You Little Beauty Ballarat

How much do you need for a home deposit?

One of the first questions buyers often ask is how much they need for a home deposit. It’s a simple question with a slightly more complex answer – because the amount buyers need depends on their circumstances, goals and lender.
The standard benchmark for a home deposit is 20% of the property’s purchase price. So, if someone was buying a $700,000 home, that would mean a $140,000 deposit. But not everyone needs to, or is able to, reach that 20% benchmark.

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.

GET STARTED ONLINE
got questions? email us here!

Back to Info Centre overview

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 is a fixed rate?

What is a fixed rate?

A fixed rate loan allows you to lock your interest rate in for a period of time. This means that...