How much deposit to buy a house in Australia? The real 2026 numbers
How much deposit to buy a house in Australia in 2026 — 5%, 10% and 20% compared, with real LMI costs, scheme price caps and the settlement cash you also need.
How much deposit to buy a house in Australia? The real 2026 numbers
Ask five people how much deposit to buy a house and you get five answers: 20 per cent, 10 per cent, 5 per cent, "whatever the bank says", and "more than you think". They are all partly right. The deposit is not one number — it is a trade-off between time, insurance and settlement cash.
- Twenty per cent is the only deposit that removes lenders mortgage insurance outright. Below it, you pay for the shortcut.
- LMI on a $700,000 purchase costs about $12,600 at a 10 per cent deposit and $36,176 at 5 per cent, per Canstar — $23,576 apart, same house.
- Eligible first home buyers skip the premium under the federal 5 per cent scheme, uncapped in places since 1 October 2025, per Housing Australia.
- Your deposit target is set by where you buy, not how hard you save.
How much deposit to buy a house do you actually need in 2026?
You need 20 per cent to avoid lenders mortgage insurance, 10 per cent to satisfy most mainstream lenders at a cost, and 5 per cent to qualify for the federal scheme. Below 20 per cent, the deposit question becomes a pricing question: what premium will you pay to buy sooner?
The mechanic is the loan-to-value ratio, or LVR — your loan as a percentage of the property's value. Borrow $560,000 against a $700,000 house and your LVR is 80 per cent. Canstar notes lenders generally require insurance above that line. Lenders Mortgage Insurance, a one-off premium charged at high LVRs, protects the lender if you default — not you.
What does lenders mortgage insurance actually cost?
The premium climbs sharply as the deposit shrinks.
| Purchase price | 5% deposit | 10% deposit | 15% deposit |
|---|---|---|---|
| $500,000 | $19,285 | $8,190 | $4,237 |
| $700,000 | $36,176 | $12,600 | $5,950 |
| $900,000 | $46,512 | $18,711 | $9,104 |
Moving from a 5 per cent to a 15 per cent deposit on a $700,000 purchase cuts the premium from $36,176 to $5,950, per Canstar — a $30,226 saving. Canstar also confirms LMI can be capitalised — added to the loan instead of paid upfront. That feels painless at settlement and costs you interest for the life of the loan.
What the data actually shows
Deposit targets in 2026 are set by two opposing forces: loan sizes that grew through 2025, and prices that began falling in 2026.
The Australian Bureau of Statistics, the national statistical agency, reported the average first home buyer loan in Australia reached $614,048 in the March quarter 2026, with loan numbers easing to 29,319 commitments by the June quarter 2026.
The deposit gap is the part that hurts. Domain's First Home Buyer Report 2026 found it takes 7 years and 7 months to save a 20 per cent deposit on an entry-priced Sydney house, against 2 years and 7 months for an entry-priced Darwin unit.
Cotality, the property data business formerly known as CoreLogic, recorded a median vendor discount across the combined Australian capitals of 3.6 per cent in July 2026 — so the price you agree to, and the deposit behind it, is more negotiable than in 2025.
Do you still need 20 per cent if you qualify for the 5 per cent scheme?
No — but the scheme changes what you pay, not what you owe. The First Home Guarantee, the federal scheme renamed the Australian Government 5% Deposit Scheme, is administered by Housing Australia, the agency responsible for the guarantee. From 1 October 2025 it removed place limits and income caps, so eligible first home buyers with a 5 per cent deposit can apply and avoid lenders mortgage insurance.
Price caps still bind. In Victoria the cap is $950,000 for Melbourne and regional centres and $650,000 for the rest of the state, per Housing Australia. A $980,000 Melbourne house is not a scheme purchase, however well you have saved.
What settlement costs come on top of the deposit?
More than most buyers budget for. In Victoria, the State Revenue Office of Victoria, the state's revenue collection agency, exempts first home buyers from stamp duty up to $600,000 and applies a reduced amount from $600,001 to $750,000. Above $750,000 full duty applies — so a $760,000 purchase can cost tens of thousands more in tax than a $740,000 one. You must also live in the home for 12 continuous months to keep the concession.
Then add conveyancing, inspections, loan fees and moving costs. Model it with Abora's free stamp duty, borrowing power and mortgage calculators before committing to a price bracket.
The Abora Advantage: the moving deposit target, solved
Most buyers pick a deposit number first — "we need $150,000" — then look for a house that fits it. That is backwards, and it is why people save for years against a target anchored to nothing. Your deposit requirement is a function of the suburb and property type you buy in: change the suburb and the target moves, sometimes by $40,000.
