only, not financial, credit or legal advice. It doesn’t consider your objectives, situation or needs. Scheme rules and lender policies change often.

How much deposit do you need to buy a house in Australia? It depends on the loan, the lender and whether you qualify for a government scheme.

The figure most people quote is 20% of the purchase price, because that is usually where lenders mortgage insurance (LMI) drops away. Plenty of buyers get in with 5% or 10%, and eligible first home buyers can now do it with 5% and no LMI.

This guide works through the numbers using a $700,000 home as the example. If you’re still building your savings, our guide to saving a house deposit faster is a good companion read.

What Is LVR (Loan to Value Ratio)?

LVR is the loan amount measured against the value of the property. On a $700,000 property with a $35,000 deposit, you borrow $665,000, which is a 95% LVR.

A bigger deposit means a lower LVR. That usually means less risk for the lender and often sharper pricing for you.

Here is what each common band looks like on a $700,000 purchase:

Deposit	LVR	Deposit on $700k	LMI?
5%	95%	$35,000	Yes, unless you use a scheme or waiver
10%	90%	$70,000	Usually yes
20%	80%	$140,000	Generally no
30%	70%	$210,000	No

Keep in mind that lenders measure LVR against their own valuation. If the valuation comes in below the contract price, your deposit covers a smaller share and your LVR rises.

Why 20% Is the Number Everyone Quotes

A 20% deposit gets you to 80% LVR, where most lenders don’t charge LMI. You skip a cost that can run well into five figures.

It is a guide rather than a rule. Your income, how fast you save and how prices move while you wait all feed into whether holding out for 20% makes sense.

Your Deposit Is Not Your Total Cash Needed

The figure that matters is the cash you need at settlement. On top of the deposit, that usually includes:

• Stamp duty, unless you qualify for an exemption
• Land registry fees for the transfer and mortgage
• Conveyancing or legal fees
• Building and pest inspections
• Lender application or settlement fees, if any

Our guide to settlement day costs in Victoria breaks these down line by line. For what comes after you move in, see our breakdown of the hidden costs of owning a home.

Stamp Duty for First Home Buyers in Victoria

Every state sets its own duty rules, and duty is often the biggest cost after the deposit. In Victoria, eligible first home buyers pay no duty on homes up to $600,000.

Between $600,000 and $750,000 a sliding concession applies, so the discount shrinks as the price rises. From $750,000, first home buyers pay the same duty as everyone else.

On a $700,000 home, general duty is $37,070. The State Revenue Office calculator puts an eligible first home buyer’s duty at $24,713.

Victoria also pays a $10,000 First Home Owner Grant on eligible new homes valued up to $750,000. It does not apply to established homes. Our guide to first home buyer grants and duty concessions in Victoria covers the eligibility rules.

What LMI Costs and How to Avoid It

LMI generally applies once your LVR goes above 80%. It protects the lender. If the home is ever sold for less than the debt, you can still owe the shortfall.

The premium climbs steeply as your deposit shrinks. Using Helia’s published estimator rates, LMI on a $700,000 purchase comes out at roughly:

• 10% deposit ($630,000 loan): about $14,600, or around $16,100 with Victorian duty on the premium
• 5% deposit ($665,000 loan): about $26,400, or around $29,000 with duty

Your lender and insurer will set the actual figure. For more detail, see how lenders mortgage insurance works and what LMI actually covers.

Because the cost jumps between bands, saving a little more can cut the premium noticeably. That saving has to be weighed against how long it takes you to get there.

The main ways to reduce or avoid LMI are:

• Saving a 20% deposit
• Using the 5% Deposit Scheme if you are eligible
• A family guarantee, where a relative’s property secures part of the loan
• An LMI waiver, which some lenders offer to certain professions

How the 5% Deposit Scheme Changed

From 1 October 2025, the First Home Guarantee became the Australian Government 5% Deposit Scheme. Three changes matter most:

• No place limits. The old annual cap of 35,000 places is gone.
• No income caps. The old limits of $125,000 for singles and $200,000 for couples no longer apply.
• Higher price caps. In Victoria the cap is $950,000 for Melbourne and Geelong and $650,000 elsewhere.

