How much deposit do you need to buy a house in Australia? It is the first question every first home buyer asks — and the answer can mean a difference of $90,000 or more in upfront costs depending on the path you choose.
The short answer: you can buy with as little as 2% deposit through a government scheme, or 5% with most lenders. You do not need 20%. That is a myth that costs first home buyers years of unnecessary saving while property prices keep climbing.
This guide breaks down every deposit tier, what Lenders Mortgage Insurance (LMI) actually costs at each level, and the government schemes that can slash your deposit to almost nothing. We will also cover genuine savings requirements, the hidden costs beyond your deposit, and a realistic savings plan to get you there faster.
How Much Deposit Do You Need? — The Quick Answer
Here is every deposit option available to Australian home buyers in 2026, from the lowest entry point to the gold standard:
| Deposit % | On a $600K Home | LMI Cost (approx) | Government Scheme |
|---|---|---|---|
| 2% | $12,000 | $0 | Family Home Guarantee (single parents) or Keystart (WA only) |
| 5% | $30,000 | $0 | First Home Guarantee (no LMI if eligible) |
| 5% (no scheme) | $30,000 | $25,000–$31,000 | None — LMI required |
| 10% | $60,000 | $8,000–$12,000 | None — LMI required (unless profession waiver) |
| 15% | $90,000 | $3,000–$5,000 | None — LMI required |
| 20% | $120,000 | $0 | Not needed — no LMI at 80% LVR |
| 0% | $0 | $0 | Guarantor loan only (family member uses their equity) |
The minimum deposit for a home loan in Australia is 2% through the Family Home Guarantee or Keystart in WA. The most common path for first home buyers is 5% through the First Home Guarantee — no LMI, unlimited places since October 2025, and no income caps.
The difference between a 5% deposit with the First Home Guarantee and a 5% deposit without it is roughly $25,000–$31,000 in LMI alone. That is why understanding your scheme eligibility matters more than almost anything else in your home-buying journey.
Average House Deposit in Australia 2026 — By State
What does a house deposit actually look like in practice? Here is what Australian home buyers are putting down in 2026, based on current median house prices by capital city:
| State | Capital City Median | 5% Deposit | 10% Deposit | 20% Deposit |
|---|---|---|---|---|
| NSW (Sydney) | ~$1,030,000 | $51,500 | $103,000 | $206,000 |
| VIC (Melbourne) | ~$800,000 | $40,000 | $80,000 | $160,000 |
| QLD (Brisbane) | ~$700,000 | $35,000 | $70,000 | $140,000 |
| WA (Perth) | ~$650,000 | $32,500 | $65,000 | $130,000 |
| SA (Adelaide) | ~$550,000 | $27,500 | $55,000 | $110,000 |
The average house deposit in Australia sits at roughly $135,000 nationally — but that figure is misleading because it includes investors and upgraders putting down 20%+. For first home buyers using the First Home Guarantee, the real deposit needed is the 5% column: $27,500 in Adelaide to $51,500 in Sydney.
Perth and Adelaide offer the most accessible entry points for first home buyers in 2026. A 5% deposit in Perth is $32,500 — achievable in 12 to 18 months of dedicated saving for a couple on average incomes. Calculate your real borrowing power to see what you can afford in your city.
What Is LMI and How Much Does It Cost?
Lenders Mortgage Insurance (LMI) protects the lender — not you — if you default on your home loan. Despite its name, it provides no benefit to the borrower. It is required whenever your deposit is less than 20% of the property value and you do not have a government guarantee or profession-based waiver.
LMI is a one-off premium, usually added to your loan balance at settlement. The cost depends on your loan amount, deposit percentage, and the insurer. Here is what LMI typically costs on a $600,000 property in 2026:
| Deposit | LVR | LMI Cost (approx) |
|---|---|---|
| 5% ($30,000) | 95% | $25,000–$31,000 |
| 10% ($60,000) | 90% | $8,000–$12,000 |
| 15% ($90,000) | 85% | $3,000–$5,000 |
| 20% ($120,000) | 80% | $0 |
On a $600,000 property with a 5% deposit, LMI adds up to $31,000 to your loan. That is an entire year of repayments just to cover insurance that protects the bank, not you.
