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The conventional wisdom is that home buyers should aim for a 20% deposit to secure the best loan terms, but it is possible to buy a property with a deposit as low as 5%, or even 2% in some situations.
Our dedicated team of Money.com.au Home Loan experts is here to help.
Most lenders (including the big four banks) will accept a minimum deposit of 5% of the property’s value, if you pay lender’s mortgage insurance (LMI). In practical terms, you would need a minimum deposit of $30,000 to buy a $600,000 home and borrow $570,000 from the bank.
Here’s an overview of the common house deposit amounts and when they typically apply:
BIG NEWS!
The Federal Government’s expanded First Home Guarantee scheme kicked in on 1 October 2025. Under the new rules, any first home buyer can now get a home loan with as little as a 5% deposit, without paying LMI or needing a guarantor. The expansion also removes income caps, introduces unlimited places, and raises the property value caps significantly.
Another option is rent-to-own homes, which typically require a smaller upfront amount, but this can end up being more expensive in the long run due to the additional fees charged.
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This table shows how much you would need for different levels of deposit based on different property values.
Property value | $500,000 |
|---|---|
20% deposit (no LMI) | $100,000 |
10% deposit (LMI may apply) | $50,000 |
5% deposit (LMI may apply) | $25,000 |
Property value | $600,000 |
20% deposit (no LMI) | $120,000 |
10% deposit (LMI may apply) | $60,000 |
5% deposit (LMI may apply) | $30,000 |
Property value | $700,000 |
20% deposit (no LMI) | $140,000 |
10% deposit (LMI may apply) | $70,000 |
5% deposit (LMI may apply) | $35,000 |
Property value | $800,000 |
20% deposit (no LMI) | $160,000 |
10% deposit (LMI may apply) | $80,000 |
5% deposit (LMI may apply) | $40,000 |
Property value | $900,000 |
20% deposit (no LMI) | $180,000 |
10% deposit (LMI may apply) | $90,000 |
5% deposit (LMI may apply) | $45,000 |
Property value | $1,000,000 |
20% deposit (no LMI) | $200,000 |
10% deposit (LMI may apply) | $100,000 |
5% deposit (LMI may apply) | $50,000 |
| Property value | 20% deposit (no LMI) | 10% deposit (LMI may apply) | 5% deposit (LMI may apply) |
|---|---|---|---|
$500,000 | $100,000 | $50,000 | $25,000 |
$600,000 | $120,000 | $60,000 | $30,000 |
$700,000 | $140,000 | $70,000 | $35,000 |
$800,000 | $160,000 | $80,000 | $40,000 |
$900,000 | $180,000 | $90,000 | $45,000 |
$1,000,000 | $200,000 | $100,000 | $50,000 |
The bigger your deposit, the lower your LVR and the less you have to borrow. A larger deposit shows lenders you have a proven savings history and can mean you get a better interest rate on your home loan.
Based on the latest ABS lending data, the average new first home buyer loan for owner-occupiers is $554,961. This means a 20% deposit on that amount would be $110,992.
However, the average doesn’t necessarily reflect how much many first home buyers have actually saved up, with many buying a property with less than a 20% deposit. For example, a 10% deposit on the amount above would come to $55,496, and a 5% deposit just $27,748.
Our recent survey found that about one in three homeowners took three to four years to save for their house deposit. Another 20% said it took them five to six years, 17% managed it in one to two years, and 9% said it took more than a decade.
Here’s the difference in interest rates for standard owner-occupied home loans with a 20% deposit (80% LVR) and a 5% deposit (95% LVR) from popular lenders in Australia.
