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Most lenders in Australia require a deposit of 5% to 20% of the property’s purchase price. In real terms, that could mean anywhere from $25,000 to $200,000 or more, depending on what you’re buying and where.
That’s the standard answer. But one important detail often gets missed: buyers typically don’t pay the entire deposit upfront in one lump sum. Instead, part of the deposit is usually paid to secure the property, with the remaining cost paid at settlement.
When saving for a deposit, many buyers focus on hitting a target number as quickly as possible. But that’s not the only way to approach it.
This guide looks beyond the headline figure. It will help you understand how different deposit strategies work, and how to prepare your deposit in a way that supports your broader financial position.
How much deposit do you need to buy a house?
The amount you need for a house deposit depends on both the property price and the deposit percentage required by your lender. Here’s what different deposit amounts can look like in practice.
Based on the latest Australian Bureau of Statistics data, here’s how mean dwelling prices and typical deposit ranges compare across each state and territory:
| State/Territory | Mean Price | 5% Deposit | 10% Deposit | 20% Deposit |
| NSW | $1,301,100 | $65,000 | $130,000 | $260,000 |
| VIC | $933,100 | $47,000 | $93,000 | $186,000 |
| QLD | $1,066,000 | $53,000 | $107,000 | $213,000 |
| SA | $938,100 | $47,000 | $94,000 | $188,000 |
| WA | $1,014,200 | $51,000 | $101,000 | $203,000 |
| TAS | $703,800 | $35,000 | $70,000 | $141,000 |
| ACT | $973,800 | $49,000 | $97,000 | $195,000 |
| NT | $580,000 | $29,000 | $58,000 | $116,000 |
Source: Australian Bureau of Statistics, Mean dwelling prices (Dec 2025)
In many cases, buyers don’t need to pay the full deposit amount upfront in cash at exchange. Depending on the purchase structure, some buyers use alternatives like deposit bonds, equity or government schemes to help manage upfront costs.
In general:
- 5% is often the minimum (usually with Lenders Mortgage Insurance)
- 20% helps you avoid LMI and access more loan options
Keep in mind that the property deposit does not need to be paid all at once. In many cases:
- An upfront deposit of 5% to 10% is provided to the vendor to secure the property.
- The remaining deposit cost is then paid at settlement.
What many buyers misunderstand about house deposits
Many buyers think they need the full 20% deposit sitting in cash before they can buy. For some buyers, waiting to save a bigger deposit can actually move the goalposts further away.
In reality, buyers often use a combination of savings, equity, government schemes and deposit alternatives to secure property sooner.
(Infographic placed here if possible with cost/split examples)
20% deposit – the gold standard (and why it’s not always necessary)
A 20% deposit is often seen as the benchmark. It can help you avoid Lenders Mortgage Insurance (LMI) and put you in a stronger position with lenders.
But it’s not the only way to buy.
In reality, many Australians don’t have 20% sitting in cash. And waiting years to save it can come with its own cost, especially if property prices rise or your circumstances change in the meantime.
For many buyers, the smarter question isn’t “How do I get to 20%?” but “What’s the most effective way to move forward based on where I am now?”
Can you buy a house with a 5% or 10% deposit?
Yes, it’s possible to buy a home with a 5% or 10% deposit in Australia.
Some first home buyers may be eligible for the Australian Government’s 5% Deposit Scheme, which allows you to purchase with as little as 5% without paying LMI (subject to eligibility criteria and property price caps).
Outside of government schemes, some lenders will still accept a 5% or 10% deposit, but this usually comes with trade-offs. You may need to pay LMI and potentially face higher repayments depending on your loan structure.
So while a lower deposit can help you get into the market sooner, it’s important to weigh up the full cost, not just the upfront amount.
What other costs do you need to budget for?
Your deposit is a big piece of the puzzle, but it’s not the only cost to plan for.
When buying a property, there are several upfront expenses that can add up quickly. Understanding these early will help you move forward with confidence.
Lenders Mortgage Insurance (LMI)
Lenders Mortgage Insurance (LMI) is a one-off cost that usually applies when your deposit is less than 20% of the property’s value.
It’s important to know that LMI protects the lender, not you. If you default on your loan, the lender is covered, but you’re still responsible for the debt.
The cost can vary depending on your loan size and deposit, but as a guide, LMI can range from $10,000 to $30,000+. In some cases, it can be added to your loan, but that means paying interest on it over time.
While LMI can help you get into the market sooner with a smaller deposit, it’s a cost worth factoring into your overall strategy.
Stamp duty, legal fees and upfront costs
Stamp duty is often the largest upfront cost when buying a property. It varies by state and property value, but can run into tens of thousands of dollars. Some first home buyers may be eligible for concessions or exemptions, depending on where they buy.
