How much deposit do you need to buy a house in Australia in 2026?

TL;DR. The standard answer is 20% of the purchase price — that's the deposit that avoids Lenders Mortgage Insurance (LMI). But in 2026 you can buy with as little as 5% using the First Home Guarantee (no LMI), or 2% as a single parent under the Family Home Guarantee. On a $700,000 Brisbane home, that's $140,000 (20%), $35,000 (5% scheme), or around $14,000 (2% scheme) — plus a few thousand in costs on top either way.

The number everyone quotes: 20%

The "20% deposit" rule exists for one reason — it's the threshold at which lenders stop charging Lenders Mortgage Insurance (LMI). LMI is a one-off premium that protects the lender (not you) if you default, and it kicks in whenever you borrow more than 80% of the property's value.

So on a $700,000 home:

• 20% deposit = $140,000 → no LMI, cleanest path
• Anything less → you either pay LMI or use a government scheme to avoid it

But 20% is not the only way in, and for most first home buyers it's not even the realistic one. Saving $140,000 while renting in Brisbane takes years. The schemes below exist precisely because of that.

What deposit you actually need in 2026

*A guarantor loan uses a family member's property equity as additional security so you can borrow up to 100% (plus costs) without LMI. The guarantor is legally on the hook for the guaranteed portion — serious commitment, covered below.

The schemes that let you skip the 20%

First Home Guarantee — 5% deposit, no LMI

The federal First Home Guarantee lets eligible first home buyers purchase with just 5% down and no LMI, because the government guarantees the extra 15% to the lender. Brisbane price cap is $700,000 in 2026, income caps are $125k single / $200k couple. This is the single most valuable scheme for most Brisbane first home buyers — full detail in our First Home Guarantee guide.

Family Home Guarantee — 2% deposit for single parents

Single parents (and eligible single legal guardians) can buy with just 2% down and no LMI under the Family Home Guarantee. It's a smaller, targeted scheme with its own income and property tests.

Guarantor loans — potentially 0% deposit

If a family member (usually parents) is willing to put up equity in their own property as additional security, you can borrow up to 100% of the purchase price plus costs, with no LMI and no deposit of your own. It's powerful, but it's a genuine legal commitment for the guarantor — they're liable for the guaranteed portion if you can't pay. This should never be entered into casually.

The costs most people forget on top of the deposit

Your deposit is not the only cash you need at settlement. Budget for these on top:

• Stamp duty (transfer duty) — the big one. First home buyers in QLD pay $0 up to $700k, but standard buyers pay tens of thousands. See our QLD stamp duty guide.
• Conveyancer / solicitor — $1,200–$1,800
• Building & pest inspection — $600–$900
• Lender / valuation fees — $0–$700 (often waived for FHBs)
• Loan registration + transfer fees — ~$200–$2,800 depending on price
• Council rates adjustment — $300–$800
• Building insurance — required from settlement

A realistic "cash on top of deposit" buffer for a Brisbane FHB purchase is $3,000–$8,000 (more if you're not exempt from stamp duty). Don't drain your deposit and arrive at settlement short.

The real trade-off of a smaller deposit

A smaller deposit gets you into the market sooner — which, in a rising market, can matter more than the LMI cost. But it has real downsides:

• You borrow more, so you pay more interest over the life of the loan
• If you pay LMI, that's a real cost (though it can sometimes be capitalised into the loan)
• Higher LVR = tighter lender scrutiny on your income, expenses and credit history
• Less equity buffer if property values dip — you could end up owing close to (or more than) the property's worth

The counterpoint: if you wait years to save 20% while prices and rents rise, the "saving" on LMI can be dwarfed by the extra you pay for the same house later. There's no universal right answer — it depends on the market, your savings rate, and how secure your income is. This is exactly the maths I run with buyers.

Worked example: $700k Brisbane home, first home buyer

Here's the cash you'd actually need at three deposit levels, assuming FHB stamp duty exemption applies:

*LMI can often be capitalised (added to the loan) rather than paid upfront. **If LMI is capitalised, upfront cash drops to ~$39,000 but you carry the $28k in the loan.

The gap between the First Home Guarantee path and the standard-plus-LMI path — around $28,000 — is exactly why getting the scheme right matters so much.

Frequently asked questions

Q: Can I use a gift from my parents as my deposit?

Yes. Most lenders accept a gifted deposit, but they'll want it documented as a genuine gift (not a loan) with a signed letter. Some lenders also want to see a portion of "genuine savings" — money you accumulated yourself over 3+ months — on top of the gift. Rules vary by lender.

Q: Does the First Home Super Saver scheme count toward my deposit?

Yes. The First Home Super Saver (FHSS) lets you withdraw voluntary super contributions (plus deemed earnings) to put toward your first home deposit. It counts as genuine savings with most lenders. It's a useful top-up, especially combined with the First Home Guarantee.

Q: Is it better to wait and save 20%, or buy now with 5%?

It depends on the market and your circumstances. In a rising market, buying sooner with 5% (and avoiding LMI via the First Home Guarantee) often beats waiting years to save 20% while prices climb. In a flat or falling market, a bigger deposit and more equity buffer is safer. There's no one answer — we model both paths for buyers based on their savings rate and target suburb.

Q: What's the minimum deposit to avoid LMI without a scheme?

20% of the property value. Below that, you either pay LMI or use a government scheme (First Home Guarantee, Family Home Guarantee) or a family guarantor to avoid it.

Q: Do I need genuine savings, or can the whole deposit be a gift?

It depends on the lender and your LVR. At higher LVRs (smaller deposits), many lenders require at least 5% in "genuine savings" — money you saved yourself over time — even if the rest is gifted. Some lenders waive this if you've been renting and can show a rental ledger. A broker will match you to a lender whose policy fits your situation.

Q: How much deposit do I need for an investment property?

Investment loans usually need a larger deposit — often 10–20% — because the government first-home schemes don't apply and lenders view investment lending as higher risk. LMI still applies below 20%. The exact figure depends on the lender and your overall position.

Q: Can I borrow my deposit?

Generally no — lenders want to see the deposit is genuinely yours (saved, gifted, or from super via FHSS). Borrowing your deposit via a personal loan both fails most lenders' genuine-savings tests and hurts your borrowing capacity because the repayments count against you.

Working out your number

The "how much deposit" question has a different answer for everyone — it depends on your eligibility for the schemes, whether stamp duty applies, and whether buying sooner with less beats waiting to save more. If you'd like a clear, personal answer — including which scheme combination gets you in for the least cash — book a free chat with Karann or run the borrowing power calculator and LMI calculator for a directional figure first.

Last reviewed: 2 July 2026.

Sources used in this article:

• Housing Australia — Home Guarantee Scheme
• Moneysmart — Lenders Mortgage Insurance
• Australian Taxation Office — First Home Super Saver Scheme
• Queensland Government — Buying your first home