Lender | Adelaide Bank SmartFit |
|---|---|
Interest rate at 80% LVR | 5.54% p.a. |
Comparison rate^ | 5.71% p.a. |
Interest rate at 95% LVR | 7.18% p.a. |
Comparison rate^ | 7.34% p.a. |
Lender | ING Mortgage Simplifier |
Interest rate at 80% LVR | 5.59% p.a. |
Comparison rate^ | 5.62% p.a. |
Interest rate at 95% LVR | 5.94% p.a. |
Comparison rate^ | 5.97% p.a. |
Lender | Commonwealth Bank Standard Variable Rate Home Loan (with Wealth Package) |
Interest rate at 80% LVR | 5.74% p.a. |
Comparison rate^ | 6.13% p.a. |
Interest rate at 95% LVR | 6.99% p.a. |
Comparison rate^ | 7.36% p.a. |
Lender | ANZ Simplicity PLUS Home Loan |
Interest rate at 80% LVR | 5.79% p.a. |
Comparison rate^ | 5.80% p.a. |
Interest rate at 95% LVR | 6.89% p.a. |
Comparison rate^ | 6.89% p.a. |
| Lender | Interest rate at 80% LVR | Comparison rate^ | Interest rate at 95% LVR | Comparison rate^ |
|---|---|---|---|---|
Adelaide Bank SmartFit | 5.54% p.a. | 5.71% p.a. | 7.18% p.a. | 7.34% p.a. |
ING Mortgage Simplifier | 5.59% p.a. | 5.62% p.a. | 5.94% p.a. | 5.97% p.a. |
Commonwealth Bank Standard Variable Rate Home Loan (with Wealth Package) | 5.74% p.a. | 6.13% p.a. | 6.99% p.a. | 7.36% p.a. |
ANZ Simplicity PLUS Home Loan | 5.79% p.a. | 5.80% p.a. | 6.89% p.a. | 6.89% p.a. |
We recently asked Australians whether they had at least 5% of their first home’s value saved as genuine savings when they bought their property. 39.6% said they did, while 25.2% had saved 10% or more, and 23.4% had saved 20% or more. Only 4.6% said they relied on non-genuine savings such as a gift or inheritance, and 4.1% used a guarantor to secure their home loan.
You may be able to buy a home in Australia with little to zero deposit with a guarantor home loan. With this option, a parent or family member can use their home equity to help secure your loan, either instead of or in addition to your cash deposit.
Your guarantor must be a homeowner and have enough equity to secure your home loan. A guarantor may secure a portion of your loan – usually 20% to reduce your LVR to 80% (and avoid LMI) or the full loan amount.
Keep in mind that if your guarantor’s mortgage is with a different lender, they will need approval from that lender to add a second mortgagee (your lender) to the title of their property.
If you’re buying a second property, you may be able to use equity in your existing property as a deposit, meaning you wouldn’t have to put any money down.
The catch is that you need at least 20% usable equity in your home to refinance and avoid paying LMI on a new loan. Usable equity is the equity in your home you can borrow against – usually 80% of the property’s value minus your outstanding debt. The lender will conduct a property appraisal to determine exactly how much usable equity you have.
If you only have 15% usable equity in your home, you’d need to contribute a 5% cash deposit to avoid LMI. The best way to do this is with a ‘cash out’ refinance, which allows you to access your usable equity in cash and then contribute some of your own money to reduce your LVR to 80%, according to Westpac.
Some banks and lenders may waive LMI on home loans with a 5% deposit for professionals in certain secure or high-paying industries – commonly legal and medical practitioners, finance and accounting professionals, etc. Banks that offer an LMI waiver for professionals include ANZ, NAB and Westpac.
The Home Guarantee Scheme (HGS) is available Australia-wide through participating lenders to support eligible first-home buyers and single parents to buy a property with a deposit as little as 2-5%. Housing Australia guarantees up to 15% of the value of a first home and up to 18% for single parents or guardians to avoid the need for LMI.
These include:
For eligible first-home buyers to buy a home with a deposit starting from 5% with no LMI. From 1 October 2025, there are no limits on the number of places available, no income caps, and higher property price caps based on your city. For buyers outside capital cities, the Regional First Home Buyer Guarantee has now been replaced by the FHBG.
For eligible single parents or single legal guardians of at least one dependent to buy a home with a deposit starting from 2% with no LMI. There are 5,000 places available for the 2025-26 financial year.
Lenders generally require a minimum of 5% of the property’s value in genuine savings. Your First Home Owner Grant (FHOG) can contribute to your deposit, but it can’t be the sole source of it, according to mortgage brokers we spoke to. In other words, lenders prefer to see that you've saved money on your own, which shows them you're financially responsible and committed to the purchase.
Some lenders (like Unloan) don't accept FHOG funds as part of your deposit, but being eligible for it may still help you when applying for a loan. According to ANZ, lenders may still factor in the one-time payment when assessing your borrowing capacity, pending grant approval.
There are conditions to the kinds of funds lenders will accept as a deposit. As a general rule, lenders will require at least 5% of the loan amount in genuine savings.
Money.com.au's home loan expert, Mansour Soltani said lenders will generally check your bank statements to check that your deposit has been accrued over time and sitting in a bank account for at least three months.
Mansour Soltani, Money.com.au's Home Loans Expert
“If you’re saving for a house deposit, the first thing you should do is run an analysis on exactly what you’re spending your salary on. I think most people will be surprised how much they spend on small things like a daily coffee or lunch that can add up over time. If you could save even $10 a day, it could add up to $3,500 a year and that’s about 11% of a 5% ($30,000) deposit for a $600,000 home loan. Get serious about cutting your discretionary spending by half.”
