How Much Deposit Do I Need to Buy a House in Australia 2026

Home loans · 23 July 2026 · Use the borrowing power calculator →

The deposit is the biggest hurdle for most Australian home buyers. At 20% of the purchase price, a typical first home in Sydney demands more than $250,000 in cash — a figure that takes the average household over a decade to accumulate. Yet a 20% deposit is not mandatory, and in the 2026–27 financial year, multiple government schemes and lender products enable purchases with as little as 5% down.

If you are asking “how much deposit to buy a house Australia 2026,” this guide covers everything: the 20% target and why it matters, the cost of buying with a smaller deposit (including LMI), the Home Guarantee Scheme and how it eliminates LMI at 5%, genuine savings requirements, stamp duty as an additional upfront cost, and real deposit amounts for median-priced properties across Australia’s major cities.

The 20% Deposit Rule — and Why It Matters

The 20% deposit is not a legal requirement. It is simply the threshold above which lenders do not require Lenders Mortgage Insurance (LMI). LMI is a one-off insurance premium that protects the lender (not you) if you default and the property sells for less than the outstanding loan. By putting down 20% of the property value, you reduce the lender’s risk to the point where LMI is not required.

The benefits of a 20% deposit go beyond avoiding LMI:

Lower interest rate. Borrowers with an LVR of 80% or below typically receive the best advertised rates. LVRs above 80% often attract a rate premium of 0.10%–0.40%, and loans above 90% LVR can see an additional premium of 0.10%–0.30%. These small percentage differences compound meaningfully on large loan amounts over 30 years.

Lower monthly repayments. A larger deposit means a smaller loan, which means lower repayments. On a $700,000 property, a 20% deposit ($140,000) results in a $560,000 loan, with monthly repayments at 6.00% of approximately $3,358. A 10% deposit ($70,000) results in a $630,000 loan with monthly repayments of approximately $3,778 — a $420 difference per month, every month, plus LMI costs on top.

Instant equity buffer. A 20% deposit gives you a cushion if property prices fall. With a 5% deposit, even a small market correction can put you into negative equity (where you owe more than the property is worth), which limits your ability to refinance or sell without a loss.

Better refinancing options. When you want to refinance for a better rate, having at least 20% equity makes you a more attractive borrower to new lenders and avoids a second round of LMI on the refinanced loan.

Real Deposit Amounts: Median Property Prices by City

Here is what a 20% deposit and a 5% deposit look like for median-priced houses and units in Australia’s major cities, using CoreLogic data from mid-2026:

Sydney

Median house price: Approximately $1,470,000. A 20% deposit is $294,000. A 5% deposit is $73,500.
Median unit price: Approximately $860,000. A 20% deposit is $172,000. A 5% deposit is $43,000.

Sydney’s deposit requirements are comfortably the highest in Australia. A 20% house deposit exceeds the entire median house price in several other capital cities. First home buyers in Sydney overwhelmingly target units or look to outer suburbs and regional NSW.

Melbourne

Median house price: Approximately $940,000. A 20% deposit is $188,000. A 5% deposit is $47,000.
Median unit price: Approximately $615,000. A 20% deposit is $123,000. A 5% deposit is $30,750.

Melbourne’s unit market offers a more accessible entry point, with a 5% deposit on a median unit below $31,000. House buyers face the second-highest deposit hurdle in the country after Sydney.

Brisbane

Median house price: Approximately $885,000. A 20% deposit is $177,000. A 5% deposit is $44,250.
Median unit price: Approximately $575,000. A 20% deposit is $115,000. A 5% deposit is $28,750.

Brisbane prices have risen sharply since the pandemic, closing the gap with Melbourne. The unit market remains more affordable and is the natural first home buyer entry point.

Perth

Median house price: Approximately $785,000. A 20% deposit is $157,000. A 5% deposit is $39,250.
Median unit price: Approximately $475,000. A 20% deposit is $95,000. A 5% deposit is $23,750.

Perth remains the most affordable mainland capital for houses, though price growth in 2024–26 has eroded some of the advantage over Adelaide.

Adelaide

Median house price: Approximately $800,000. A 20% deposit is $160,000. A 5% deposit is $40,000.

Adelaide has seen some of the strongest growth of any capital city since 2020, and the median house price now sits above Perth.

Hobart, Darwin, and Canberra

Hobart median house: Approximately $700,000. 20% deposit: $140,000.
Darwin median house: Approximately $600,000. 20% deposit: $120,000.
Canberra median house: Approximately $980,000. 20% deposit: $196,000.