You’ll also need to allow for conveyancing or legal fees, which cover the contract review and settlement process, as well as building and pest inspections to assess the property before purchase.
Other costs can include loan application fees, registration fees and moving expenses. All of these will need to be factored into your plans when saving for a property deposit.
Is cash always the best way to pay your deposit?
Paying your deposit in cash is the most common approach, but it’s not always the best.
Depending on your situation, relying solely on cash can put unnecessary pressure on your finances or limit your flexibility. Here’s how that can play out in practice:
| Buyer type | Current situation or challenge | Why cash isn’t always ideal | Alternative approaches to consider |
| First home buyers | Saving for a deposit while managing rising property prices and lending requirements | Saving a large cash deposit can take years, and property prices may rise in the meantime | Government schemes (e.g. First Home Guarantee), lower deposit options, deposit alternatives |
| Upsizers, downsizers or buyers purchasing before selling | Equity tied up in an existing property while also needing funds for a new purchase and upfront costs | Cash may be locked in the current property, creating timing and cash flow challenges | Bridging finance, using equity, deposit alternatives |
| Property investors | Looking to grow a portfolio while managing cash flow and returns | Tying up large amounts of cash in a deposit can reduce liquidity and limit other investment opportunities | Using equity, structuring deposits to preserve capital |
| Off-the-plan buyers | Required to pay a deposit at exchange, with settlement often months or years away | Cash can be tied up for an extended period, limiting flexibility during construction | Deposit alternatives that allow funds to remain accessible during the build period |
Ultimately, there’s no one-size-fits-all approach.
The key is understanding your options and choosing a deposit strategy that supports your broader financial position, not just the purchase itself.
Smarter ways to pay your house deposit
If cash isn’t your only option, what else is available?
Depending on your situation, there are a range of ways to structure your deposit that can help you make better use of your existing resources.
Deposit bonds – a strategic alternative to cash
A deposit bond is an insurance-backed guarantee that replaces the need to pay the upfront 10% cash deposit at exchange.
Instead of transferring funds at exchange, you provide a deposit bond to the seller as a commitment to complete the purchase. You then pay the full purchase price, including the deposit amount, at settlement.
Deposit bonds are commonly used by buyers who:
- Want to keep their savings or investments available until settlement
- Are waiting on funds from a future sale
- Are purchasing off-the-plan and want to avoid tying up cash for an extended period
They’ve grown in popularity because they offer flexibility without delaying your purchase, allowing you to secure a property while keeping your money working for you.
Learn more about deposit bonds.
Using equity from an existing property
If you already own property, you may be able to use your available equity instead of cash for your deposit.
Equity is the difference between your property’s value and what you still owe on your loan. By accessing that equity, you can use it as security to fund your next purchase.
This approach can suit:
- Upsizers buying before selling
- Downsizers transitioning between homes
- Investors looking to expand their portfolio
In some cases, buyers combine equity with a deposit bond to manage timing and cash flow, particularly when buying and selling at the same time.
H3: Guarantor support and government schemes
Some buyers may be able to purchase with support from a guarantor or through government-backed schemes.
The Australian Government’s 5% Deposit Scheme allows eligible first home buyers to purchase with as little as a 5% deposit without paying LMI, while the Family Home Guarantee supports eligible single parents or guardians.
Guarantor home loans involve a family member offering part of their property as security, which can reduce or eliminate the need for a cash deposit.
These options can be effective in the right circumstances, but they come with specific eligibility criteria and responsibilities, so it’s important to understand how they work before proceeding.
First Home Super Saver Scheme (FHSSS)
The First Home Super Saver Scheme (FHSSS) allows eligible first home buyers to make voluntary contributions into their super and later withdraw them to help fund a deposit.
You can currently contribute up to $15,000 per year, with a total withdrawal cap of $50,000 per person (subject to eligibility and ATO rules).
This can be a tax-effective way to build a deposit over time. However, there are limitations to consider, including contribution caps, eligibility requirements and processing time when releasing funds.
Like any deposit strategy, it’s worth understanding how it fits with your broader plans before relying on it.
Plan your deposit strategy early
The smartest move isn’t just saving more for your deposit. It’s planning how you’ll pay it.
The earlier you understand your options, the more control you have. You can structure your deposit in a way that helps you move quickly when the right opportunity comes up.
What matters most is having a clear plan before you start making offers or signing contracts.
Before you start making offers, it’s worth understanding how different deposit approaches may affect your cash flow, borrowing power and flexibility. Our House Deposit Guide can help you compare your options and plan a strategy that suits your situation.
You can also use our deposit calculator to explore how different deposit options may impact your finances.
