How Much Deposit Do I Need for a Home Loan in Australia?

One of the most common questions home buyers ask is: “How much deposit do I need for a home loan?”

The answer depends on your circumstances, the type of property you’re buying, and your lender’s requirements. As a leading mortgage broker, Brampton Finance helps clients navigate deposit rules every day—so let’s break it down clearly.

✅ Standard Deposit Requirements for home loans

• 20% Deposit (Ideal):Most lenders prefer buyers to contribute 20% of the property’s purchase price. This avoids Lenders Mortgage Insurance (LMI) and usually unlocks the most competitive rates.

• 5% – 10% Deposit (Minimum with LMI):Some lenders will approve loans with deposits as low as 5%, but this usually requires you to pay LMI, which protects the bank, not you.

• Low Deposit Schemes (Government Support):

  • First Home Guarantee (FHG): Eligible first-home buyers can purchase with as little as 5% deposit without LMI.

  • Regional First Home Buyer Guarantee (RFHBG): Similar benefits for regional buyers.

  • Family Home Guarantee: Allows eligible single parents to buy with just 2% deposit.

🏦 How Your Deposit Impacts Borrowing

The bigger your deposit:

• The lower your loan-to-value ratio (LVR).

• The less risk for the lender.

• The better your negotiating power for interest rates.

⚖️ Deposit vs Borrowing Power

It’s important to note that deposit size isn’t the only factor—your income, expenses, and credit history also affect how much you can borrow. For example:

• A buyer with a 10% deposit but strong income may secure approval more easily than a buyer with 20% deposit but unstable employment.

🔎 Example Deposits by Property Value

• $600,000 property →

  • 20% deposit = $120,000

  • 10% deposit = $60,000 (+ LMI)

  • 5% deposit = $30,000 (+ higher LMI)

  • 
    

• $1,000,000 property →

  • 20% deposit = $200,000

  • 10% deposit = $100,000 (+ LMI)

• 
  

❓ FAQs About Deposits

Q: Can I buy with no deposit? Generally, no. Some lenders may allow guarantor loans, where equity in a parent’s property is used instead of cash.

Q: Does LMI count towards my deposit? No. LMI is an added cost, usually capitalised into your loan.

Q: Can savings from the bank of mum and dad count? Yes, but lenders often want to see at least some “genuine savings”—money you’ve saved over time.

👩‍💼 Why Speak to a Mortgage Broker?

At Brampton Finance, we:

• Compare deposit requirements across banks and lenders.

• Help you access government schemes that reduce your upfront savings need.

• Structure your loan so you borrow smarter, not harder.

Final Word

There’s no one-size-fits-all answer to “How much deposit do I need for a home loan?”For some, it may be just 5% with government support, while for others, aiming for 20% is the smartest move.

💡 The key is getting tailored advice early. Speak with Brampton Finance today to find out how much deposit you really need for your home loan.

📞 Contact us: 02 9389 1077 info@bramptonfinance.com.au