Quick answer
The minimum deposit to buy a house in Australia is 5% of the property value - but a 20% deposit is ideal to avoid Lenders Mortgage Insurance (LMI). On a $1M home, that's $50,000 minimum or $200,000 ideal, plus stamp duty and legal fees.
Minimum vs ideal deposit: what's the difference?
Australian lenders assess your deposit as a percentage of the property's value - this is called your Loan-to-Value Ratio (LVR). The lower your LVR, the less risk to the lender, and the better the terms you'll usually receive.
Minimum
5%
Minimum deposit
- LMI applies - $10,000-$30,000 extra
- Stricter income/expense scrutiny
- Higher interest rates (higher LVR)
- Government guarantees can waive LMI
Recommended
20%
Ideal deposit
- No LMI - save $10,000-$30,000
- Lower interest rates available
- Instant equity in your home
- Stronger negotiating position
What is the minimum deposit for a home loan in Australia? (2026)
The minimum deposit for a home loan in Australia in 2026 is 5% of the property's purchase price. This has been the standard floor for most lenders for several years. However, the rules around that 5% matter:
- The 5% must typically be in genuine savings (held for 3+ months)
- Lenders Mortgage Insurance (LMI) will apply on deposits below 20%
- Some lenders require 10% for certain property types (apartments, regional areas)
- Home loan deposit requirements may vary between ADI and non-ADI lenders
First home buyers: The First Home Guarantee allows eligible buyers to purchase with a 5% deposit and zero LMI. The government guarantees the remaining 15%, removing the insurance cost entirely. See government schemes below.
Many buyers save their 5% deposit and feel ready - then discover they don't have enough for stamp duty. This is a state government tax on property purchases. It cannot be added to your loan; you must pay it upfront in cash.
The table below shows the total cash required on a $1,000,000 property by city, including a 5% deposit:
Note: These figures are estimates. First Home Buyers may be eligible for Stamp Duty exemptions or concessions depending on the state and purchase price.
What counts as genuine savings?
Having the money in your account isn't enough. Lenders want to verify how you saved it. Most banks require proof of genuine savings - funds that demonstrate your ability to save consistently, not a windfall.
Genuine savings typically means funds held in your account for at least 3 months, or regular saving contributions over that period.
✗ Does NOT count as genuine savings
- Cash gift deposited recently
- Personal loan from a friend/family
- Tax refund (unless held 3 months)
- Car/asset sale proceeds (under 3 months)
- Inheritance received recently
- HECS/HELP repayment
✓ Does count as genuine savings
- Bank savings held for 3+ months
- Term deposits (3+ months)
- Regular share investments
- FHSS super contributions
- Equity in an existing property
- Rental history (some lenders)
Bank of Mum and Dad: If your parents are gifting you money, you'll need a Statutory Declaration confirming it's a gift, not a loan. Some lenders still count a gifted deposit if it's been in your account for 3 months.
Can I Buy with No Deposit? (0% Options)
100% home loans (no deposit) are rare in Australia in 2026. The main exception is the guarantor loan.
If a family member (usually parents) owns property in Australia with sufficient equity, they can act as guarantor. Their property is used as additional security for your loan.
- Benefit: You can borrow up to 100% of the purchase price plus costs
- Benefit: You pay $0 LMI even with no deposit
- Risk: If you default, your guarantor's property is at risk
- Exit strategy: Once you've built 20% equity, the guarantor is typically released
Read more about zero deposit home loans in Australia.
Ready to calculate your numbers?
Knowing your deposit amount is the first step. The next step is finding out how much the banks will actually lend you.
Frequently Asked Questions (FAQ)
In Australia, the minimum deposit to buy a house is 5% of the property value. However, deposits below 20% typically require Lenders Mortgage Insurance (LMI), which costs $10,000-$30,000. A 20% deposit avoids LMI and usually unlocks better interest rates. For a $1M property: 5% deposit = $50,000 plus stamp duty and fees.