Buying With a 5%–10% Deposit: LMI Costs

If you have less than 20%, you pay Lenders Mortgage Insurance. LMI premiums are calculated based on the loan amount and LVR. Here are approximate LMI costs for a $600,000 property at different LVR levels as of 2026:

95% LVR (5% deposit): Loan amount $570,000. LMI premium approximately $22,000–$28,000 (capitalised into the loan or paid upfront). The effective LVR including capitalised LMI can push above 98%.
90% LVR (10% deposit): Loan amount $540,000. LMI premium approximately $10,000–$14,000.
85% LVR (15% deposit): Loan amount $510,000. LMI premium approximately $5,000–$7,000.
80% LVR (20% deposit): No LMI applies.

LMI premiums are not tax-deductible for owner-occupiers. For investors, LMI on an investment property loan may be deductible over 5 years or the loan term (check with a tax professional). For more detail, read our full guide on LMI lenders mortgage insurance explained 2026.

The Home Guarantee Scheme: 5% Deposit, No LMI

The Home Guarantee Scheme, administered by Housing Australia, is the government’s flagship program to help first home buyers enter the market with a small deposit without paying LMI. Here is how it works in 2026:

The government guarantees up to 15% of the property value, so the lender effectively sees your loan as having an 80% LVR — the guarantee fills the gap between your 5% deposit and the 20% threshold at which LMI would no longer apply.
There are 35,000 places available per financial year across three streams: First Home Guarantee (for first home buyers), Regional First Home Buyer Guarantee (for regional properties), and Family Home Guarantee (for single parents with dependants).
Property price caps apply and vary by state and region. In Sydney and major NSW regional centres, the cap is $900,000 for houses. In Melbourne, it is $800,000. In Brisbane, $700,000. In Perth and Adelaide, $600,000. These caps mean the scheme is only available for properties at or below these thresholds — it cannot be used for high-end properties.
Income caps apply: singles must earn $125,000 or less in the previous financial year; couples must earn $200,000 or less combined.
You must be an Australian citizen or permanent resident (not a temporary visa holder) and must intend to live in the property as your principal place of residence.
The property must be a residential property — it cannot be a purely investment purchase, though you can rent out rooms.

For first home buyers who qualify, the Home Guarantee Scheme is the most effective way to buy with a small deposit while avoiding LMI. Combined with state-based First Home Owner Grants and stamp duty concessions, the total upfront cost can be significantly reduced. Our first home buyer guide Australia 2026 covers all grants, schemes, and steps in detail.

Genuine Savings: What Lenders Require

Most lenders require you to demonstrate at least 5% of the purchase price in genuine savings — funds you have accumulated yourself over time. This rule exists to prove you can manage money and handle the discipline of a mortgage.

Genuine savings include: funds held in a savings account or term deposit for at least 3 months, shares managed for at least 3 months, equity in an existing property, and funds from the First Home Super Saver Scheme. Gifts from parents may count if held for at least 3 months, though some lenders treat them differently. Inheritances, tax refunds, and bonuses generally count. Rent payments do not count, though some non-bank lenders offer “rent as savings” products where a history of on-time rent payments substitutes for savings.

Non-genuine savings include: funds from a personal loan or credit card, gifts received less than 3 months before application (lender-dependent), money held in a business account rather than a personal account, and casino or gambling winnings (seriously — lenders treat this as non-genuine).

The genuine savings rule is one reason why even borrowers with a 20% deposit gifted from parents may still face scrutiny; the lender wants to see that you personally have a savings track record, not just that you have cash.

Stamp Duty: The Often-Forgotten Upfront Cost

Stamp duty (transfer duty) is paid on top of your deposit and is a significant upfront cost that first-time buyers often underestimate. It is a state government tax calculated on the property’s purchase price, and rates vary widely by state. Here are approximate stamp duty costs on the median-priced property in each city for an owner-occupier in the 2026–27 financial year:

Sydney ($1,470,000 house): Approximately $64,000 in stamp duty (NSW). First home buyers receive a full exemption up to $800,000 and a concessional rate up to $1,000,000 — which means first home buyers buying above $1,000,000 pay full duty.
Melbourne ($940,000 house): Approximately $51,000 in stamp duty (VIC). First home buyers receive an exemption up to $600,000 and a concession between $600,000 and $750,000. Above $750,000, full duty applies.
Brisbane ($885,000 house): Approximately $28,000 in stamp duty (QLD). Eligible first home buyers pay no duty up to $700,000, with the additional first-home concession phasing out below $800,000; the ordinary home concession may still apply above that level.
Perth ($785,000 house): Approximately $33,000 in standard duty (WA). For eligible transactions entered into from 7 May 2026, WA’s housing package provides no duty up to $600,000 and a concessional rate through $800,000; confirm the assessment and implementation status with RevenueWA.
Adelaide ($800,000 house): Approximately $37,000 in stamp duty (SA). First home buyers may be eligible for the First Home Owner Grant but SA has limited stamp duty concessions for established homes.

