How much deposit do I need to buy a home in Australia?

Most lenders require a 20% deposit to avoid Lenders Mortgage Insurance (LMI). First home buyers can often purchase with as little as 5% through the First Home Guarantee scheme, or 10 to 15% with LMI included in the loan.

What government grants are available for first home buyers?

Depending on your state and property type, you may be eligible for the First Home Owner Grant, stamp duty concessions, and federal schemes like the First Home Guarantee. Eligibility usually depends on price caps, income, and whether the property is new or established.

Can I buy a home with a guarantor?

Yes. A family guarantor (typically a parent) can use equity in their own property as additional security, allowing you to borrow up to 100% of the purchase price and often avoid LMI.

What is the First Home Guarantee Scheme?

The First Home Guarantee Scheme allows eligible first home buyers in Australia to purchase a property with as little as a 5% deposit without paying Lenders Mortgage Insurance.

Journal

First Home Buyers · June 2026 · 6 min read

How Much Deposit Do You Really Need to Buy a Home in Australia?

The 20% deposit rule is more flexible than most buyers think. Here's a practical look at what you actually need to enter the property market.

Almost every Australian buyer starts with the same question: “How much deposit do I actually need?”

Most people assume the answer is 20% of the purchase price. In reality, the rules are far more flexible, and many buyers enter the market sooner than they expected once they understand their options.

Here's a clear breakdown of how deposits really work in Australia, and how to figure out where you stand. You can run your own numbers using our borrowing power calculator.

The Traditional 20% Deposit Explained

A 20% deposit has traditionally been the benchmark because it usually means you avoid Lenders Mortgage Insurance (LMI).

A 20% deposit can help you:

avoid paying LMI
access sharper interest rates
borrow more comfortably under lender policy
build equity faster from day one

The downside is that saving 20% in today's market can take years, and many buyers end up watching property prices rise faster than their savings.

Buying With a 10% or 15% Deposit

Many Australian lenders will happily approve loans with a 10% or even a 15% deposit. LMI usually applies, but in a rising market, paying LMI can sometimes cost less than waiting another two or three years to save a full 20%.

Some lenders also offer reduced LMI options for certain professions, including medical workers, lawyers, accountants, and engineers.

Buying With a 5% Deposit Using the First Home Guarantee

Eligible first home buyers may be able to purchase with as little as a 5% deposit under the First Home Guarantee Scheme, without paying LMI.

This scheme is designed for buyers who:

are Australian citizens or permanent residents
meet income eligibility thresholds
are buying within state property price caps
intend to live in the property

For many first home buyers, this scheme alone can fast track property ownership by several years.

Don't Forget the Costs Beyond the Deposit

A common mistake first home buyers make is focusing on the deposit and forgetting the additional upfront costs of buying a home.

Typical purchase costs include:

stamp duty (where applicable)
conveyancing and legal fees
building and pest inspections
loan application and settlement fees
moving costs and initial repairs

Budgeting for these costs early helps you avoid nasty surprises at settlement.

How a Guarantor Can Reduce the Deposit Needed

If a family member is willing to act as a guarantor using equity in their own property, you may be able to buy with little or no deposit of your own, and still avoid LMI.

Guarantor loans aren't suitable for every family, but they can be a powerful way for first home buyers to enter the market without waiting years to save.

Final Thoughts

The right deposit isn't always 20%. The right deposit is the one that gets you into the right property, at the right time, with a loan structure that still works for your situation.

If you'd like help working out exactly how much deposit you need for your goals, get in touch with a Vairo broker. We'll review your position and show you the most realistic path into the market.

The information in this article is general in nature and does not take into account your personal circumstances. Speak with a qualified mortgage broker before making lending decisions.