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Property deposits in Australia vary significantly depending on your buyer status, location, and loan type.
As of September 2025, most lenders require a minimum 5% deposit, but 20% is needed to avoid Lenders Mortgage Insurance. First-home buyers can access government schemes allowing deposits as low as 2-5% without additional insurance costs, while investment properties typically require 10-20% deposits.
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Australian property deposits range from 2% to 20% depending on your circumstances and loan type. First-home buyers benefit from government schemes that eliminate Lenders Mortgage Insurance on deposits as low as 5%.
Investment properties require higher deposits of 10-20%, with additional costs including stamp duty ranging from 3-8% of property value across different states.
| Buyer Type | Minimum Deposit | To Avoid LMI | Government Support |
|---|---|---|---|
| First-Home Buyer | 2-5% | 5% (with scheme) | Home Guarantee Scheme |
| Owner-Occupier (not first home) | 5% | 20% | Limited |
| Investment Property | 10% | 20% | None |
| Single Parent | 2% | 2% (with scheme) | Family Home Guarantee |
| Regional Property Buyer | 5% | 5% (with scheme) | Regional First Home Guarantee |
| Guarantor Loan | 0% | 0% | Family support required |
| Using Home Equity | 0% cash | Varies | Existing property required |
How much is the average property price in the city or suburb I'm looking at in Australia?
Australian property prices vary dramatically by location and property type as of September 2025.
Sydney remains the most expensive market with median house prices reaching $1.49 million and units averaging $860,000. Melbourne follows with houses at $952,000 and units at $621,000. Brisbane has seen significant growth with houses now averaging $1.02 million and units at $658,000.
Perth continues its strong performance with houses at $870,000 and units at $616,000, while Adelaide sits at $896,000 for houses and $611,000 for units. Darwin offers the most affordable capital city prices with houses around $647,000.
Regional areas typically offer more affordable options, with properties often 20-40% below capital city prices. However, specific suburbs within each city can vary significantly from these median figures.
Properties under $500,000 are generally available in outer suburbs of major cities or regional areas, making them accessible entry points for first-time buyers.
What percentage of the property price do banks usually require as a minimum deposit?
Most Australian lenders require a minimum deposit of 5% for owner-occupier properties and 10% for investment properties.
However, the standard recommendation remains 20% to avoid paying Lenders Mortgage Insurance (LMI). This 20% deposit keeps your Loan-to-Value Ratio (LVR) at 80%, which lenders consider low-risk.
For investment properties, many lenders prefer 20% as the minimum to offer competitive interest rates and avoid LMI charges. Some specialized lenders may accept 10% for investment properties, but this typically comes with higher interest rates and mandatory LMI.
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The exact percentage can vary between lenders, with some offering more flexible options for borrowers with strong financial profiles or existing property equity.
How much deposit do I need if I want to avoid paying Lenders Mortgage Insurance (LMI)?
To avoid LMI completely, you need a 20% deposit for both owner-occupier and investment properties.
However, first-home buyers can avoid LMI with just a 5% deposit through the Home Guarantee Scheme, which launches with unlimited places from October 1, 2025. Single parents can avoid LMI with as little as a 2% deposit through the Family Home Guarantee.
For a $500,000 property, this means you need $100,000 to avoid LMI traditionally, but eligible first-home buyers need only $25,000 (5%) or single parents just $10,000 (2%) under government schemes.
Investment property buyers cannot access these government schemes and must save the full 20% deposit to avoid LMI charges, which can range from $8,000 to $20,000 on a $500,000 investment loan.
What's the smallest deposit possible if I'm okay with paying LMI?
The absolute minimum deposit for most standard home loans is 5% if you're willing to pay LMI.
Some lenders may accept as low as 2-3% in exceptional circumstances, particularly for borrowers with very strong income and credit profiles. However, this results in extremely high LMI costs and monthly repayments.
For a $500,000 property with a 5% deposit ($25,000), LMI costs typically range from $15,000 to $20,000, which is added to your loan amount. With a 10% deposit ($50,000), LMI costs reduce to approximately $8,000 to $12,000.
Guarantor loans allow 0% cash deposits, where family members use their property equity as security, though this puts their property at risk if you default.
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Are there government grants or first-home buyer schemes that can reduce the deposit I need?
Australia offers several generous government schemes to help first-home buyers enter the property market with smaller deposits.
The Home Guarantee Scheme is the primary support mechanism, allowing eligible first-home buyers to purchase with just a 5% deposit without paying LMI. From October 2025, this scheme has unlimited places and no income caps, making it accessible to all first-home buyers.
The Family Home Guarantee supports single parents with deposits as low as 2%. Regional buyers can access similar 5% deposit schemes with no LMI through the Regional First Home Guarantee.
First Home Owner Grants (FHOG) provide cash payments of $10,000 to $30,000 depending on your state, specifically for new properties. Many states also offer stamp duty exemptions or concessions for first-home buyers on properties under certain value thresholds.
Do I qualify for any of those government programs or subsidies?
First-home buyer eligibility is straightforward: you must be an Australian citizen or permanent resident who has never owned property before.
For the Home Guarantee Scheme, you must intend to live in the property as your primary residence and meet basic income requirements. As of October 2025, there are no income caps, making virtually all first-home buyers eligible.
Single parents qualify for the Family Home Guarantee with a 2% deposit, while the property must be your primary residence and you must be the single parent or guardian of at least one dependent child.
State-based grants have additional requirements that vary by location. Most require purchasing new properties and living in them for 6-12 months. Each state has different value thresholds and grant amounts.
How much deposit do I need if I'm buying an investment property instead of a home to live in?
