How much deposit do I really need to buy my first home in Australia?

You can buy your first home with a deposit as low as 5% of the purchase price. That’s the short answer, but the full picture includes government schemes that can help you avoid Lenders Mortgage Insurance (LMI), options to pool savings through super, and state-based stamp duty concessions that trim your upfront costs. Here’s how it all fits together.

What deposit do you actually need?

Moneysmart suggests a 20% deposit as a solid savings goal. Hitting 20% means you sidestep LMI – an insurance that protects the lender, not you – and you’ll usually get a sharper interest rate. But if saving 20% would push your purchase date years down the track, you have other pathways.

The Australian Government 5% Deposit Scheme (formerly the Home Guarantee Scheme) lets eligible first-home buyers purchase with a minimum 5% deposit and no LMI. It’s not a grant – the government acts as a guarantor on the portion above 80% of the property’s value, so you don’t pay the insurance premium.

Key scheme features, as published by Housing Australia:

Minimum 5% deposit for first-home buyers (2% for single parents).
No income caps.
No Lenders Mortgage Insurance.
Available for houses, townhouses, or units – new or existing.
Unlimited places and no waiting list.

First Home Super Saver Scheme (FHSS)

You can also accelerate your deposit savings through super. The FHSS lets you make voluntary contributions to your super fund and later withdraw them, along with associated earnings, to buy or build your first home. Current rules allow you to save up to $50,000 (plus earnings) under this scheme.

Why it helps: contributions are taxed at the concessional super rate of 15% instead of your marginal rate, so your savings can grow faster. You can use the FHSS alongside the 5% Deposit Scheme and stamp duty concessions.

Stamp duty – don’t forget this cost

Stamp duty is a state government tax on property transfers, usually payable within 30 days of settlement. As a first-home buyer, you may be exempt or entitled to a concession. Each state and territory sets its own thresholds and concessions, so you’ll need to check the rules where you’re buying. Moneysmart links to official calculators for every jurisdiction, making it straightforward to estimate your liability.

Practical steps to get started

Set a realistic savings target. Use a 20% deposit as a benchmark if it’s achievable, but know that 5% can get you in the door through the government scheme.
Check scheme eligibility. No income caps apply to the 5% Deposit Scheme, but property price caps do – verify your chosen property falls within the limit for your location.
Build your deposit faster. Even if you don’t use FHSS, a dedicated high-interest savings account and a clear budget help. Moneysmart’s ‘save for a house deposit’ guide is a good starting point.
Get pre-approval. Pre-approval gives you a clear price range and shows sellers you’re serious. Lenders typically ask for evidence of income, expenses, and your deposit savings.
Review the contract of sale. Whether buying at auction or private treaty, have a solicitor or conveyancer check the terms before you sign.
Factor in buying costs. On top of the deposit, you’ll need to cover conveyancing, building and pest inspections, and possibly mortgage registration fees. Stamp duty concessions can reduce this burden.

How Arrivau can help

Arrivau is a licensed Australian mortgage broker. We explain lending options in plain English so you can understand what’s available before you commit. We don’t lend money, and we can’t guarantee approval or a particular rate. What we do is provide credit assistance – we help you compare loans, navigate scheme requirements, and work out how much you can realistically borrow based on your situation.

If you’re ready to explore your options, the next step is to talk through your goals. We’ll help you map out which schemes you’re eligible for, what deposit you’ll need, and how to present a strong application to lenders.

This article is general information only and does not take into account your personal objectives, financial situation or needs. Arrivau Pty Ltd holds an Australian Credit Licence and provides credit assistance as a mortgage broker. We are not a lender and do not promise loan approval, specific interest rates, savings, or any financial outcomes. You should consider whether any information is appropriate for you before acting on it.