How Much Deposit Do You Really Need?
Breaking down deposit requirements and exploring low-deposit options for Australian buyers.
The traditional advice is to save 20% of the property price as a deposit. But is that really necessary? Let's break down your options and what each deposit level means for you.
Deposit Levels Explained
$100,000
$500,000 property
Advantages
No LMI required
Best interest rates
More equity from day one
Considerations
Takes longer to save
Property prices may rise while saving
$50,000
$500,000 property
Advantages
Buy sooner
LMI cost is moderate
Many lender options
Considerations
LMI adds to costs
Higher monthly repayments
$25,000
$500,000 property
Advantages
Get into market quickly
Government schemes available
Build equity instead of renting
Considerations
Higher LMI costs
Fewer lender options
Higher rates possible
Low-Deposit Options
First Home Guarantee
Buy with 5% deposit, no LMI. Limited spots available each year.
Eligible: First home buyers under income caps
Family Guarantee
Use parents' property as additional security to avoid LMI.
Eligible: Buyers with family willing to help
Regional First Home Buyer Guarantee
5% deposit for regional property purchases.
Eligible: Buyers purchasing in regional areas
Lender-Specific Programs
Some lenders offer 5-10% deposit loans with competitive rates.
Eligible: Varies by lender
Don't Forget Additional Costs
Your deposit isn't your only upfront cost. Budget for these expenses too:
Varies by state, exemptions for FHB
Property transfer costs
Essential before purchase
Can be added to loan