How much do you need for a home deposit?
Some lenders will accept a smaller deposit – even as low as 5%. However, buyers who go down that path will generally need to pay lenders mortgage insurance (LMI). This is a one-off premium that protects the lender if the borrower defaults on their loan. LMI is often a five-figure sum, depending on the size of the loan and the deposit gap.
First-home buyers may also be able to tap into government schemes. The First Home Guarantee, for example, lets eligible buyers purchase with as little as 5% deposit – without paying LMI. There are eligibility criteria, but it can be a fantastic option for those who qualify.
Keep in mind that the deposit isn’t the only cost to budget for. Buyers will also need to cover stamp duty (unless they’re exempt), legal fees, building and pest inspections, and moving costs. It’s important for buyers to have a buffer beyond just the deposit amount, so they don’t stretch themselves too thin.
Ultimately, while a 20% deposit is the standard option, it’s not the only way forward. With the right strategy and guidance, buyers can get into the market with less – and still put themselves in a strong financial position.
Licensing statement: Rayne Finance ABN [70 605 100 838] is authorised under LMG Broker Services Pty Ltd Australian Credit Licence 517192. Disclaimer: (1) As with any financial scenario there are risks involved. This information provides an overview or summary only and it should not be considered a comprehensive analysis. You should, before acting in reliance upon this information, seek independent professional lending or taxation advice as appropriate and specific to your objectives, financial circumstances or needs. This publication is provided on the terms and understanding that: (2) LMG Broker Services Pty Ltd, Rayne Finance (Seed Lending Pty Ltd) and the authors, consultants and editors are not responsible for the results of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication. (3) LMG Broker Services Pty Ltd, Rayne Finance (Seed Lending Pty Ltd) and the authors, consultants and editors, expressly disclaim all and any liability and responsibility to the maximum extent permitted by the law to any person, whether a purchaser or reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication.
Explore other FAQs and Facts
What are deposit bonds and how do they work?
Buying a property but don’t have the deposit in cash right away? There may be an alternative worth considering. In some situations, buyers can provide a guarantee instead of upfront funds. It’s a tool that can offer flexibility without compromising the seller’s confidence, but how does it actually work?
Understanding conditional loan approval
Thinking about buying a property? You’ve probably heard the term “conditional approval” thrown around but what does it actually mean, and how does it differ from unconditional approval? Understanding the difference can help you feel more confident, better prepared, and avoid surprises as you move through the home loan process.
How to use equity to purchase property
Equity in your home can open doors to new financial opportunities, including property investment, renovations, or debt consolidation. It’s about understanding what you’ve built up—and how to use it wisely. With the right guidance, equity can help you move forward with confidence, but it’s important to weigh the benefits and risks.
What are low-doc loans and who are they for?
Low-doc loans offer a solution for self-employed borrowers who lack traditional financial documents like payslips or tax returns. Instead, lenders assess income using BAS, bank statements, or accountant declarations. While these loans provide flexibility, they often require higher deposits and carry stricter conditions, making them best suited for specific borrower situations.
Home loan redraw facilities explained
A home loan redraw facility lets you access extra repayments you’ve made on your mortgage, helping to lower interest while offering flexibility if you need funds later. It differs from an offset account in accessibility and structure, with pros and cons depending on your spending habits and how easily you need to access savings.
Help to Buy scheme and changes to how lenders consider student debt
More Australians could soon enter the property market with just a 2% deposit, thanks to the expanded Help to Buy scheme. Meanwhile, new lending guidance means student debt will now be treated more flexibly, helping younger buyers. These changes aim to make homeownership more accessible for low- and middle-income earners.
What the federal budget means for buying property
The 2025 federal budget introduces key measures affecting home buyers, including an expanded Help to Buy scheme, increased infrastructure investment, and incentives to grow the construction workforce. Foreign investors face new restrictions, and funding for prefabricated homes aims to accelerate supply. These changes could significantly reshape Australia’s property market.
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