Buying your first home in Australia: the complete guide

How much deposit you actually need

The traditional benchmark is 20% of the purchase price plus costs, because at 20% you avoid Lenders Mortgage Insurance entirely. In practice most first home buyers now buy with far less.

With the First Home Guarantee you can buy with a 5% deposit and no LMI, because the government guarantees the gap. Outside the scheme, a 5–10% deposit is still accepted by most lenders, but LMI applies and can add tens of thousands to the loan.

• 20% deposit — no LMI, best pricing, largest savings requirement
• 10% deposit — LMI applies, typically a few thousand to $15,000+ depending on loan size
• 5% deposit under the First Home Guarantee — no LMI, place limits and price caps apply
• 5% deposit outside a scheme — accepted by some lenders, LMI is significant

The costs people forget

Your deposit is not the only cash you need at settlement. Stamp duty is the big one, though most states offer full or partial exemptions for first home buyers under a price threshold. On top of that, budget for conveyancing, building and pest inspections, loan application and valuation fees, council and water adjustments, and moving costs.

Our property purchase calculator treats your savings as total funds available and works backwards — it subtracts stamp duty, fees and LMI first, then tells you the actual deposit and loan you're left with.

What lenders look at

• Stable income — payslips, or two years of returns if self-employed
• Genuine savings — often 5% of the price saved over three months or more
• Living expenses benchmarked against the HEM, plus your actual spending
• Existing debts — car loans, buy-now-pay-later, credit card limits (not balances), HECS
• Credit conduct — recent late payments matter more than the score itself
• Serviceability at an assessment rate roughly 3% above the actual rate

The order to do things in

• Work out your borrowing power and total funds before you inspect anything
• Get pre-approval so you can bid or offer with confidence
• Check scheme eligibility and price caps for your state
• Make an offer subject to finance (or bid with unconditional finance at auction)
• Formal approval, then contracts and cooling-off
• Settlement — typically 30 to 90 days after contract