Many buyers assume they need $250,000 saved before they can even enter the market, which leaves them feeling locked out and waiting for years while prices keep rising. But that’s not necessarily the case, and waiting to reach that figure could actually end up costing you more.
Saving for a home deposit is one of the biggest financial hurdles Australians face, but the good news is that you may not need as much as you think. While the minimum deposit required is generally 5% of the property’s purchase price, aiming for 20% is considered the gold standard. A 20% deposit helps you avoid paying Lenders Mortgage Insurance (LMI) and improves your chances of securing a home loan with a lower interest rate.
The amount you’ll need also depends on the property’s price point. For properties under $500,000, a minimum 5% deposit is typically required; between $500,000 and $1 million, lenders generally expect at least 10%; and for properties over $1 million, a 20% deposit is usually the minimum.
The landscape has also shifted in favour of buyers with smaller deposits. From 1 October 2025, the Australian Government’s 5% Deposit Scheme was expanded, removing income caps, waitlists, and the need to pay LMI for eligible first home buyers, with single parents able to buy with as little as 2%.
So, how much deposit do you need to buy a house in Australia? Let’s break it all down.
The 20% Deposit: Why It’s the Gold Standard
When Australians talk about saving for a home, the 20% deposit is the number that comes up time and time again, and for good reason. A 20% deposit means your Loan-to-Value Ratio (LVR) sits at 80%, which is the threshold most lenders use to assess risk. Borrowers above this level almost universally face Lenders Mortgage Insurance (LMI) requirements.
So what exactly is LMI? LMI is an insurance policy that covers the lender, not you, against losses if you default on your home loan. Despite the fact that it protects the lender, the cost is passed on to the borrower. And it’s not cheap. On a $600,000 property with a 10% deposit, LMI costs around $10,368. Drop to a 5% deposit, and that figure jumps to approximately $25,256.
Beyond avoiding LMI, a 20% deposit delivers other meaningful advantages. It increases your chances of securing a home loan with a lower interest rate, and the risk-based pricing differential between an 80% LVR loan and a 95% LVR loan is typically 0.1–0.5 percentage points, which over a 30-year loan on $500,000 can represent approximately $20,000 in additional interest.
There’s also the question of borrowing power. Lenders look at how much equity you’re bringing to the table. A larger deposit signals lower risk, which can open the door to better loan terms and greater flexibility, especially important in a market where every dollar of borrowing capacity counts.
This is where a buyer’s agent pays for itself. One of the biggest threats to your 20% deposit goal is overpaying for a property at purchase. If you pay $50,000 above market value on a $700,000 home, your effective LVR is already compromised before you’ve made a single repayment, potentially triggering LMI you had budgeted to avoid. Moove helps buyers purchase strategically and at the right price, protecting your deposit’s power from day one and maximising your borrowing capacity for the long term.
Reaching the 20% mark is a genuine achievement, but getting there is only half the battle. What you do with that deposit, and the price you pay for the property, is just as important.
Can You Buy With Less? Low-Deposit Home Loans Explained
The good news for buyers who haven’t yet reached the 20% milestone is that it’s no longer a hard requirement to get into the market. Low-deposit home loans, those requiring just 5% or 10%, allow buyers to save less, borrow more, and purchase sooner. But going in with less equity comes with trade-offs worth understanding clearly.
The 5% and 10% deposit options
If you’re buying a property for $500,000, a 20% deposit is $100,000. A 10% deposit is $50,000 and a 5% deposit is only $25,000, making the lower options far more achievable for many buyers. The catch is that buying with a low deposit often means paying a higher interest rate, as lenders view loans with an LVR above 80% as higher risk. Add LMI on top of that (unless you qualify for a government scheme), and the real cost of a smaller deposit starts to add up quickly.
