If you're wondering how much deposit you need for a home loan in Australia, you're not alone. Whether you're a first home buyer or looking to invest, understanding deposit requirements is crucial to getting loan approval and avoiding extra costs like Lenders Mortgage Insurance (LMI).

Standard Home Loan Deposit Guidelines

20% Deposit

The traditional recommendation is a 20% deposit. This helps you avoid LMI, a one-off insurance premium that protects the lender (not you) if you default on the loan. Avoiding LMI can save you thousands.

10% Deposit for Auctions

Thinking of buying at auction? You'll generally need at least a 10% deposit on the day. In some cases, vendors may agree to a smaller deposit if negotiated beforehand.

Can’t Reach 20%? Here Are Alternative Low Deposit Home Loan Options

1. Guarantor Loans and Equity Use

Guarantor Loans: A family member, often a parent, can act as a guarantor using their property as security. This option can let you borrow with zero deposit which is ideal for first home buyers.

Using Existing Equity: Already own a home? You may be able to use the equity in your property as a deposit for your next purchase with no cash required.

2. Low Deposit Home Loans From 2%

Some lenders offer home loans with deposits as low as 2% to 5% of the property’s value. These options usually come with stricter lending criteria and may involve LMI, Low Deposit Premiums and/or higher interest rates but they can help you get into the market sooner.

3. Government Schemes to Help

In Australia, several government initiatives are designed to make homeownership more achievable, particularly for first home buyers, regional purchasers, and single-parent families. These schemes can reduce the deposit you need, help you avoid Lenders Mortgage Insurance (LMI), or even contribute directly to your property purchase. Each program has its own eligibility criteria and benefits, we can  explore which options might suit your situation.

Current Schemes Include: 

• First Home Guarantee (FHBG)

• Regional First Home Buyer Guarantee (RFHBG)

• Family Home Guarantee (FHG)

• Help to Buy Scheme

• First Home Super Saver Scheme (FHSSS)

• First Home Owner Grant (FHOG) (State based Schemes)

• Stamp Duty Concessions and Exemptions (State based schemes)

Other Costs to Consider When Buying a Home

Many first home buyers focus on the deposit, but it’s just one part of the total cost of buying a property. To avoid surprises and budget confidently, make sure you account for the following home buying fees and charges:

Stamp Duty

One of the largest upfront costs, stamp duty is a state government tax based on the property's value. The amount you pay varies by state, and exemptions or concessions may be available for first home buyers.

👉 Tip: Speak to us to find out what you’ll pay in your state or territory.

Loan Application and Bank Fees

Banks and lenders may charge:

• Loan application or establishment fees

• Valuation fees

• Settlement fees

• Ongoing account-keeping fees

While some lenders waive these charges, it’s important to compare your total loan costs, not just the interest rate.

Conveyancing and Legal Fees

A conveyancer or solicitor will handle the legal aspects of your property purchase, including title checks, contract reviews, and settlement arrangements. Costs usually range from $1,000 to $2,500 depending on the complexity.

Building and Pest Inspections

Before you commit to a purchase, especially for existing homes, a building and pest inspection is strongly recommended. Expect to pay around $400 to $800 — and potentially save thousands by identifying major issues early.

Ready to Take the Next Step Toward Homeownership?

Whether you're a first home buyer or exploring government schemes to boost your deposit, we’re here to help you make confident, informed decisions.

📞 Enquire today for a free discovery call today and let’s find the right path to homeownership based on your goals, budget, and eligibility.