How much do you need for a home deposit?

One of the first questions many buyers ask is how much they need for a home deposit. The answer varies depending on individual circumstances, goals, and lender requirements.

Typically, a 20% deposit of the property’s purchase price is considered the standard. For example, on a $700,000 home, that would mean $140,000. However, not everyone needs to reach that level to get started.

Some lenders accept smaller deposits — sometimes as low as 5%. Buyers choosing this option will usually need to cover lenders mortgage insurance (LMI), which is a one-off cost that protects the lender if repayments can’t be made. Depending on the loan size and deposit gap, this can add up to a significant amount.

There are also government initiatives designed to assist eligible buyers. For instance, the First Home Guarantee allows some to buy with as little as a 5% deposit without the added cost of LMI. Eligibility rules apply, but it can be a valuable option for those who meet the criteria.

It’s important to remember that the deposit isn’t the only expense. Buyers should also budget for stamp duty (unless exempt), legal fees, building and pest inspections, and moving costs. Having extra funds beyond the deposit helps avoid financial strain.

While a 20% deposit is often seen as ideal, it’s not the only path to homeownership. With careful planning and professional guidance, buyers can enter the market with a smaller deposit and still maintain financial strength.

If you’re wondering how much you’ll need and want to explore your options, contact Mortgage Suite Baldivis for personalised advice and support tailored to your situation.