The government’s 5% Deposit Scheme
From 1 October 2025, eligible first home buyers can purchase with just a 5% deposit, and single parents or legal guardians with as little as 2%, with no income caps, no waitlists, and no LMI payable. This has made entry into the market significantly more accessible, and the scheme is now available through a wide range of participating lenders.
The risks of a small deposit
Buying with less equity isn’t without consequences. A low deposit increases your risk of negative equity if property prices drop, creates higher monthly repayment pressure due to a larger loan, and leaves you more vulnerable to interest rate rises. With a 5% deposit, your LVR sits at around 95%, leaving a minimal buffer against market movement. If the market drops, your loan could be worth more than your property.
Property experts have raised concerns that buyers who enter the market with low deposits are at elevated risk in a softening price environment, noting that “there is a difference between getting into the market and getting into the market safely.”
This is where strategic buying matters most. A low deposit isn’t necessarily a bad decision, but it makes the price you pay for a property even more critical. With only a 5% buffer, overpaying by even a small margin can erode your equity almost immediately. Moove works with buyers to ensure they purchase at or below fair market value, which is particularly vital when you’re entering with limited equity and can’t afford to start in the hole.
Getting into the market sooner can make sense in a rising market. But the thinner your deposit, the less room you have for error, and the more important it is to buy the right property at the right price.
Government Schemes and Grants That Can Help
For first home buyers in Australia, 2026 represents one of the most supported entry points into the property market in recent memory. Between federal guarantees, cash grants, stamp duty exemptions, and shared equity schemes, eligible buyers could save $40,000 to $75,000 or more depending on their state. Here’s what’s currently on the table.
The First Home Guarantee (Federal)
From October 2025, income caps and place limits were removed from the First Home Guarantee, a significant expansion that opens the scheme to a much wider pool of buyers. Under the scheme, eligible first home buyers can purchase with a deposit as low as 5% without paying LMI, with the federal government acting as guarantor on the gap between your deposit and 20%. For single parents, the minimum deposit drops to just 2% under the Family Home Guarantee.
Help to Buy (Federal — Shared Equity)
Launched in December 2025, Help to Buy is a shared equity scheme where the government contributes up to 40% of the purchase price for a new home, or 30% for an existing home, with buyers needing as little as a 2% deposit. The trade-off is that the government owns a proportional share of your property, and when you sell, they receive their share of the proceeds. It’s best suited to lower-to-middle income earners who need to reduce their borrowing burden.
First Home Owner Grant (State-Based)
The FHOG is a one-off cash payment funded by state and territory governments, primarily for buyers purchasing a new or substantially renovated home. Grant amounts vary significantly by state. Queensland currently offers $15,000 for new metro homes, NSW offers $10,000, Victoria $10,000, South Australia $15,000, and Tasmania $30,000, one of the highest in dollar terms.
Stamp Duty Concessions (State-Based)
Stamp duty concessions can be just as valuable as the grants themselves, sometimes more so. In NSW, first home buyers pay zero stamp duty on properties up to $800,000, saving approximately $26,000 on a $700,000 purchase. In Queensland, established homes attract no stamp duty up to $700,000, and new builds may attract a full concession from 1 May 2025. Thresholds and eligibility vary by state, so it’s worth checking your state revenue office for current figures.
Stacking the Schemes
In many cases these schemes can be combined: a Queensland buyer could access the FHOG, a stamp duty concession, and the First Home Guarantee simultaneously, dramatically reducing upfront costs. However, Help to Buy and the First Home Guarantee cannot be used at the same time; buyers must choose one or the other.
Where a buyer’s agent adds value here is less about knowing the schemes exist, your broker and conveyancer can help with that, and more about what happens next. Government incentives reduce your upfront costs, but they don’t tell you whether the property you’re buying is worth the price. As one industry guide puts it plainly: “The dangerous version is when you try to stack schemes to stretch into a property you can’t afford.” Moove ensures that the savings unlocked by these schemes aren’t quietly lost at the negotiating table by overpaying for the property itself.