Mansour Soltani, Money.com.au's Home Loans Expert
Lenders will generally still accept gifted deposits, usually from parents or family or an inheritance. But they will ask for evidence of where the money came from.
For cash gifts, they may require a gift letter signed by your benefactor(s) stating the funds were given to you as a gift with no strings attached.
For an inheritance, they may require a letter of validation from the executor of the will confirming the amount you’re set to inherit, a copy of the will and a grant probate confirming the will is valid.
The most common way to pay your house deposit is via bank transfer, according to Westpac. The lender will generally add your deposit to your home loan account before you proceed with your property sale.
As for when your deposit needs to be paid, it will depend on how you’re buying the property:
You generally have to pay your deposit in two parts when you buy a home in a private treaty sale, according to Westpac. You pay a smaller holding deposit between $1,000 and $3,000 (negotiable with the real estate agent or buyer) to show that you're serious about the purchase and the remainder of the deposit after you’ve signed the contract of sale to buy your property.
If you’re buying a property at auction, you may be required to pay some of your deposit on the day – usually 5-10% of the winning bid.
If your deposit is tied up in other assets or investments, you may be able to use a deposit bond instead. A deposit bond is an insurance policy that guarantees you will pay a deposit at settlement or by the agreed period stated in the policy document. Not all lenders offer or accept deposit bonds.
When you’re trying to work out how much you need to save for your deposit, don’t forget to factor in upfront costs and relevant home loan fees.
Stamp duty is a state government tax on property purchases and title transfers. It’s calculated as a percentage of the property’s value, ranging from 3-5%. Stamp duty rates vary depending on:
Use our stamp duty calculator to estimate your costs. Stamp duty concessions or exemptions apply to eligible first-home buyers in most states.
Your state or territory government will charge you mortgage registration fees to register your mortgage on a property title. This registers your property as the security on the home loan, allowing future buyers or lenders to check any claims on the home. Mortgage registration fees are payable when the loan is established.
When you buy a home, you’ll usually need to engage a conveyancer or solicitor to handle all the legal paperwork and processes, like transferring the property title to your name, etc. Conveyancing fees can range between $1,200 and $2,400.
It’s always best to conduct a building and pest inspection before you sign the contract to buy your home. This final check (although not mandatory) ensures that the property is structurally sound and has no pest problems like a termite infestation. Building and pest inspections combined can cost between $200 and $1,000, depending on the size of the property and your location.
If you’re buying a home to live in, you may have to hire a removalist which could cost upwards of $1,000 for the service, depending on how much furniture you have, mileage, and if you require additional boxing and wrapping. It’s a good idea to compare quotes from different companies and read online reviews before you hire professionals.
You may be required to take out home insurance as a condition of your home loan agreement. Home insurance is designed to cover the costs of repairing or rebuilding your house if it’s destroyed or damaged by an insured event (e.g. fire, flood, vandalism, etc.). Home insurance can cost between $1,000 and $3,000 a year, depending on your level of cover and insurer.
Depending on the local rules in your state and your sale contract, you might become liable for insuring the property before the sale is settled and you actually move in. For example, in Queensland the buyer becomes responsible for the property from 5pm on the day after the contract date.
 | Australian Mutual Bank First Home 2 Year Fixed Owner OccupiedInterest rate 4.64% per annum (fixed 2 years) Comparison rate 5.53% per annum Redraw Max LVR 95% Repayments from $2,575Fixed paying Principal & Interest | Compare now on Money.com.au or visit site |
 | South West Slopes Bank Optimum 1 Year Fixed Rate Home LoanInterest rate 4.69% per annum (fixed 1 year) Comparison rate 5.73% per annum Redraw Split Loan Max LVR 90% Repayments from $2,590Fixed paying Principal & Interest | Compare now on Money.com.au or visit site |
 | Pacific Mortgage Group Fixed Home LoanInterest rate 4.74% per annum (fixed 2 years) Comparison rate 5.07% per annum Max LVR 80% Repayments from $2,605Fixed paying Principal & Interest | Compare now on Money.com.au or visit site |
 | Border Bank First Home LoanInterest rate 4.79% per annum (fixed 2 years) Comparison rate 5.10% per annum Max LVR 98% Repayments from $2,620Fixed paying Principal & Interest | Compare now on Money.com.au or visit site |
 | Bank Australia Clean Energy Fixed Home Loan 7.5 Star +Interest rate 4.79% per annum (fixed 3 years) Comparison rate 5.41% per annum Split Loan Max LVR 90% Repayments from $2,620Fixed paying Principal & Interest | Compare now on Money.com.au or visit site |
Most lenders require a minimum deposit of 5%, though some government schemes let you buy with even less. A 20% deposit helps you avoid Lender’s Mortgage Insurance (LMI), but if you don’t have that much, a guarantor (like a family member) can help you dodge it.
