The classic advice says you need a 20% deposit to buy a house. The reality in 2026: many buyers are getting in with 5%, and some professions with less, without paying lenders mortgage insurance. Here’s how the numbers actually work.
The 20% benchmark
With a 20% deposit (an 80% loan-to-value ratio), you avoid lenders mortgage insurance (LMI), access the sharpest rates, and sail through approval. On a $900,000 home that means $180,000 saved, plus stamp duty and costs on top. For many buyers, waiting to save that much costs more in price growth than LMI ever would.
Buying with a 5% deposit
Under the expanded federal Home Guarantee Scheme, eligible first home buyers can purchase with as little as 5% deposit and pay no LMI, the government guarantees the gap. Since the 2025 expansion the scheme no longer has income caps or limited places, and property price caps were lifted substantially in every capital city.
Ways to buy with less than 20%
- Home Guarantee Scheme: 5% deposit, no LMI, for eligible first home buyers.
- Guarantor loans: a parent’s equity secures part of the loan; some buyers purchase with no cash deposit at all.
- Professional LMI waivers: doctors, dentists and some other professions can borrow 90–95% with no LMI. See our medico loans page.
- Paying LMI: sometimes the right move. LMI on a 10% deposit purchase can cost less than 12 months of price growth.
Work out what to save each week or month to hit your deposit goal by your target date.
Open the savings goal calculator →Don’t forget the other upfront costs
Your deposit isn’t the only cash you need on the day. Budget for stamp duty (unless you’re exempt as a first home buyer), conveyancing, building and pest inspections, and lender fees. Stamp duty is usually the biggest, estimate yours with the stamp duty calculator.
What counts as “genuine savings”?
Most lenders want to see at least 5% of the purchase price held or accumulated over three months, savings, shares, or rent history in some cases. A gift from parents can work too, but the rules differ by lender. Nathan can tell you exactly where you stand and which scheme combination gets you in soonest.