How much deposit do you really need to buy a house?
The deposit question is one of the first things every home buyer asks and the answer is more flexible than most people think. You don't necessarily need 20% saved before you can buy. Here's how it actually works.
The three deposit thresholds
Minimum with government scheme
Possible with the First Home Guarantee no LMI required if you qualify.
Most common starting point
Accessible for many buyers. LMI applies but manageable. More lenders available than at 5%.
Avoid LMI entirely
At 20%+ you pay no Lenders Mortgage Insurance and access the widest range of rates.
What is Lenders Mortgage Insurance (LMI)?
LMI is insurance that protects the lender, not you if you default. It's charged when your deposit is less than 20% of the property value (LVR above 80%).
LMI can be paid upfront or added to your loan. Rough costs:
- $700,000 loan at 90% LVR: approximately $15,000–$20,000
- $700,000 loan at 95% LVR: approximately $25,000–$30,000
Not necessarily. If property prices are rising faster than you can save, getting in with LMI may be cheaper than waiting. A broker can model this for your specific situation.
Other costs you need to budget for
Your deposit is just one part. Budget for these on top:
- Stamp duty — in QLD on a $700K property, roughly $20,000–$24,000 (FHB concessions may apply)
- Legal / conveyancing fees — $1,500–$3,000
- Building and pest inspection — $400–$800
- Loan establishment fees — $300–$600 (many lenders waive)
- Moving costs — $1,000–$3,000
Rule of thumb: budget 3–5% of the purchase price on top of your deposit for these costs.
What counts as a genuine deposit?
- Money saved in a bank account (3 months of statements required)
- Term deposits and managed funds
- Equity from an existing property
- A gift from a family member (with a statutory gift declaration)
- First Home Super Saver Scheme (FHSSS)
Government schemes that can help
First Home Guarantee (FHBG)
Buy with 5% deposit and no LMI. The government guarantees up to 15% of the purchase price. Income caps apply ($125K single, $200K couples).
Queensland First Home Owners' Grant
Up to $30,000 for eligible buyers purchasing or building a new home under $750,000 in Queensland.
First Home Super Saver Scheme (FHSSS)
Save inside your super at lower tax rates. Withdraw up to $50,000 per person when ready to buy.
Not sure what you qualify for?
We'll check your eligibility for every scheme and map out your fastest path to purchase.
What if you don't have a deposit yet?
Talk to a broker now — not when you've hit your savings target. We can tell you exactly how much you need, which schemes you'll qualify for, and how to structure your savings correctly. Most people reach their target faster once they know exactly what they're aiming for.