There are four ways to avoid LMI entirely:
- Save a 20% deposit — the traditional path, but it takes most buyers 3 to 5 years
- Use the First Home Guarantee — buy with 5% deposit, government guarantees the rest
- Get a guarantor loan — a family member uses their property equity as security
- Qualify for a profession-based LMI waiver — available to doctors, dentists, lawyers, accountants, engineers and other qualified professionals
That said, paying LMI is not always a bad decision. If property prices are rising faster than you can save, getting into the market sooner with a 10% deposit and paying $10,000 in LMI may cost less than waiting two more years while prices rise $50,000. A mortgage broker can model both scenarios for your situation.
For a deeper breakdown of how LMI works, who pays it, and how to avoid it, read our complete LMI guide.
Profession-Based LMI Waivers
Certain professions can access LMI waivers from many lenders, even with just a 10% deposit — saving $8,000 to $15,000 without needing any government scheme.
Professions that commonly qualify include doctors, dentists, specialists, pharmacists, optometrists, solicitors, barristers, accountants, and engineers. Some lenders also extend waivers to nurses, teachers, police officers, and other emergency services workers — eligibility varies by lender.
If you are in an eligible profession, always tell your broker upfront. The best professional deals are often not publicly advertised and only available through mortgage brokers who know which lenders are currently offering them.
Government Schemes That Reduce Your Deposit
Between federal and state programs, there is more help available than most first home buyers realise. Here is every scheme that directly reduces the deposit you need:
First Home Guarantee (5% deposit, no LMI)
The flagship federal scheme. Eligible first home buyers purchase with just 5% deposit and zero LMI — the government guarantees the remaining 15% to the lender. Since the October 2025 expansion, there are unlimited places and no income caps. Property price caps apply by location. You apply through a participating lender as part of your standard home loan application.
Family Home Guarantee (2% deposit, no LMI)
For single parents and legal guardians with at least one dependent child. Buy with just 2% deposit — the government guarantees up to 18%. You do not need to be a first home buyer. Since October 2025: unlimited places and no income caps. Full Family Home Guarantee guide.
Help to Buy (2% deposit, government co-ownership)
A shared equity scheme where the government co-owns up to 30% of an existing home or 40% of a new build. You need just a 2% deposit and pay no LMI. Income cap of $90,000 for singles or $120,000 for couples. You buy out the government share over time or when you sell.
First Home Super Saver Scheme (FHSS)
Not a deposit reduction scheme, but a tax-advantaged way to save your deposit faster. Salary sacrifice up to $15,000 per year into super (taxed at 15% instead of your marginal rate of 30–37%), then withdraw up to $50,000 to use as your deposit. Tax savings of $10,000 to $15,000 over three years. Couples can combine for $100,000. Full FHSS guide.
Keystart (WA only, 2% deposit)
A Western Australian Government-backed lender offering home loans with 2% deposit and no LMI. Higher interest rate than major banks, but the lowest deposit entry point in WA. Most buyers refinance within 3 to 5 years once they build equity. Full Keystart guide.
State grants and stamp duty concessions
Most states offer a First Home Owner Grant ($10,000 to $30,000 for new builds) and stamp duty exemptions or concessions for first home buyers. These do not reduce your deposit directly, but they reduce the total cash you need at settlement. Check our grants guide by state for the full breakdown.
How to Save for a House Deposit Faster
Once you know your deposit target, the question becomes: how do I get there? Here are the strategies that actually move the needle — not the "skip avocado toast" clichés.
1. Use the FHSS scheme
This is the single most effective savings accelerator available. Instead of saving in a bank account where contributions are taxed at your marginal rate (30–37%), salary sacrifice into super where contributions are taxed at just 15%. Over three years, that is $10,000 to $15,000 in extra savings from tax alone. Read the full FHSS guide.
2. Automate your savings on payday
Set up an automatic transfer from your transaction account to a dedicated high-interest savings account the day you get paid. If the money moves before you see it, saving becomes effortless. Most high-interest savings accounts in 2026 offer 4.5% to 5.5% per annum — every dollar in a 0.01% transaction account is costing you real money.