Stamp duty is payable at or before settlement and must come from your savings — it cannot be borrowed as part of the home loan (except in rare cases with a guarantor loan or by capitalising it through a specific product). If your deposit is $70,000 and stamp duty is $30,000, you need $100,000 in total cash. Use our stamp duty calculator to work out your exact state-by-state costs.

For a full breakdown of how these upfront costs fit into the overall home buying journey, read our first home buyer guide and our guide to how much you can borrow in Australia 2026 to ensure your borrowing power and deposit line up.

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Disclaimer

Disclaimer: This article provides general estimates only and does not constitute financial, tax, or legal advice. Rates, thresholds, and rules change. Always refer to the ATO, your state revenue office, or a licensed professional for your specific circumstances. Last updated: July 2026.

Frequently asked questions

Can I use a gifted deposit from my parents to buy a house?

Yes, most lenders accept gifted deposits, but they require a statutory declaration or gift letter from the giver stating the money is a genuine gift with no expectation of repayment. The gift cannot be a loan in disguise — if the parents expect repayment, that debt must be disclosed and counted against your borrowing capacity. Some lenders also want to see the gift in your account for at least 3 months before settlement to satisfy genuine savings requirements, though rules vary. For the Home Guarantee Scheme, gifted deposits from parents are generally acceptable for the 5% deposit, but check the specific scheme rules.

Can I use my superannuation for a house deposit through the FHSSS?

Yes. The First Home Super Saver Scheme (FHSSS) allows you to withdraw up to $50,000 of voluntary super contributions (plus associated earnings) per person for a first home purchase. Couples can access up to $100,000 combined. Voluntary contributions include both salary sacrifice and personal deductible contributions you have claimed a tax deduction for. The key rules: you must be a first home buyer, you must live in the property for at least 6 of the first 12 months, and you apply to the ATO for a determination and release before signing a contract. Voluntary contributions made from 1 July 2017 onwards are eligible. The tax benefit is significant — contributions are taxed at 15% inside super instead of your marginal rate (up to 47%), and withdrawn amounts receive a 30% tax offset, making the effective tax on withdrawals very low. Read our first home buyer guide for more on combining FHSSS with other grants and schemes.

What is a guarantor home loan and how does it help with a deposit?

A guarantor home loan (also called a family guarantee) allows a family member — typically a parent — to use the equity in their own property as additional security for your loan. This covers the deposit shortfall so you can borrow up to 100% (or even 105% to cover stamp duty) of the property value without paying LMI. The guarantor typically guarantees only the shortfall — say 20% of the purchase price — rather than the whole loan. Once you have built enough equity in your property (usually when your loan drops below 80% LVR), the guarantor can be released. This is one of the most common ways first home buyers avoid both LMI and the need for a large cash deposit. Read our full guarantor home loan guide for requirements and risks.

Should I wait and save a bigger deposit or buy now with a smaller deposit?

This is the classic 'rent vs buy' trade-off. With a smaller deposit (5%–10%), you pay LMI and possibly a higher interest rate, but you stop paying rent and start building equity. In a rising market, waiting to save a 20% deposit can mean prices grow faster than your savings rate, making the goal recede. Between 2019 and 2025, median house prices in Sydney rose from approximately $950,000 to over $1,450,000 — a gain of $500,000. A 20% deposit on the 2019 price was $190,000. By 2025, that same property required a $290,000 deposit. If you had bought in 2019 with a 10% deposit and paid LMI, your LMI cost of approximately $15,000–$20,000 would have been dwarfed by the $500,000 capital gain. The counter-argument: buying with a small deposit leaves you highly leveraged and vulnerable if property prices fall or interest rates rise. There is no universal right answer — it depends on your city's price trajectory, your income stability, and your personal risk tolerance.

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Disclaimer: This article provides general information only and does not constitute financial, tax, or legal advice. Figures and thresholds referenced are 2026 estimates and may vary by individual circumstances. Always verify details with a licensed financial adviser, tax professional, or your state revenue office before making a purchase or investment decision.