Preparing financially
How much deposit do you need to buy a home?
20% plus buying costs is a useful target, but smaller deposits are commonly accepted. How deposit size determines your LVR, when LMI may apply, and how a contract deposit differs from your home-loan deposit.
- 20% of the price plus buying costs is a useful target — it generally avoids LMI — but smaller deposits are commonly accepted.
- LVR is the loan divided by the lender's valuation (not necessarily the price you agreed); above roughly 80% LVR, LMI is commonly required.
- Your home-loan deposit and the contract deposit you pay at exchange are different things, with different rules — don't assume a fixed Australia-wide percentage.
- Your available cash needs to cover buying costs and a post-settlement buffer too, not just the deposit.
How much deposit do you need?
20% of the purchase price, plus enough to cover buying costs, is a useful savings target — it generally produces an 80% Loan-to-Value Ratio (LVR) and avoids Lenders Mortgage Insurance (LMI). Smaller deposits are commonly accepted, but usually mean a larger loan and may require LMI (ASIC (Moneysmart), verified 7 Aug 2026). Eligible buyers may also be able to use a government deposit scheme to buy with a smaller deposit without LMI — see the government support guide for eligibility. The figures below cover the purchase-price contribution only, not the separate buying costs on top.
What LVR means, and how a smaller deposit changes it
LVR is the loan amount divided by the property's value, expressed as a percentage — a $720,000 loan on an $800,000 valuation is a 90% LVR. The lender's own valuation is what's used here, and it can differ from the price you agreed to pay; see why a bank's valuation can differ from your purchase price for what happens if it comes in lower. Above roughly 80% LVR, LMI is commonly required (ASIC (Moneysmart), verified 7 Aug 2026) — treat this as likely, not an absolute rule, since exact thresholds and pricing vary by lender. See Lenders Mortgage Insurance explained for what LMI actually covers, how it's paid, and alternatives.
| Deposit | Deposit amount | Loan amount | LVR | LMI likely? |
|---|---|---|---|---|
| 5% | $35,000 | $665,000 | 95% | Yes — or a government deposit scheme may apply instead |
| 10% | $70,000 | $630,000 | 90% | Commonly, yes |
| 20% | $140,000 | $560,000 | 80% | Not usually required |
Illustrative figures on a $700,000 property. Deposit amount only — see the buying-costs guide for duty, registration and other costs on top of this.
Two different things share the word "deposit"
Your home-loan deposit is the equity you contribute toward the loan — the table above. Your contract deposit is a separate, earlier payment to the agent or vendor when you sign a contract of sale or win at auction; it's a part-payment of the purchase price, not an extra cost, and the contract controls the amount and timing. Don't assume 5-10% is a fixed Australia-wide rule — in Victoria, there's no statutory deposit amount; 10% is the usual convention, but the amount and terms are negotiable between buyer and vendor, and auction deposits are generally payable immediately while private-sale contracts specify their own timing. See the offer and auction guide for the Victorian contract-deposit detail.
Cooling-off periods by state
If you exercise a cooling-off right, you typically forfeit a small part of the contract deposit — the period itself varies significantly by state, and two states have none at all.
| State/territory | Cooling-off period |
|---|---|
| Western Australia | No automatic statutory right (Consumer Protection WA (Dept of Local Government, Industry Regulation and Safety), verified 7 Aug 2026) |
| Tasmania | No automatic statutory right (Consumer, Building and Occupational Services (CBOS), Tasmania, verified 7 Aug 2026) |
| South Australia | 2 clear business days (Attorney-General's Department, South Australia, verified 7 Aug 2026) |
| Victoria | 3 business days (private sale only — none at auction) (Consumer Affairs Victoria, verified 30 Jul 2026) |
| Northern Territory | 4 business days (Northern Territory Government, verified 7 Aug 2026) |
| New South Wales | 5 business days (NSW Government, verified 7 Aug 2026) |
| Queensland | 5 business days (Queensland Government, verified 7 Aug 2026) |
| ACT | 5 business days (ACT Parliamentary Counsel's Office, verified 7 Aug 2026) |
Don't treat all your cash as the deposit
Your available savings can't automatically all go toward the deposit — you also need buying costs (duty, registration, conveyancing, inspections) and a post-settlement buffer for moving and early ownership expenses. See the buying-costs guide for the complete cash requirement and the safe-budget framework for how much you can safely commit overall.
Practical checklist
Before finalising your deposit strategy
- Work out your target deposit at 20% of your likely price range, then compare it with what you can realistically save
- Ask your lender or broker for an LMI estimate at your expected LVR
- Check whether a government deposit scheme could reduce or remove the need for LMI
- Budget buying costs and a post-settlement buffer separately from the deposit itself
Questions for a professional
- At my likely deposit size, would I need LMI, and roughly how much?
- How does your bank's valuation process work, and what happens if it comes in below the price?
- What counts as 'genuine savings' with the lenders you compare?
Official resources
Sources and methodology
- Save for a house deposit — ASIC (Moneysmart) (retrieved 29 Jul 2026)
- Buying property by private sale — Consumer Affairs Victoria (retrieved 30 Jul 2026)
- Contracts and deposits when buying property in NSW | NSW Government — NSW Government (retrieved 7 Aug 2026)
- Cooling-off period | Queensland Government — Queensland Government (retrieved 7 Aug 2026)
- Civil Law (Sale of Residential Property) Act 2003 | ACT Legislation Register — ACT Parliamentary Counsel's Office (retrieved 7 Aug 2026)
- Contract of sale | NT.GOV.AU — Northern Territory Government (retrieved 7 Aug 2026)
- Offers, auctions and buying off the plan | SA.GOV.AU — Attorney-General's Department, South Australia (retrieved 7 Aug 2026)
- Home buyers glossary | Consumer Protection, Western Australia — Consumer Protection WA (Dept of Local Government, Industry Regulation and Safety) (retrieved 7 Aug 2026)
- Advice when buying or selling property | Consumer, Building and Occupational Services Tasmania — Consumer, Building and Occupational Services (CBOS), Tasmania (retrieved 7 Aug 2026)
Figures on this page are drawn from Delora's local knowledge graph, refreshed from these primary sources and checked for changes on a regular schedule. If a figure here looks out of date, the official source above is always the authority — please let us know.