3. Cut the big three expenses
Forget small stuff. Focus on the three expenses that actually move the needle:
- Housing costs: Moving to a cheaper suburb, downsizing, or getting a housemate can save $200 to $500 per week — that is $10,000 to $26,000 per year
- Transport: Car ownership costs $10,000 to $15,000 per year. Switching to one car or public transport frees up significant cash
- Food: Meal prepping and cooking at home five nights a week instead of three can save $100+ per week
4. Track your progress
Watching your savings grow is one of the most motivating parts of the deposit journey. Use our free deposit tracker to set your target, log contributions, and see exactly when you will hit your goal.
Realistic savings timeline
A couple earning a combined $120,000 saving $500 per week can reach a 5% deposit on a $650,000 Perth home ($32,500) in about 15 months. A 20% deposit on the same property ($130,000) takes over 5 years at the same rate. That is why using a government guarantee scheme to buy at 5% — and getting into the market 3 to 4 years sooner — is often the smarter financial decision.
Genuine Savings — What Counts?
Most lenders require evidence of "genuine savings" as part of your home loan application. This is separate from the deposit amount — it is about where the money came from and how long you have held it.
What counts as genuine savings:
- Regular deposits from your salary into a savings account over 3+ months
- Term deposits held in your name for 3+ months
- Shares or managed funds held for 3+ months
- Equity in an existing property
- FHSS scheme withdrawals (treated as genuine savings by most lenders)
What typically does not count:
- One-off gifts from family (unless held in your account for 3+ months)
- Recent inheritance or windfall
- Borrowed funds (personal loans, credit card cash advances)
- Tax refunds deposited recently
Most lenders want to see at least 5% of the purchase price as genuine savings. However, some lenders are more flexible — accepting a strong rental payment history as evidence of savings capacity, or allowing gifted funds alongside a smaller genuine savings component. A mortgage broker can match you with lenders whose genuine savings policy fits your situation.
How Your Deposit and Borrowing Power Work Together
This is the part most calculators get wrong, and it catches buyers off guard.
Your deposit is not the same as your maximum property price. Your actual property budget is your borrowing power plus your deposit.
For example, if your borrowing power is $600,000 and you have $80,000 saved, your total property budget is $680,000 — not $600,000 and not $80,000 separately.
The deposit percentage is also calculated on the full property price, not just the loan amount. A 10% deposit on a $680,000 property is $68,000 — meaning you need $68,000 of your $80,000 savings as the deposit, with the remaining $12,000 available for upfront costs like stamp duty and conveyancing fees.
Understanding this distinction means you go into property searching with accurate numbers rather than a nasty surprise at the finish line. Use NestPath's borrowing power calculator to see your real property budget.
Beyond the Deposit — Other Costs to Budget For
Your deposit is only part of the upfront cash you need. On top of your deposit, budget for these costs that cannot be rolled into your home loan:
| Cost | Typical Range | Notes |
|---|---|---|
| Stamp duty | $0–$30,000+ | First home buyers get exemptions/concessions in most states. Calculate yours |
| Conveyancing/solicitor | $1,500–$3,000 | Legal fees for contract review and settlement. Find a conveyancer |
| Building and pest inspection | $400–$700 | Essential for established homes. Book an inspection |
| Loan application fees | $0–$600 | Many lenders waive these for first home buyers |
| Strata/body corporate report | $200–$350 | Required for apartments and townhouses |
| Building insurance (first year) | $1,200–$2,500 | Required by lender before settlement. Compare policies |
| Removalists | $800–$2,500 | Book 2+ weeks ahead — weekends go first. Find a removalist |
| Utility connections | $300–$600 | Electricity, gas, internet setup fees and bonds. Connect utilities |
Rule of thumb: budget 3% to 5% of the purchase price for costs on top of your deposit. On a $600,000 property, that is $18,000 to $30,000 in addition to your deposit — depending mainly on whether you qualify for a stamp duty exemption in your state.