Note: Grant amounts and eligibility thresholds change regularly. Always verify current figures with your state revenue office or a licensed mortgage broker before making any decisions.
How Much Deposit Do You Need Based on Property Price?
If you’re wondering how much deposit do you need to buy a house in Australia, understanding deposit percentages in the abstract is one thing. Seeing what they actually translate to in dollar terms, against real Australian property prices, is another. Here’s a practical breakdown using current median dwelling values.
The national picture
National home prices hit a record median of $880,000 in December 2025, up 8.8% over the year. That means the deposit goalposts are moving, in some cities, faster than most people can save.
Deposit requirements by city
Based on current median dwelling values, here’s what buyers are looking at across the major capitals:
| CITY | MEDIAN | 5% DEPOSIT | 10% DEPOSIT | 20% DEPOSIT |
| Sydney | $1.24 million | $62,000 | $124,000 | $248,000 |
| Melbourne | $977,579 | $48,879 | $97,758 | $195,516 |
| Brisbane | $1.01 million | $50,500 | $101,000 | $202,000 |
| Adelaide | $908,000 | $45,400 | $90,800 | $181,600 |
| Perth | $950,000 | $47,500 | $95,000 | $190,000 |
These figures are for the median dwelling only, meaning half of all properties in each city are priced above these levels. For buyers targeting houses specifically, the numbers climb further.
What this means in practice
For most Australians buying at or near the median, a 20% deposit is a significant savings challenge, particularly in Sydney, where the 20% target exceeds $248,000 before accounting for stamp duty and other purchase costs. This is precisely why government schemes and low-deposit loans have become so widely used.
But there’s an important flip side: Perth has led national growth at 17% annually, while Brisbane has grown at 9.5% and Adelaide at 12.5%. In fast-moving markets like these, every month spent saving a larger deposit could mean chasing a price point that’s already moved. Timing and strategy matter as much as the deposit itself.
This is where the numbers get nuanced, and where a buyer’s agent earns their place. A 5% deposit on a $950,000 Perth property is $47,500. But if you overpay by $40,000 at auction, you’ve effectively burned most of your buffer before you’ve made a single repayment. Moove exists to ensure that the property you buy at any deposit level is actually worth what you pay, so your hard-saved deposit works as hard as possible from day one.
Note: Median values are based on December 2025 / early 2026 data and will vary by property type, suburb, and market conditions. Always obtain current data and independent advice before purchasing.
Hidden Costs to Factor in Beyond the Deposit
Saving your deposit is a major milestone, but it’s not the finish line. One of the most common and costly mistakes Australian buyers make is arriving at settlement financially underprepared because they’ve budgeted for the deposit alone. A general rule of thumb is to allow an additional 5–7% of the property’s value to cover upfront costs like fees, insurance, and inspections. And in some states, that estimate can be conservative.
Here’s what to plan for:
Stamp Duty
This is typically the biggest cost after the deposit itself, and it catches more buyers off guard than almost anything else. It’s calculated on the purchase price and varies by state, property type, and buyer status. For a $700,000 home in NSW, a non-first home buyer may pay around $25,000 in stamp duty. For properties over $1 million (common in Sydney) stamp duty can easily exceed $40,000. First home buyers may be eligible for exemptions or concessions, but these don’t apply to all buyers or all property types.
Conveyancing and Legal Fees
A conveyancer handles the legal transfer of the property into your name, a process that involves strict legal regulations. Conveyancing services typically cost between $1,000 and $2,500, covering contract review, searches, settlement preparation, and title transfer. For more complex transactions, off-the-plan purchases or strata properties, costs can be higher.
Building and Pest Inspections
Inspections cost between $400 and $800 per report depending on the property type and region. And if you’re bidding on multiple homes, you may need several reports. Skipping them to save money is a false economy. A single undiscovered defect can cost far more to rectify than the inspection itself.
