How much deposit do I need for a home loan?
Most first home buyers in Australia don't save a 20% home loan deposit before buying. You can purchase with as little as 2% deposit, depending on your eligibility for government schemes. This page breaks down the four deposit tiers, the minimum deposit for a home loan at each level, and the exact dollar amounts you need on a $650K property. Explore your first home buyer loans options and find the pathway that fits your savings right now.
What each deposit tier actually costs you
Saving $130,000 feels impossible for most people. That's because it is unnecessary for most first home buyers.
Here's what a $650,000 property looks like at each deposit level.
2% deposit (Help to Buy scheme)
- Deposit: $13,000
- LMI: $0 (government takes an equity share)
- Stamp duty: $0 with first home buyer concession in most states
- Estimated total upfront cash: ~$16,000 to $17,500 (including legal fees and inspections)
5% deposit (First Home Guarantee)
- Deposit: $32,500
- LMI: $0 (government guarantee replaces LMI)
- Stamp duty: $0 with first home buyer concession in most states
- Estimated total upfront cash: ~$35,000 to $37,000
10% deposit (no scheme)
- Deposit: $65,000
- LMI: $8,000 to $12,000 (varies by lender)
- Stamp duty: $0 with first home buyer concession in most states
- Estimated total upfront cash: ~$75,000 to $80,000
20% deposit (no scheme needed)
- Deposit: $130,000
- LMI: $0
- Stamp duty: $0 with first home buyer concession in most states
- Estimated total upfront cash: ~$133,000 to $135,000
The gap between $35,000 and $130,000 is years of extra saving. For many buyers, those years also mean chasing rising property prices.
LMI is not a penalty. It's the cost of buying sooner. Paying $10,000 in LMI today can save you far more than waiting. On a $650K property, a 5% price rise adds $32,500 to the purchase price, which can wipe out the saving you thought you were making by delaying. LMI also varies by lender, and some lenders let you capitalise it into the loan, so comparing options matters.
Real example: Sarah, 28, saved $35K over 18 months. She bought a $680K townhouse in Western Sydney using the First Home Guarantee. Her total upfront costs were $38,200 including conveyancing and inspections. She avoided $26,000 in stamp duty and paid $0 in LMI.
Want to run the numbers for your property price and deposit? Use our home loan deposit calculator to see where you stand.
Government schemes that reduce your deposit
These are the main first-home buyer pathways in Australia, not edge-case workarounds. With government support, the minimum deposit can drop to 2%, and a broker can help match you to the right scheme.
First Home Guarantee (5% deposit)
The government guarantees up to 15% of the property value, so you avoid LMI entirely. Since 1 October 2025 there are no income caps or waitlists. It's the most common pathway for buyers buying with a 5% deposit, and a broker can often find another lender if one allocation is full.
Help to Buy (2% deposit)
The government takes an equity share, which reduces what you borrow and can let you buy with a 2% deposit. The Help to Buy scheme suits buyers with steady income but limited savings.
First Home Owner Grant
A one-off state government payment that boosts your deposit savings. It usually applies to new builds, and while it won’t cover the full deposit, it can speed up your timeline when combined with a guarantee scheme.
Stamp duty concessions
First home buyers in many states pay reduced or zero stamp duty, which is why upfront costs can be much lower than expected. Check your state's first home buyer stamp duty concessions to see what you could save.
Guarantor loans: how your family can help without handing over cash
A guarantor loan lets a family member use equity in their own property as additional security for your home loan. They don't give you money, and your repayments remain your responsibility.
This can allow you to buy with no deposit at all and avoid LMI entirely. No deposit home loans through the guarantor pathway are one of the most common ways Australians buy their first property.
Many first home buyers feel uncomfortable asking for this kind of help. But guarantor loans are a structured financial product, not a handout. Your parents' property is used as security for a limited portion of the loan, and the guarantee is released once you've built enough equity through repayments or property growth.
Here's how it works in practice. The guarantee covers a portion of the loan, often up to 20% of the property value. On a $650K property, that's up to $130,000 in security provided by the guarantor's equity. Your lender treats the loan as if you have a 20% deposit, so no LMI applies.
What to know before using a guarantor loan
The risks are real. If you default on the loan, the guarantor's property can be at risk for the guaranteed portion. Both sides should get independent legal and financial advice before proceeding.
The guarantee does not last forever. Once your loan-to-value ratio drops below 80%, through repayments or rising property values, you can apply to release it. Many borrowers do this within 5 to 7 years.
Lender policy also matters. Some lenders cap the guarantee amount, while others limit which family members can act as guarantor.
This is why most guarantor conversations are short but structured. We explain the setup to both sides and connect everyone with independent advisors before any commitment.
Genuine savings for your home loan deposit: what lenders want to see
Your home loan deposit needs to include a genuine savings component. This isn't designed to catch you out. It's a financial health check that shows lenders you can manage money and handle repayments.
The pattern matters more than the amount.
01
What genuine savings means
Most lenders want to see at least 5% of the purchase price saved by you over a minimum of 3 months. It shows a pattern of regular saving, not a one-off windfall.
02
What counts
Regular savings in your own account, term deposits, shares or managed funds held for 3+ months, and equity in an existing property. Some lenders also accept a strong rental history.
03
What doesn't count
A last-minute gift, personal loans, credit card cash advances, or borrowed family funds without any genuine savings alongside them.
04
Gift deposits aren't a dealbreaker
You can combine a gift with genuine savings. Many lenders will accept that mix as long as part of the deposit is clearly yours and the donor signs a letter confirming the gift is non-repayable.
Beyond your home loan deposit: total upfront costs to budget for
Stamp duty (transfer duty)
Often the biggest cost after the deposit, and sometimes $0 for eligible buyers. Check your state's stamp duty concessions for first home buyers to confirm the saving.
Conveyancing and legal fees
Budget $1,500 to $3,000 for the legal transfer of the property into your name. This cost applies to every purchase.
Building and pest inspections
Budget $500 to $1,000 before you commit. Skipping inspections can be far more expensive if structural issues show up after settlement.
Loan application and settlement fees
Some lenders charge $0 to $600 in setup or settlement fees. A broker can help you avoid lenders with unnecessary extras.
LMI (if applicable)
Covered in the deposit tier breakdown above. Under government guarantee schemes, LMI usually does not apply at all.
The real total
On a $650K property with a 5% deposit under the First Home Guarantee, total upfront cash is usually around $35,000 to $37,000. Without stamp duty concessions, you may need another $20,000+.
Frequently asked questions
Find out which deposit pathway fits your situation
Book an obligation-free call with a Stryve broker. We'll review your savings, check your scheme eligibility, and map out the fastest path to buying at the deposit level that works for you. No pressure, no surprises.
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