Last updated: April 2026
How Much Deposit Do I Need for a First Home in Australia?
The short answer: anywhere from 2% to 20% of the property price, depending on which government schemes you use. A 20% deposit on a $650,000 home is $130,000, but first home buyers in 2026 can purchase with as little as $13,000 (2%) through Help to Buy or $32,500 (5%) through the First Home Guarantee. Here is how each option works and what you actually need to save.
The Standard 20% Deposit
Lenders traditionally expect a 20% deposit because it reduces their risk. If you borrow more than 80% of the property value (a loan-to-value ratio above 80%), most lenders will charge Lenders Mortgage Insurance (LMI) to protect themselves. Saving 20% means you avoid LMI entirely and often qualify for better interest rates.
Here is what 20% looks like at common property prices:
| Property Price | 20% Deposit |
|---|---|
| $500,000 | $100,000 |
| $600,000 | $120,000 |
| $700,000 | $140,000 |
| $800,000 | $160,000 |
For many first home buyers, saving six figures takes years. That is exactly why the government created schemes to lower the barrier.
Buying with 5% Deposit (First Home Guarantee)
The First Home Guarantee (FHBG) is the most popular way to buy with a smaller deposit. You save a 5% deposit, and the government guarantees up to 15% of the property value, bringing your effective security to 20% in the lender's eyes. That means no LMI.
Since October 2025, there are no income caps and no annual places limits. You own 100% of the property and keep all future capital gains. The government has no ownership stake. You apply through a participating lender (over 30 lenders are on the panel).
On a $650,000 property, a 5% deposit is just $32,500, compared to $130,000 at 20%. That is nearly $100,000 less you need to save.
Buying with 2% Deposit (Help to Buy)
Help to Buy is a shared equity scheme where the government contributes up to 40% equity on a new home (30% on an existing home). You need only a 2% deposit, and your mortgage covers the remaining portion. The government co-owns a share of your property and receives a proportional share of any future capital gains or losses.
Key eligibility requirements: income capped at $100,000 for singles or $160,000 for couples, Australian citizens only, available in all states and territories except Tasmania, and currently only available through CBA or Bank Australia.
On a $500,000 property, a 2% deposit is just $10,000. If you are under the income cap and comfortable with shared equity, this is the lowest deposit path available.
How Much Deposit You Actually Need
This table shows the deposit required at different property prices under each option:
| Property Price | 2% (Help to Buy) | 5% (FHBG) | 10% | 20% |
|---|---|---|---|---|
| $500,000 | $10,000 | $25,000 | $50,000 | $100,000 |
| $600,000 | $12,000 | $30,000 | $60,000 | $120,000 |
| $700,000 | $14,000 | $35,000 | $70,000 | $140,000 |
| $800,000 | $16,000 | $40,000 | $80,000 | $160,000 |
| $900,000 | $18,000 | $45,000 | $90,000 | $180,000 |
Remember that these figures are just the deposit. You will also need money for additional purchase costs such as stamp duty, conveyancing, and inspections.
Using FHSS to Build Your Deposit Faster
The First Home Super Saver Scheme (FHSS) lets you salary sacrifice up to $15,000 per year (up to $50,000 total) into your super fund. These contributions are taxed at just 15% instead of your marginal tax rate. When you are ready to buy, you can release the funds to use towards your deposit.
The tax advantage is significant. If you earn $90,000, your marginal rate is 30% (plus the 2% Medicare levy). Salary sacrificing means you pay 15% tax on those contributions instead of 32%, saving you roughly 17 cents per dollar contributed. Over three years of maximum contributions ($45,000 total), that is a meaningful saving on tax alone, on top of building your deposit.
The FHSS stacks with both the FHBG and Help to Buy, so you can use it to build the 2% or 5% deposit you need under those schemes.
Do Not Forget the Extra Costs
Your deposit is not the only upfront cost. Budget for these additional expenses:
- Stamp duty (varies by state, but FHB concessions can reduce this to $0)
- Conveyancing and legal fees ($1,500 to $3,000)
- Building and pest inspections ($500 to $1,000)
- Loan application fees ($0 to $600)
- LMI if not using FHBG ($0 to $20,000+, depending on LVR and property price)
First home buyers in most states qualify for stamp duty exemptions or concessions that can save thousands of dollars. Check your full breakdown of hidden costs to make sure you are prepared.
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Frequently Asked Questions
Can I buy a house with no deposit in Australia?
Not through a government scheme, but a family guarantee (also called a guarantor loan) can allow you to borrow with no personal deposit. A family member uses equity in their property as security. Some lenders also accept gifted deposits, though you will typically still need genuine savings of at least 5%.
Is a 5% deposit enough to buy a house in Australia?
Yes. Under the First Home Guarantee (FHBG), first home buyers can purchase with just a 5% deposit. The government guarantees 15% of the property value, so you avoid Lenders Mortgage Insurance. Since October 2025, there is no income cap and places are unlimited.
How long does it take to save a 20% deposit?
On a $650,000 property, a 20% deposit is $130,000. If you save $2,000 per month, that takes about 5.5 years. Using the FHSS to salary sacrifice into super can speed this up thanks to tax advantages, and government schemes like the FHBG or Help to Buy can reduce the deposit you actually need to as low as 2-5%.
Does my deposit need to be genuine savings?
Most lenders require at least part of your deposit to be genuine savings, meaning money you have accumulated over time (typically 3-6 months). Gifts from family, FHSS releases, and government grants can usually count toward the rest. Each lender has different policies, so check with your broker.
Sources:
Housing Australia - First Home Guarantee | Housing Australia - Help to Buy | ATO - First Home Super Saver Scheme
Disclaimer: This information is general in nature and does not constitute financial, legal, or tax advice. Calculations are estimates only and may not reflect your exact circumstances. Eligibility criteria and dollar amounts may change without notice. Always verify with the relevant government authority, your mortgage broker, or a licensed financial adviser before making decisions.