Lender Fees
Lenders may charge application or setup fees ranging from $0 to $700, plus valuation fees of $100 to $600, though these are often waived depending on the lender and loan type. Mortgage registration fees are also charged by state governments, though these tend to be smaller.
Lenders Mortgage Insurance (if applicable)
As previously mentioned, LMI can add thousands to your costs if your deposit is below 20% and you’re not covered by a government scheme. It’s worth treating this as a line item in your budget, not an afterthought.
Moving Costs and Utility Connections
Connecting electricity, gas, internet, and water often involves connection fees or deposits, and most lenders require building insurance to be in place from settlement day. Removalist costs vary widely but should be factored in, particularly for larger homes or interstate moves.
Council and Water Rate Adjustments
At settlement, costs are typically adjusted between buyer and seller based on what’s been prepaid. These adjustments can run into the thousands, particularly for apartments with body corporate levies.
The Bottom Line
On a $900,000 property, close to the national median, an additional 5–7% in purchase costs means budgeting an extra $45,000–$63,000 on top of your deposit. For many buyers, this is money that quietly erodes what they thought was a comfortable deposit buffer.
This is another area where overpaying for a property compounds the problem. Every dollar spent above fair market value is a dollar that can’t go toward these unavoidable costs. Moove helps buyers understand the true cost of a purchase before they’re committed, so there are no financial surprises waiting at settlement.
Common Mistakes That Can Cost You — Even After You’ve Saved Enough
Saving a deposit is a significant achievement. But for many Australian buyers, the costly mistakes don’t happen during the saving phase. They happen at the point of purchase. A 2025 First Home Buyer Report found that 45% of first-time buyers who purchased in the previous 12 months regretted their decision, with 47% having paid more than they initially budgeted, a 38% increase since 2022. Here are the four mistakes most likely to undo years of disciplined saving.
1. Using your entire savings as the deposit
Arriving at settlement with nothing left is one of the most common and avoidable traps. As covered in Section 5, purchasing a property comes with stamp duty, conveyancing fees, building and pest inspections, lender fees, and moving costs — easily adding 5–7% on top of the purchase price. Buyers who pour every dollar into the deposit can find themselves scrambling to cover these costs, taking on personal debt, or relying on family at the worst possible moment. A deposit and a buffer are not the same thing. You need both.
2. Not budgeting for hidden costs
Related but distinct: many buyers know the hidden costs exist in theory but fail to quantify them against their specific purchase. Beyond the upfront costs, ongoing expenses including council rates, utilities, strata fees, insurance, and general maintenance are often overlooked entirely during the budgeting phase. A property that appears affordable on paper can become genuinely stressful to hold once all obligations are accounted for. Budget for the full picture, not just the purchase price.
3. Emotional bidding
Property buying is inherently emotional, and Australian auction culture is specifically designed to exploit that. Auctions are engineered to push buyers beyond logic, adrenaline combined with live competition is a reliable recipe for overpaying. Buyers who attend auctions without a firm, pre-committed maximum, and the discipline to walk away when it’s reached, regularly pay prices that bear no relationship to what the property is actually worth. Industry professionals note that emotional buying consistently leads to overpaying and buyer’s remorse, and the risk is especially acute at auction.
4. Overpaying at auction
This is where the other three mistakes converge, and where the financial damage is most severe. Of those first home buyers who expressed regret, 26% specifically cited overpaying for their home as the reason, with 18% reporting they paid $50,000 or more above their initial budget, adding over $3,500 in additional annual loan repayments. On a 30-year mortgage, that $50,000 overpayment doesn’t cost $50,000. It costs significantly more once compounding interest is factored in. And buyers who entered with a low deposit are hit hardest, overpaying at auction can immediately tip a borderline equity position into negative territory.
How Moove Helps Buyers Avoid All Four
These mistakes share a common thread: they happen when buyers are emotionally invested, informationally underprepared, and negotiating alone against experienced vendors and agents whose entire job is to achieve the highest possible price.
