You usually need somewhere between 5% and 20% of the property price as a deposit for a home loan, with 20% being the sweet spot to avoid extra costs like Lenders Mortgage Insurance (LMI).

Quick Scoop

  • A typical target is a 20% deposit of the property price to avoid LMI and get better loan terms.
  • Many lenders will consider you with as little as a 5–10% deposit , but you’ll almost always pay LMI and face stricter conditions.
  • You also need extra savings for stamp duty, legal fees, inspections and moving costs on top of the deposit itself.

Think of it this way: your deposit gets you in the door, but the extra costs let you actually move in and keep the lights on.

Typical Deposit Ranges

1. The “ideal” 20% deposit

Most Australian lenders treat 20% as the gold standard:

  • It keeps your loan-to-value ratio (LVR) at or below 80%, which is the line where LMI usually kicks in.
  • On a home worth $700,000 , a 20% deposit is $140,000.
  • On a home around the median Australian value (~$805,000 in 2025) , 20% is about $161,000.

Why 20% matters:

  • No LMI (can save you tens of thousands over the life of the loan).
  • Usually better interest rates and more lender options, because you’re seen as lower risk.

2. Low deposit options (5–10%)

Plenty of people buy with less than 20%, especially first‑home buyers.

  • Many lenders accept a minimum 5% deposit , sometimes a bit more depending on your income, credit history and the property.
  • For a $600,000 place:
    • 5% deposit ≈ $30,000 (plus LMI).
* 10% deposit ≈ **$60,000** (LMI usually still applies).

What to watch out for:

  • Lenders Mortgage Insurance (LMI):
    • Usually kicks in when your deposit is under 20%.
* Often added to your loan, so you pay **interest on the insurance** as well.
  • Higher LVR loans (like 90–95% LVR) can mean:
    • Stricter approval criteria.
    • Sometimes higher interest rates or fewer product features.

Some first‑home buyer schemes can let you buy with as little as 5% without paying LMI if you qualify (income caps, property price limits and owner‑occupier rules usually apply).

Beyond the Deposit: Extra Costs

A lot of first‑timers are surprised that the deposit isn’t the only upfront cash you need. Common extras include:

  • Stamp duty: Varies a lot by state, property price and whether you’re a first‑home buyer; can easily run into tens of thousands.
  • Conveyancing / legal fees: Paying a solicitor or conveyancer to handle the contract and settlement.
  • Building and pest inspections: Especially for houses and older properties.
  • Government and bank fees: Application fees, registration fees and other one‑offs.

Forum discussions often highlight that you may also need a buffer beyond the “X% deposit” to cover things like bidding above the listing price in hot markets, plus moving and furnishing costs.

How to Think About “How Much Do You Need?”

The “right” deposit for you depends on:

  • Property price range:
    • Higher prices mean each percent is a bigger chunk of money.
  • Risk comfort:
    • Are you okay paying LMI to get in sooner, or would you rather wait, save more and avoid it?
  • Eligibility for government schemes:
    • If you qualify, you might get in with a smaller deposit and reduced costs.
  • Income and borrowing capacity:
    • You might technically be able to borrow more than you’re comfortable repaying month‑to‑month.

A common path seen in recent Australian forum threads is:

  1. Save roughly 10% plus costs , get advice from a broker, and compare buying now (with LMI) vs. waiting to reach closer to 20%.
  1. Check if any guarantor options or first‑home schemes apply, especially if parents own property and are willing to help.

If You Want a Simple Rule of Thumb

  • Aim for 20% deposit if you want to minimise fees and maximise flexibility.
  • Consider 5–10% if:
    • You’re comfortable paying LMI.
    • Getting into the market sooner matters more than waiting to save the full 20%.
  • Always budget extra on top for stamp duty, legal fees and a cash buffer so you’re not wiped out on day one.

Bottom note: Information gathered from public forums or data available on the internet and portrayed here.