Pages still quoting those old limits are out of date. We cover what changed with the income cap in more detail.

Under the scheme, the government guarantees up to 15% of the property value, so eligible buyers can borrow with a 5% deposit and no LMI. Single parents and legal guardians can buy with a 2% deposit.

Each state has its own caps, so check the one for your area on the official price cap page. Both the purchase price and the lender’s valuation need to sit under it.

What the scheme doesn’t change

You still apply through one of the 30-plus participating lenders, and that lender’s credit policy still applies. That includes serviceability, rate buffers and its own rules on where your deposit came from.

The scheme itself doesn’t set a genuine savings period. Many lenders still want to see savings built or held over a few months. If some of your deposit is a gift, read our guide to genuine savings.

A few more points to know:

• If you have saved more than 5%, you may be asked to contribute more than the minimum.
• You can’t combine the scheme with the Help to Buy shared equity scheme.
• State duty concessions and grants have separate eligibility and can apply alongside the scheme.

The Victorian Homebuyer Fund, a state shared equity program, closed to new participants in September 2025. Older articles that list it are out of date.

For a closer look, read how the 5% Deposit Scheme works.

95% Loans Outside the Scheme

If you don’t qualify for the scheme or it doesn’t suit your purchase, many lenders still offer loans up to 95% LVR. The trade-off is LMI, which is usually added to the loan.

That lifts your debt and the interest you pay over time. It is worth comparing against the time it would take to save a bigger deposit.

A Worked Example: $700,000 First Home in Victoria

Say you are an eligible first home buyer purchasing an established $700,000 home in Geelong through the 5% Deposit Scheme. The price sits under the $950,000 cap.

• Deposit at 5%: $35,000
• LMI: $0 under the scheme
• Stamp duty: $24,713 with the first home buyer concession
• Land registry fees: about $1,870 for the transfer and mortgage
• Conveyancing, inspections and lender fees: allow a few thousand dollars, depending on who you use

That puts your cash needed at roughly $62,000 to $65,000 before moving costs. On the 20% path, the deposit alone is $140,000, with the same duty and fees on top.

Because duty is paid in cash, it can matter as much as the deposit. At $600,000 or less, an eligible first home buyer in Victoria would pay no duty at all.

Whether the scheme suits you depends on your income stability, your buffer and your plans. Model both paths and understand how lenders calculate your borrowing power before you settle on a price.

So How Much Deposit Do You Actually Need?

There is no single right amount. As a rough frame:

• 5% can work, and eligible first home buyers can avoid LMI through the scheme
• 10% means a noticeably smaller LMI premium if you are outside the scheme
• 20% generally removes LMI
• 30% or more may open up lower pricing with some lenders

Whichever tier you aim for, budget for duty and fees on top. When you’re ready to test your numbers, our guide to how home loan pre-approval works is a useful next step.

All figures are indicative as at September 2026. LMI estimates are not quotes, and duty and scheme rules can change, so confirm current details with the State Revenue Office and firsthomebuyers.gov.au.

Frequently asked questions

Can I buy a house with less than a 5% deposit?

Single parents and legal guardians can use the 5% Deposit Scheme with a 2% deposit. Other options include a family guarantee, or Help to Buy, which needs a 2% minimum deposit and has income caps.

Is the deposit based on the purchase price or the valuation?

Lenders work from their own valuation, and many use the lower of the valuation and the price. A low valuation can push your LVR into a higher band and change your LMI.

Can a gifted deposit be used?

Often yes, but it depends on the lender. Some accept gifts from immediate family with a signed gift letter, while others want part of the deposit shown as your own savings.

Is LMI paid upfront?

It can be, but it is usually added to the loan. That avoids a cash outlay at settlement, although you pay interest on it over the loan term.

Can I use the 5% Deposit Scheme and the First Home Owner Grant together?

Yes, if you meet the rules for each. The grant only applies to new homes, and the scheme only works through participating lenders.

Does Victoria’s first home buyer duty relief apply to established homes?

Yes. The exemption up to $600,000 and the concession up to $750,000 apply to new and established homes and vacant land, subject to eligibility and residence rules.