This is precisely the problem a buyer’s agent exists to solve. Moove brings independent market research, comparable sales data, and experienced negotiation to every purchase, so you know what a property is genuinely worth before a single bid is placed. We set the ceiling based on evidence, not emotion, and we hold it. We also ensure clients have fully budgeted for the purchase from deposit through to settlement, so there are no financial surprises waiting on the other side.
Years of saving can be undone in minutes at an auction. The right advice before you bid is the most cost-effective investment you can make.
Tips to Save Your Deposit Faster
Knowing how much you need is one thing. Building it is another. With Australian property prices at record levels, saving a meaningful deposit requires more than just cutting back on coffee. Here are the strategies that can genuinely accelerate your timeline.
1. Use the First Home Super Saver Scheme (FHSS)
This is the most underutilised deposit-building tool available to Australian first home buyers, and it deserves to be at the top of the list. The FHSS scheme allows eligible buyers to make voluntary contributions to their superannuation fund, which can then be withdrawn to help fund a first home purchase. Concessional contributions are taxed at just 15% within the super fund, and assessable FHSS amounts benefit from a 30% tax offset upon withdrawal.
The annual contribution limit is $15,000 per financial year, with a lifetime maximum of $50,000. The real power for couples is significant: each person in a couple can independently access their own $50,000, for a combined total of $100,000 toward a deposit, and over three years, combined FHSS withdrawals can total approximately $80,000 to $84,000, compared to roughly $61,000 saving outside super. That’s over $20,000 in combined tax savings.
One critical process note: you must obtain an FHSS determination from the ATO before signing a property contract, so plan well ahead of your purchase.
2. Open a High-Interest Savings Account
Your deposit savings should be working for you while you build them. Dedicated high-interest savings accounts (HISAs) typically offer significantly better returns than standard transaction accounts. Term deposits are also worth considering, locking funds for a fixed period at a guaranteed rate provides both a competitive return and a psychological barrier to impulsive spending. Keep your deposit savings separate from your everyday account to reduce the temptation to dip into them.
3. Treat Your Deposit Like a Bill
Automating your savings on payday, before you have the chance to spend, is one of the most effective behavioural strategies available. Set up an automatic transfer to your HISA or super fund the day your salary hits. What you don’t see, you don’t spend.
4. Audit Your Expenses Ruthlessly
A full budget audit often reveals more savings capacity than people expect. Subscription services, dining out, unused gym memberships, and buy-now-pay-later commitments all chip away at deposit progress. Closing unused credit cards and BNPL accounts at least 90 days before applying for a home loan also helps. Lenders like to see a clean credit profile for at least three months before assessment.
5. Consider a Guarantor
If you have a parent or close family member with equity in their own property, a guarantor loan can allow you to purchase sooner with a smaller deposit, and in some cases avoid LMI entirely. This isn’t a strategy for everyone, but for buyers with a family safety net it can significantly compress the savings timeline.
6. Don’t Save in Isolation — Know Your Target
One of the biggest mistakes buyers make is saving without a clear number in mind. As previously mentioned, your target isn’t just the deposit. It’s the deposit plus stamp duty, legal fees, inspections, and a buffer. Saving toward a moving target is demoralising; saving toward a specific, well-researched figure is achievable.
Here’s where a buyer’s agent changes the equation. Saving faster matters, but so does saving enough. Many buyers reach their deposit goal only to overpay at auction, effectively spending years of disciplined saving in a single underprepared bidding decision. Moove helps ensure that when you’re finally ready to buy, you don’t give back your hard-won savings at the negotiating table. The goal isn’t just getting into the market. It’s getting in at the right price.
The FHSS scheme involves complex tax rules. Always seek advice from a licensed financial adviser or registered tax agent before making contributions or withdrawal decisions.
