How Much Deposit Do You Actually Need?

The 20% figure isn't a rule - it's just the point where lenders typically stop charging Lenders Mortgage Insurance (LMI), a one-off premium that can run into the tens of thousands. Sensible to avoid, sure. But while you're saving that last 10%, property prices are usually moving faster than your savings account.

The reality in 2026 (First Home Buyers)

Most lenders will approve first home buyers with as little as 5%. Under the government's expanded First Home Guarantee, eligible buyers can purchase with a 5% deposit and pay no LMI at all - the government guarantees the rest.

The scheme got a serious upgrade in late 2025: income caps are gone, places are unlimited, and as at the time of writing, the price cap for Sydney and major NSW regional centres is now $1.5 million. On an $800,000 purchase, that's a $40,000 deposit and potentially $20,000+ in LMI avoided.

Even better - it stacks with other help. NSW first home buyers pay zero stamp duty on homes up to $800,000, and there's a $10,000 grant for eligible new builds.

One honest caveat

A smaller deposit means a bigger loan and bigger repayments. The scheme gets you past the deposit hurdle but you still need to comfortably afford the loan, and your 5% needs to be genuine savings. You also need to consider the amount of equity that you have from the getgo, and in a downward market, this FHB Scheme can result in negative equity extremely quickly.

The short version

You don't need 20%. You may not even need LMI. You just need to know which schemes you qualify for and what the numbers look like for you.

Want a straight answer on what your deposit could get you? Get in touch - we'll run the numbers and check your eligibility. And yes, we actually pick up the phone.