You typically can’t buy with a 0% deposit unless you have a guarantor who secures the loan with their property. Most lenders still require evidence of genuine savings. Government schemes don’t offer 0% deposit loans, but may reduce the amount needed – usually to 2–5%, not zero.
First home buyers can purchase with as little as 5% under the First Home Guarantee, or 2% through the Family Home Guarantee (for eligible single parents), though places are limited. With a guarantor, you may not need a deposit at all, as they can secure up to 20% of the property’s value using their own home.
LMI is a one-off premium charged when your deposit is less than 20% of the property’s value. It protects the lender, not you, if you default on the loan. LMI can cost several thousand dollars, depending on your deposit size, loan amount and lender.
To avoid LMI, you’ll generally need a 20% deposit. Alternatively, you could qualify for a government scheme like the First Home Guarantee, which lets eligible buyers purchase with a smaller deposit and no LMI. You can also avoid it by using a guarantor loan, where a family member secures part of your loan.
Yes – under the First Home Super Saver Scheme (FHSSS), eligible first home buyers can withdraw up to $50,000 of voluntary super contributions (plus earnings) to put towards a deposit. You can’t withdraw your employer’s compulsory contributions. It’s best to speak with a financial adviser before proceeding.
Generally, a 20% deposit helps you avoid LMI, access better rates, plus it reduces your loan size, meaning less interest charged. But in a rising market, waiting too long could see prices outpace your savings. In some cases, paying LMI may be worth it to enter the market sooner.
Low deposit home loans allow buyers to enter the market with a 5–10% deposit. They may be ideal for those with limited savings but often come with LMI, and sometimes higher interest rates or stricter lending criteria. While helpful for getting into the market, it’s worth having an exit strategy, like refinancing once you build equity.
Consider opening a high-interest savings account (some even come with bonus interest) and cutting back on non-essential expenses. You can also explore government incentives and tools like round-up apps to boost savings automatically. Selling unused items online is another simple way to top up your deposit fund.
Yes – once you own a property, you can use your available equity as a deposit to buy another home or an investment property. Lenders will assess how much of your equity is usable, typically up to 80% of your property’s value minus your remaining loan.
Yes, most lenders accept gifted deposits and inheritance from family, but usually require a signed declaration and proof the money isn't a loan.
Most lenders don’t accept personal loans as a deposit because it increases your debt risk. Genuine savings or equity are preferred.
LVR is the percentage of a property’s value that you’re borrowing. For example, borrowing $720,000 on an $800,000 home gives you a 90% LVR. A lower LVR (80% or less) usually means better interest rates and avoids Lender’s Mortgage Insurance (LMI).
Rent-to-own can help buyers with small savings, but these arrangements often come with complex terms and higher long-term costs. Always read the fine print and talk to a professional to see if this is right for you.
Your deposit excludes upfront costs like stamp duty, conveyancing, building and pest inspections, house insurance and mortgage registration fees, which can add thousands to your purchase.
It depends on your situation. Buying sooner with a smaller deposit can help you avoid rising house prices, but saving more can reduce your loan size and help you avoid LMI. Speak with a mortgage broker or financial adviser to find the best strategy for your goals and circumstances.
Megan Birot is a Finance Writer and Head of PR at Money with over a decade of industry experience. She keeps her finger on the pulse of financial trends, providing journalists and media with data, insights, and news that help Australians navigate complex topics and concepts. She's certified in Finance & Mortgage Broking and is compliant to provide general advice in Tier 1 General Insurance.
Mansour Soltani is Money.com.au’s home loans expert. He’s a mortgage broker with more than 20 years of experience in the finance and real estate industry. Mansour is the Director of Soren Financial and has been featured in publications such as the ABC, Domain.com.au and Australian Broker.
Home loan comparison rates are calculated based on a loan amount of $150,000 repaid over a 25-year term with monthly repayments. The comparison rates only apply to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees and cost savings such as fee waivers are not included in the comparison rate but may influence the cost of the loan. Check with the provider for full loan details, including rates, fees, eligibility and terms and conditions to make sure the product is right for you.
General information only
The information on this page is general in nature and has been prepared without considering your objectives, financial situation or needs. You should consider whether the information provided and the nature of any home loan product is suitable for you and seek independent financial advice if necessary.
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Users can easily change the sort order and apply product filters to our product comparison tables. However, when you arrive on a page initially, by default home loans are sorted by:
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