How Long Will It Take to Save? A Realistic Timeline
This is the question most buyers eventually ask, and the honest answer is one that many people find confronting. At current savings rates, after rent and living expenses, the average Australian takes 11 years to save a 20% deposit on the median dwelling nationally. In Sydney, where median house values are approaching $1.75 million, that timeline stretches even further.
The numbers by deposit size
The gap between saving 5% versus 20% is enormous, and it changes the entire calculus of when to buy.
On a $900,000 property, a 20% deposit is $180,000. At a household savings rate of $1,500–$2,000 per month, that’s 7–10 years. A 5% deposit on the same property is $45,000, achievable in 18–30 months at the same savings rate.
Savings timelines by city (20% deposit, entry-level property)
Domain’s analysis, based on a couple aged 25–34 saving for an entry-level property with a 20% deposit, shows how long the journey is across the capitals:
Adelaide buyers typically require around 5 years and 7 months for a house deposit; Perth buyers around 5 years and 4 months; Hobart around 5 years; and Canberra around 5 years and 1 month. Darwin remains the most accessible market at around 4 years for houses. Sydney and Melbourne, with their higher entry-level prices, sit at the longer end of the spectrum.
Critically, the time required to save a deposit increased in all eight capital cities for houses during 2025, despite three interest rate cuts, because rising prices for entry-level homes offset the benefits of lower mortgage rates and government support programs.
The moving target problem
This is the aspect of deposit-saving that rarely gets discussed clearly: while you’re saving, prices are often rising. The 20% deposit on the national median of approximately $922,000 is roughly $184,000. On a median full-time annual wage of approximately $100,000, saving that amount requires near-total sacrifice of discretionary spending, and assumes prices do not continue rising in the meantime.
For many buyers, the maths of waiting simply doesn’t stack up. In a market rising at 8–10% annually, the property you’re saving toward may cost $70,000–$90,000 more by the time you’ve saved enough to meet the 20% threshold. This is why so many buyers, particularly first home buyers, are now making strategic use of low-deposit options and government schemes rather than waiting for a “perfect” deposit.
But timing isn’t everything — price is
Entering the market sooner can make sense, but it only holds if you buy well. Mortgage serviceability nationally now sits at 45.9% of gross household income, against a long-run average of 34.3%. Buyers entering with thin deposits and high loan-to-value ratios have very little room for error. Overpaying by even 3–5% at purchase can mean years of additional repayments and a deeply compromised equity position.
This is ultimately where Moove’s role comes full circle. Whether you’re buying with a 5% deposit after two years of saving, or a 20% deposit after a decade of discipline, the deposit is only the starting point. The price you pay for the property determines everything that comes after: your equity position, your borrowing costs, your financial flexibility, and your ability to build wealth over time. Getting into the market is the goal. Getting in at the right price, on the right property, is the strategy.
That’s exactly what we help our clients do every day.
House Deposit in Australia: Final Tips for Home Buyers
When it comes to buying a house in Australia, the right deposit isn’t simply the biggest one you can save, it’s the one that gets you into the market safely and strategically. A 20% deposit remains the benchmark because it can help you avoid Lenders Mortgage Insurance and access better loan terms, but lower-deposit pathways, government guarantees, and grants have made home ownership more achievable than ever for many buyers.
The key is understanding the full picture: your deposit size, the hidden purchase costs beyond it, the risks of stretching too far, and the reality that timing and property price matter just as much as the percentage you bring to the table. If you’re still asking how much deposit do you need to buy a house in Australia, the answer depends on far more than a single percentage. In a market where overpaying can wipe out years of saving in a single transaction, expert guidance can make all the difference.
Moove helps buyers navigate this process with confidence, from understanding what deposit strategy makes sense for their situation to ensuring they buy the right property at the right price.
If you want to make your deposit go further, avoid costly mistakes, and enter the market with a smarter plan, get in touch with Moove today to see how we can help you buy better.
