How much deposit do you need to buy a house in Australia?
Published: 17 July 2026
Ask ten people how much deposit you need and you’ll hear the same number: 20%. It’s a good default - but it’s not the whole story, and for a lot of first home buyers it’s not even the right target. Here’s how the number actually works, so you can pick yours deliberately.
The short answer
- 20% of the purchase price is the classic benchmark. At or above it, lenders don’t charge Lenders Mortgage Insurance (LMI), and you’ll usually get sharper interest rates.
- 10-15% is common. You’ll pay LMI - typically thousands of dollars, often added to the loan - but you get into the market sooner.
- 5% is the practical floor for most lenders, and under the federal Home Guarantee Scheme eligible buyers can purchase with 5% and pay no LMI at all, because the government guarantees the gap.
What 20% looks like in real dollars
On a $750,000 home - roughly the ballpark for a unit in many capital city suburbs - the deposit maths looks like this:
| Deposit | Amount saved | LMI? |
|---|---|---|
| 20% | $150,000 | No |
| 10% | $75,000 | Yes - roughly $10,000-$18,000 depending on lender |
| 5% | $37,500 | Yes - unless you qualify for the Home Guarantee Scheme |
The gap between the rows is the real decision: is getting in years earlier worth the cost of LMI (or the effort of qualifying for a guarantee place)? There’s no universal answer - it depends on how fast prices are moving in your target suburb versus how fast you can save.
LMI in one paragraph
Lenders Mortgage Insurance protects the lender, not you, if you default. It’s charged when you borrow more than 80% of the property’s value, it scales up as your deposit shrinks, and most people capitalise it onto the loan - which means you pay interest on it for decades. It’s not automatically bad (it’s the price of buying sooner), but it should be a number you’ve looked at, not a surprise at approval time.
The 5% path: Home Guarantee Scheme
The federal Home Guarantee Scheme lets eligible buyers purchase with as little as a 5% deposit with no LMI. Since the scheme was expanded in late 2025 there are no income caps and no annual place limits, though property price caps still apply and vary by state and region. If you’re buying your first home, checking your eligibility should be step one - it can change your savings target by tens of thousands of dollars.
Always confirm the current rules on the official Housing Australia site, since caps and eligibility settings change.
Don’t forget: the deposit isn’t the whole bill
On top of the deposit itself, budget for:
- Stamp duty - varies wildly by state, and most states offer first-home-buyer concessions or exemptions below certain price thresholds.
- Conveyancing and legal fees - typically $1,500-$3,000.
- Building and pest inspections - a few hundred dollars per property you seriously consider.
- Moving costs and a buffer - lenders also like to see savings left over after settlement.
How to work out your number
Want the answer without the arithmetic? Our free deposit calculator does this calculation live. Otherwise, three inputs give you a concrete target:
- Target property price (your best estimate is fine to start).
- Deposit percentage - 20% if you want to avoid LMI, 5% if you expect to qualify for a guarantee place, somewhere between otherwise.
- Grants or schemes you expect to receive.
Price × percentage − grants − what you’ve already saved = your savings gap. Divide by the months until your target buy date and you have the monthly number that actually matters.
That calculation - kept up to date as prices, savings, and rules change - is exactly what Kaasa does for you, alongside a milestone roadmap covering everything between your savings account and settlement day. It’s free to start, and the maths is explained in plain English in How the numbers work.
This is general information only, not financial advice. Confirm current scheme rules, price caps, and stamp duty concessions on official government sites or with your lender.