Investment properties require significantly higher deposits than owner-occupier homes, with most lenders requiring 10-20% as a minimum.
The standard recommendation is 20% to avoid LMI and access the best interest rates. Investment property loans are considered higher risk by lenders, resulting in stricter lending criteria and higher rates compared to owner-occupier loans.
With a 10% deposit on an investment property, you'll pay LMI costs of approximately $10,000 to $15,000 on a $600,000 property. This insurance cost gets added to your loan, increasing your total borrowing amount and monthly repayments.
Many investors use equity from existing properties rather than cash savings, allowing them to purchase additional properties without depleting their savings accounts. This strategy requires sufficient equity in your current property and strong income to service multiple loans.
What additional costs, like stamp duty, legal fees, or inspection fees, should I save for on top of the deposit?
| Cost Type | Amount Range | Details |
|---|---|---|
| Stamp Duty | 3-8% of property value | Varies by state; $17,000-$23,000 for $500k property |
| Legal/Conveyancing Fees | $1,500-$3,000 | Property search, contract review, title transfer |
| Building & Pest Inspection | $400-$800 | Essential for identifying property issues |
| Loan Application Fees | $300-$1,000 | Lender establishment and processing costs |
| Mortgage Registration | $100-$300 | Government fee to register mortgage |
| Property Insurance | $1,000-$2,000 annually | Required by lenders before settlement |
| Moving Costs | $1,000-$3,000 | Removalists, utilities connection, address changes |
How much deposit would I need for a $500,000 property in Sydney compared to a $500,000 property in Brisbane?
The deposit requirements are identical regardless of location - it's the additional costs that vary significantly between Sydney and Brisbane.
For a $500,000 property in either city, you need $25,000 (5%) as a first-home buyer using government schemes, or $100,000 (20%) to avoid LMI traditionally. Investment buyers need $50,000-$100,000 (10-20%) in both cities.
The major difference lies in stamp duty: NSW charges approximately $17,000 in stamp duty for a $500,000 property, while Queensland charges around $8,750 - a difference of over $8,000. First-home buyers may receive exemptions or concessions in both states.
Total upfront costs including all fees typically range from $35,000-$45,000 in Sydney versus $25,000-$35,000 in Brisbane for the same property value. This makes Brisbane significantly more affordable for property entry despite similar deposit requirements.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How does my income and savings rate affect how quickly I can reach the deposit amount I need?
Your income directly impacts both your borrowing capacity and how quickly you can save for a deposit in Australia's current market conditions.
Recent analysis shows it takes the average Australian household 10.6 years to save a 20% deposit for the median home value. Higher income earners can dramatically reduce this timeframe through aggressive saving strategies and may qualify for larger loan amounts.
For example, saving $2,000 monthly allows you to reach a 5% deposit ($42,000) for Australia's median home in approximately 21 months. Saving $1,000 monthly extends this to 42 months. The key is consistent, automated savings combined with reducing existing debts to maximize your saving capacity.
Lenders typically allow borrowing 4-6 times your annual income, so higher incomes provide access to more expensive properties and potentially better loan terms. Your debt-to-income ratio must remain below 6-7 times for most lenders.
If I receive a financial gift from family, will the bank accept it as part of my deposit?
Australian banks generally accept genuine gifts from immediate family members as part of your deposit, provided proper documentation is completed.
Most lenders require at least 5% of the total deposit to be "genuine savings" - money you've saved and held in your account for at least 3 months. The remaining portion can be a non-refundable gift from parents, siblings, or grandparents.
You'll need a gift letter stating the money is a gift with no expectation of repayment, plus bank statements showing the gift transfer. Some lenders may require the gift giver to provide their own financial statements to verify the source of funds.
Gift money can cover stamp duty and other purchase costs in addition to the deposit, making it particularly valuable given Australia's high transaction costs. However, the gift cannot be borrowed money or require future repayment.
How does my credit history or existing debt change the size of the deposit a lender might ask for?
Your credit history and existing debt levels significantly impact both deposit requirements and loan approval chances in Australia.
Poor credit history or high existing debt may result in lenders requiring a larger deposit, potentially 25-30% instead of the standard 20%, to offset their perceived risk. Some lenders may decline applications entirely if credit issues are severe.
Strong credit scores (above 750) can sometimes allow lower deposits or reduced LMI premiums. Lenders view good credit as evidence of financial responsibility and may offer more favorable terms including lower interest rates.
Existing debts like car loans, credit cards, or personal loans reduce your borrowing capacity as lenders calculate your debt-to-income ratio. Paying down existing debts before applying can improve your loan terms and potentially reduce deposit requirements.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Australian property deposits have become more accessible through government schemes, but require careful financial planning.
While 20% deposits remain ideal for avoiding additional costs, first-home buyers can enter the market with as little as 2-5% through various government programs launched in 2025.
It's something we develop in our Australia property pack.
Sources
- Money.com.au - How Much Do You Need For A House Deposit In 2025
- Housing Australia - Home Guarantee Scheme Expansion
- Westpac - Home Deposit Requirements
- NAB - Saving for House Deposit
- DiJones - Investment Property Deposits 2025
- Stamp Duty Calculator Australia
- Your Mortgage - Latest House Prices Australia
- Finder - Average First Home Deposit Amount
-Stamp Duty in Australia: How Much Will You Pay?
-Fixed or Variable Mortgage: Which is Better in Australia?
-Are Apartments Better Investments Than Houses in Australia?
-Capital Gains Tax in Australia Explained
-Negative Gearing in Australia: Who Benefits?
-Land Tax in Australia: What Investors Should Know
-Are Short-Term Rentals Still Profitable in Australia?
-Co-buying a Home in Australia: Pros and Cons