Saving for a house deposit can feel like one of the biggest hurdles when you’re getting ready to buy your first home. You’ve probably got a number in your head already. Working out whether that needs to be 5%, 10% or 20%, and what else comes on top, is usually what makes the whole thing click.
20% gets treated as the gold standard. But depending on your circumstances, your lender, and whether a government scheme applies to you, you might not need anywhere close to that.
The ABS counted 31,783 new owner-occupier first home buyer loan commitments in the December quarter of 2025. People are still getting into the market, in other words, deposit size and all.
Note: General information only, this isn’t financial advice and doesn’t factor in your personal situation. Deposit rules and scheme eligibility shift between lenders and over time, so check current details directly before acting on anything here.
Below we’ll get into how much deposit you’d actually need, what it does to your loan, the costs that catch people off guard, and how to figure out what’s realistic for you.
What Size Deposit Do Lenders Typically Expect?
Your deposit’s calculated as a percentage of the purchase price. Get to 20% and you can usually dodge Lenders Mortgage Insurance (LMI), but that’s not some hard floor you have to clear first.
Rough numbers across a few price points:
| Property price | 5% deposit | 10% deposit | 20% deposit |
| $500,000 | $25,000 | $50,000 | $100,000 |
| $600,000 | $30,000 | $60,000 | $120,000 |
| $700,000 | $35,000 | $70,000 | $140,000 |
| $800,000 | $40,000 | $80,000 | $160,000 |
| $1,000,000 | $50,000 | $100,000 | $200,000 |
Note: Examples only, doesn’t include stamp duty, conveyancing, inspections or anything else that comes with buying.
Is 20% Still the Number to Aim For?
Not really. A bigger deposit shrinks the loan and helps you sidestep LMI, sure. But getting to a full 20% just isn’t in reach for a lot of people, and that doesn’t have to stop you.
Some lenders will work with smaller deposits depending on how they assess things. There’s also the Australian Government 5% Deposit Scheme, which lets eligible first home buyers in with 5% down instead of grinding toward 20%. Eligibility rules apply, and so do property price caps that change depending on where you’re buying.
The point is, there’s no magic percentage. It’s more about what fits your situation while leaving you enough in the bank to actually live in the place once you’ve bought it.
How Much Can You Borrow With Your Deposit?
Here’s the bit people get wrong, deposit size doesn’t decide borrowing power on its own. Lenders are weighing income, regular expenses, existing debts, credit history, employment, the lot.
A $70,000 deposit doesn’t mean a $700,000 property is automatically yours. Your income and expenses still need to carry the repayments that loan requires.
Bigger deposit, smaller loan, often more manageable repayments, fair enough. Just don’t drain every cent of savings chasing a round number. That tends to come back and bite once moving costs and everything else shows up.
Our home loan calculator estimates repayments across different loan amounts, rates and terms if you want to play with the numbers yourself.
“Don’t empty your savings account just to reach a 20% deposit. A bigger deposit cuts what you borrow. But owning a home brings its own ongoing costs, repayments, insurance, maintenance, utilities. An emergency buffer can matter just as much as deposit size.”
— Jimmy Champion, Senior Mortgage Broker
Your Deposit Isn’t the Only Money You’ll Need
People fixate on the deposit and forget everything that comes after it. Budget for:
- Stamp duty, which varies by state and your own circumstances
- Conveyancing or legal fees for the paperwork side of things
- Building and pest inspections, especially on an established home
- Loan and lender fees, application, valuation, settlement
- Registration fees for the property and mortgage
- Moving costs, removalists, transport, the usual
- LMI, if you’re borrowing a high enough percentage of the value
Exact figures depend on your state, the property, and your situation, so this is more a checklist than a quote.
What Is LVR and Why Does It Matter?
Loan to value ratio compares what you’re borrowing against what the property’s worth. That’s it, that’s the whole concept.
Buy a $700,000 property with a $140,000 deposit and you need a $560,000 loan. Your LVR would be:
$560,000 ÷ $700,000 = 80% LVR
Drop the deposit to $70,000, and the loan jumps to $630,000, pushing LVR to 90%.
Higher LVR means a bigger slice of the property’s value is borrowed, not owned outright. Lenders tend to price that differently, your rate, whether LMI kicks in, other costs can all move depending on where your LVR lands.
Ready to Explore Your Home Loan Options?
See what home loan options could suit your deposit, borrowing needs and budget.
Can You Buy a House With a 5% Deposit?
In some cases, yes. Plenty of lenders will take deposits under 20%, though their criteria and LVR limits aren’t identical across the board.
Then there’s the government option. The Australian Government 5% Deposit Scheme lets eligible first home buyers purchase with as little as 5% down, assuming they meet the eligibility rules and the property falls under the relevant price cap.
Getting in sooner with less saved is tempting, obviously. It also means a bigger loan hanging over you. Weigh the upfront number against the ongoing repayments before locking in a deposit size.
How Can You Save for a House Deposit?
A few habits that actually move the needle if you’re still building toward it:
- Set a savings target tied to the actual property price you’re eyeing
- Keep the deposit money separate from everyday spending
- Go through subscriptions and discretionary spending, there’s usually more to cut than people think
- Automate transfers so it’s not a willpower contest every payday
- Reconsider your target price if the numbers aren’t working
- Factor stamp duty and other upfront costs into the target, not just the deposit itself
You don’t have to wait until you’ve hit exactly 20% to start exploring your options. Knowing your borrowing capacity and likely purchase costs upfront tends to produce a more realistic number anyway.
How We Can Help You Work Out Your Home Loan Budget
Knowing what you’ve saved is only part of the picture. You need to see how the deposit, your borrowing capacity, and the likely repayments fit together.
Our home loan calculator estimates repayments across different loan amounts and terms, a decent starting point before comparing actual home loans.