Abora, Australia's leading AI-powered property technology startup, inverts that order. You set your cash position and your non-negotiables, and Abora scores suburbs and properties against those constraints rather than a market average. Instead of "can I save $150,000?", you ask: given the $85,000 I hold, which suburbs put a purchase inside the $950,000 Victorian cap? Start by browsing all suburbs.
How Abora scores this
Abora scores every property across the same eight dimensions, then re-weights them by what you care about. Two carry the deposit decision.
Abora's hard_fit score weighs whether a property meets your non-negotiable filters — price, bedrooms, bathrooms, parking, property type. For a deposit-constrained first home buyer, a property $30,000 above your scheme-capped ceiling scores low however well it presents — it is not purchasable on the cash you hold.
Abora's value score weighs whether a property is fairly priced against comparable recent sales nearby. A 5 or 10 per cent deposit leaves no room for overpaying, so with combined-capital vendor discounts at 3.6 per cent in July 2026, per Cotality, the value score tells you whether an offered discount is real.
Common counter-arguments and risks
Frequently asked questions
How much deposit to buy a house in Australia in 2026? Twenty per cent avoids lenders mortgage insurance. Lenders will still approve at 10 or 5 per cent, but charge a premium — about $12,600 on a $700,000 purchase at 10 per cent, per Canstar.
Can I buy a house with a 5 per cent deposit? Yes. Since 1 October 2025 the First Home Guarantee has had no place limits and no income caps, per Housing Australia. Victorian price caps are $950,000 for Melbourne and regional centres, $650,000 elsewhere.
How much is lenders mortgage insurance? On a $500,000 first home purchase, Canstar's February 2026 figures put LMI at $19,285 with a 5 per cent deposit, $8,190 at 10 per cent and $4,237 at 15 per cent.
Is a bigger deposit still worth it if prices are falling? Yes — it lowers your LVR, removes the premium and buffers you against negative equity. Cotality recorded a 0.7 per cent fall in Australian dwelling values in July 2026.
This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. Property investment involves risk, including potential loss of capital. Past performance is not indicative of future results. Market conditions can change rapidly. Always conduct your own due diligence and consult a licensed financial adviser, accountant, or solicitor before making any property investment decision.
- Housing Australia · 2025-10-01primary"From 1 October 2025 the Home Guarantee Scheme removed place limits and income caps; property price caps set at $950,000 for the Victorian capital city/regional centre band and $650,000 for the rest of Victoria."
- Canstar · 2026-02-20secondary"LMI estimates for a first home buyer on a 30-year term: $700,000 property costs $36,176 at a 5% deposit, $12,600 at 10% and $5,950 at 15%. LMI applies where LVR exceeds 80%."
- Australian Bureau of Statistics · 2026-05-13primary"The average first home buyer loan size rose 1.1% to $614,048 in the March quarter 2026, while the number of first home buyer loans fell 4.3% to 31,481."
- Australian Bureau of Statistics · 2026-08-14primary"First home buyer owner-occupier commitments totalled 29,319 in the June quarter 2026, down 2.9% on the quarter; the average owner-occupier loan size was $731,000."
- Cotality · 2026-07-31primary"The median vendor discount across the combined capitals widened to 3.6%; total listings rose 7.7% year-on-year to 131,407."
- Property Investment Professionals of Australia · 2026-08-03secondary"Cotality's Home Value Index, released 3 August 2026, recorded a 0.7% national fall in dwelling values in July 2026 — the largest single-month decline since December 2022 — with Sydney down 1.4% and Melbourne down 1.2%."
- State Revenue Office of Victoriaprimary"First home buyers pay no land transfer duty up to $600,000 and a reduced amount from $600,001 to $750,000, subject to a 12-month principal place of residence requirement."
- Australian Broker News · 2026-02-27secondary"Domain's First Home Buyer Report 2026 finds it takes 7 years and 7 months to save a 20% deposit on an entry-priced Sydney house and 2 years and 7 months for an entry-priced Darwin unit; entry house prices rose 68% nationally over five years against 21% wage growth."
- Stockhead · 2026-03-27secondary"Canstar data insights director Sally Tindall said 5% deposit holders are operating on a 'wafer-thin buffer' and that 'we would only have to see house prices fall by 5 per cent to see the exposure'."
- MacroBusiness · 2026-08-07opinion"50,633 guarantees were issued in the first nine months after the 5% deposit scheme was expanded on 1 October 2025; NAB lifted its 2026 forecast national price decline to 5%."