Deposit Scenarios — Perth First Home Buyer 2026
Perth is one of the most accessible capital cities for first home buyers in 2026. Here is what each deposit path looks like on a realistic $650,000 Perth property:
| Scenario | Deposit | LMI | Stamp Duty | Other Costs | Total Cash Needed |
|---|---|---|---|---|---|
| 2% Keystart | $13,000 | $0 | ~$22,000 | ~$3,000 | ~$38,000 |
| 2% Family Home Guarantee | $13,000 | $0 | ~$22,000 | ~$3,000 | ~$38,000 |
| 5% First Home Guarantee | $32,500 | $0 | ~$22,000 | ~$3,000 | ~$57,500 |
| 5% no scheme | $32,500 | ~$21,000 | ~$22,000 | ~$3,000 | ~$78,500 |
| 10% no scheme | $65,000 | ~$9,000 | ~$22,000 | ~$3,000 | ~$99,000 |
| 20% no scheme | $130,000 | $0 | ~$22,000 | ~$3,000 | ~$155,000 |
The difference between the cheapest entry (Keystart at $38,000 total) and the traditional 20% path ($155,000) is $117,000. For most Perth first home buyers, the First Home Guarantee at 5% is the sweet spot — $57,500 total cash needed, no LMI, and access to competitive bank interest rates from day one.
WA first home buyers also benefit from stamp duty concessions — no stamp duty on properties up to $430,000 and reduced duty up to $530,000. For properties above that threshold (like this $650,000 example), full stamp duty applies. Check WA first home buyer grants and concessions for the latest thresholds.
Not sure what you can afford in Perth? NestPath's free borrowing power calculator shows your real property budget, deposit scenarios, and government scheme eligibility in under two minutes.
Frequently Asked Questions
How much deposit do I need to buy a house in Australia?
The minimum deposit for a home loan in Australia is 2% through the Family Home Guarantee (single parents) or Keystart (WA). Most first home buyers use the First Home Guarantee to buy with 5% deposit and no LMI. Without a government scheme, most lenders require 5% to 20%, with Lenders Mortgage Insurance applying below 20%. On a $600,000 home, that ranges from $12,000 (2%) to $120,000 (20%).
What is the minimum deposit for a home loan in Australia?
The absolute minimum is 2% — available through the Family Home Guarantee for single parents or Keystart in Western Australia. For most other first home buyers, the minimum is 5% through the First Home Guarantee (no LMI) or 5% with a standard lender (LMI applies). Some lenders offer guarantor loans with 0% deposit if a family member provides security.
How much is LMI on a 5% deposit?
LMI on a 5% deposit typically costs $15,000 to $31,000 depending on the property price and lender. On a $600,000 home with a 5% deposit ($30,000), expect LMI of $25,000 to $31,000. This cost is avoided entirely if you use the First Home Guarantee — the government guarantees the gap so no LMI is charged.
What is the average house deposit in Australia?
The average deposit in Australia is approximately $135,000 — but this figure includes investors and upgraders putting down 20%+. For first home buyers using the First Home Guarantee at 5%, the real deposit ranges from $27,500 (Adelaide) to $51,500 (Sydney). The average varies significantly by state: NSW deposits average around $206,000, while WA averages around $120,000.
How can I save for a house deposit faster?
The most effective strategy is the First Home Super Saver Scheme (FHSS) — salary sacrifice into super at 15% tax instead of your marginal rate (30–37%), saving $10,000 to $15,000 in tax over three years. Beyond that: automate savings on payday into a high-interest account (4.5–5.5% in 2026), cut major expenses (housing, transport, food), and use NestPath's free deposit tracker to visualise your progress.
Do I need genuine savings for a home loan?
Most lenders require at least 5% of the purchase price as genuine savings — money you have saved yourself over 3+ months. Regular salary deposits into a savings account create a clear trail. Gifts from family, tax refunds, and recent windfalls may not count unless held for 3+ months. Some lenders accept a strong rental history as an alternative. A mortgage broker can advise which lenders are most flexible.
Can I buy a house with no deposit in Australia?
Only with a guarantor loan, where a family member (usually a parent) uses the equity in their own property as additional security for your loan. This eliminates the need for both a deposit and LMI. The guarantor does not make your repayments — they only provide security. If you default, the guarantor is liable for the guaranteed portion. Most buyers release the guarantor within 3 to 5 years once enough equity is built.
What other costs do I need besides a deposit?
Budget 3% to 5% of the purchase price for costs on top of your deposit. The biggest cost is stamp duty ($0 to $30,000+ depending on your state and whether you qualify for a first home buyer exemption). Other costs include conveyancing ($1,500 to $3,000), building and pest inspection ($400 to $700), loan application fees ($0 to $600), and moving costs ($500 to $2,000). Use NestPath's stamp duty calculator for your exact figure.
