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

🤔 The honest answer🔗

There isn't a single required percentage, lenders will approve loans anywhere from around 5% to 20%+ deposit, the real question is which trade-off you're willing to make: a smaller deposit gets you into the market sooner but usually costs more overall, through LMI, a larger loan, and more interest over time.

📏 The 20% benchmark, and why it exists🔗

20% is the deposit level at which most lenders stop requiring Lenders Mortgage Insurance. Below that, your loan-to-value ratio (LVR) exceeds 80%, and the lender's insurance requirement kicks in to cover their own risk.

🏛️ Buying with less: government schemes🔗

The Australian Government's Home Guarantee Scheme, run through Housing Australia, lets eligible first home buyers purchase with a deposit as low as 5% (2% for eligible single parents and legal guardians) without paying LMI, the government guarantees the gap to the lender instead. As of the scheme's October 2025 expansion, income caps and annual place limits were removed for the First Home Guarantee, though property price caps still apply and vary by location.

Because eligibility and price caps are genuinely regional and change over time, always check your specific situation on the official Housing Australia or First Home Buyers Australia site before relying on a figure you've seen elsewhere.

There's also a second, quite different government scheme worth knowing about: the Help to Buy scheme. Where the Home Guarantee Scheme just guarantees part of your loan, Help to Buy actually has the government co-invest up to 40% of the purchase price, letting you buy with as little as a 2% deposit in exchange for sharing future capital gains.

Pooling a deposit with a friend or sibling is another way people are getting over this line faster, and the government's 5% Deposit Scheme is now open to eligible friends and siblings buying together, not just couples. If that's a path you're weighing up, our guide to co-buying property in Australia covers the ownership structure, the co-ownership agreement, and the mortgage liability risks you need to sort out first.

👨‍👩‍👧 The other common path: family help🔗

🎯 The essential: Family help with a deposit isn't rare or embarrassing, it's now part of how roughly 1 in 5 first home buyers actually get there.

Alongside government schemes and personal saving, family assistance has become a genuinely mainstream third path. Finder's First Home Buyer Report found almost one in five first home buyers (17%) relied on financial help from parents to save their deposit, up from 11% just a few years earlier, and separate research puts the average parental deposit gift at just over $74,000, a figure that's risen steadily. Most of that help now comes with no expectation of repayment at all, a shift from earlier years when informal family loans were more common than outright gifts.

It's worth being upfront about what this means practically: for a meaningful share of buyers, comparing "save it yourself" against "use a government scheme" leaves out the option a lot of actual buyers are using. If family help is genuinely on the table, it's worth having that conversation early and honestly, including how a gift (versus a loan) might affect eligibility for schemes that require "genuine savings," rather than treating it as a separate, unrelated question from the rest of the deposit plan.

💸 What a smaller deposit actually costs you🔗

A smaller deposit also means a larger loan balance from day one, which means more interest paid over the life of the loan, on top of any LMI premium. Our LMI Calculator puts an actual number on that premium for your own deposit size. It's not automatically the wrong choice, time in the property market has real value too, but it's worth seeing the actual gap rather than assuming it's small. Lenders will also weigh your credit score alongside the deposit size itself. And don't forget the other big upfront cost sitting next to your deposit: run your address and price through our Stamp Duty Calculator so you know the real cash number you need on settlement day.

🏃 Saving for it faster🔗

Whatever deposit target you're aiming for, the mechanics of getting there faster are the same ones that apply to any savings goal: an emergency fund sitting separately so a bad month doesn't derail the deposit fund, a dedicated high-interest savings account so the deposit isn't mixed in with everyday spending money, and an automatic transfer on payday rather than relying on whatever's left at the end of the month.

One option specific to a house deposit, and easy to overlook, is the First Home Super Saver Scheme (FHSSS). It lets eligible first home buyers make voluntary contributions to their own super, taxed at super's lower rate rather than your marginal income tax rate, then withdraw those contributions plus associated earnings to put toward a deposit.

❓ Frequently asked questions🔗