Keep buying costs separate
Ask for estimates of legal or conveyancing work, building and pest or strata checks, loan-related charges, insurance and state-specific duties or concessions.
How Much Deposit Do First Home Buyers Need?
How Much Deposit Do First Home Buyers Need?
There is no single deposit number that fits every first home buyer. A realistic target combines the property price, your likely lending position, purchase costs, cash buffer and any government program you may qualify for.
Deposit examples: 5%, 10% and 20%
These figures show the cash deposit only. They exclude legal or conveyancing fees, inspections, lender charges, insurance, moving costs, state duties and other purchase costs. “Amount still to fund” is simply price minus a 20% deposit—not a loan approval or repayment quote.
| Illustrative purchase price | 5% deposit | 10% deposit | 20% deposit | Amount still to fund after 20% |
|---|---|---|---|---|
| $500,000 | $25,000 | $50,000 | $100,000 | $400,000 |
| $650,000 | $32,500 | $65,000 | $130,000 | $520,000 |
| $800,000 | $40,000 | $80,000 | $160,000 | $640,000 |
A 20% deposit is often discussed because it can avoid lenders mortgage insurance (LMI) with a conventional loan. It is not the only way to buy. A smaller deposit can mean a larger loan and potentially LMI unless a qualifying program or lender arrangement applies.
Government incentives: how they can help
A government pathway can do more than reduce the cash you need today. Depending on the program, it may help you buy sooner, avoid LMI or reduce the private loan. Eligibility, property-price caps, participating-lender rules and ongoing obligations still matter.
| Program | Potential benefit | What to check |
|---|---|---|
| Australian Government 5% Deposit Scheme | Eligible first home buyers may buy with a minimum 5% deposit and no LMI. The official program says no income caps or waitlists have applied since 1 October 2025. | You still need to qualify with a participating lender. Check current eligibility and the property price cap for the location. |
| Australian Government Help to Buy Scheme | Eligible buyers can use a minimum 2% deposit. The Government can contribute up to 30% for an existing home or 40% for a new home, potentially reducing the private loan and removing LMI. | This is shared equity, not a free grant: the Government shares proportionally in gains or losses when you sell or buy out its interest. Income, price and ongoing rules apply; annual places are limited. |
| First Home Super Saver Scheme | Eligible buyers can use voluntary super contributions to build a deposit; the official guide states up to $15,000 voluntary contributions per year and $50,000 total may be released. | Super and tax rules are detailed. Check the ATO process, timing and eligibility before changing contributions or making an offer. |
Worked illustration: a $650,000 home
This compares funding structures only. It excludes purchase costs, interest, lender fees and LMI. It is not a recommendation or a statement that you would qualify.
| Illustrative structure | Buyer cash deposit | Government contribution | Private amount to finance |
|---|---|---|---|
| 20% deposit, no government program assumed | $130,000 | — | $520,000 |
| 5% deposit before assessing program eligibility | $32,500 | — | $617,500 |
| Help to Buy: existing-home maximum Government contribution | $13,000 | Up to $195,000 (30%) | $442,000 |
| Help to Buy: new-home maximum Government contribution | $13,000 | Up to $260,000 (40%) | $377,000 |
Important: a lower upfront deposit can help you enter sooner, but the long-term position changes. Under Help to Buy, the Government contribution is equity in the home—not a cash grant—and shared-equity exit rules apply.
Do not spend your full savings on the deposit
Leave a post-settlement buffer
Moving, utility connections, repairs and ordinary living costs still arrive after you get the keys. A buffer gives you room to respond without relying on debt.
Use the official tools
Before relying on a program, check its current official eligibility and price-cap tools, then speak with a participating lender and suitable advisers.
Five questions before making an offer
- What price range fits my likely repayments and household budget?
- How much cash do I need for the deposit and all purchase costs?
- Could a 5% Deposit Scheme, Help to Buy or First Home Super Saver pathway be relevant?
- What are the current price caps and eligibility requirements for my location?
- After settlement, will I still have a cash buffer?
For contracts, inspections and location research, read what first home buyers need to be aware of.
Start with a property range, then test the numbers
Explore available properties, build a complete budget and obtain financial, lending and legal guidance suited to your circumstances before you make an offer.
General information only, checked 3 October 2026. Not legal, tax, financial or lending advice. Government program rules, price caps, places, lender criteria, duties and concessions can change. Check official program pages and obtain advice for your circumstances.
