Property Purchase Loans
What Deposit Do You Need To Buy Property?
6 min read- Finance Guide
- Updated 2026
Quick answer
Many buyers aim for
20% deposit
To keep the loan at or below 80% LVR
- Lower deposit option From 5%
- Single parent scheme From 2%
- LMI risk zone Above 80% LVR
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1300 421 044
Detailed explained
The deposit is the part of the purchase price you contribute yourself, with the lender funding the balance. In practice, the amount you need is not just about the advertised minimum deposit. You also need to think about your loan to value ratio, whether lenders mortgage insurance may apply, how strong your savings history looks, and whether you have enough cash left to cover upfront buying costs.
Deposit and loan structure
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A 20 percent deposit is a common benchmark because it usually keeps the loan at 80 percent LVR or lower
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Some buyers can purchase with a smaller deposit, but higher LVR lending may involve tighter policy, stronger servicing requirements, or lenders mortgage insurance
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Your contribution may come from savings, equity in another property, gifted funds accepted by the lender, or a mix of these sources
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The real cash required is often more than the deposit itself because stamp duty, conveyancing, inspections and other costs can sit outside the loan
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DEPOSIT SNAPSHOT
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Lender funds
up to 80%
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Your deposit
around 20%
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Above 80% LVR
Lenders mortgage insurance may apply unless an eligible scheme or lender exception applies
How lenders assess your deposit
Deposit size
01
The lender works out your loan to value ratio based on the property value or purchase price and your available deposit
Funds source
02
The lender checks where the deposit is coming from, such as savings, equity, sale proceeds, or gifted funds
Costs
03
The lender considers whether you can still cover stamp duty, legal fees and other upfront costs after contributing the deposit
Servicing
04
Formal approval still depends on income, debts, expenses, credit conduct and whether you can afford the loan under lender policy
What lenders look at
Savings history
Regular savings can help show you can budget and manage future repayments
Income and employment
Stable income and employment help support serviceability and overall loan strength
Existing debts and living costs
Credit cards, personal loans and household expenses affect borrowing capacity
Deposit source
Cash savings, equity, acceptable gifted funds, sale proceeds or guarantor support may all be relevant
Credit conduct
Lenders review repayment history, defaults, enquiries and overall financial conduct
Property quality
Type, condition and location can affect acceptable LVR and lender appetite
Serviceability still matters
Even with a strong deposit, lenders still assess whether the loan remains affordable under their serviceability rules, and APRA has confirmed the mortgage serviceability buffer remains at 3 percentage points
Need Help with your Project?
What to budget beyond the deposit
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01. Stamp duty can be one of the biggest extra upfront costs, although concessions or exemptions may apply depending on the state or territory and your eligibility
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02. Conveyancing or solicitor fees are usually part of the purchase budget and should be allowed for early
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03. Building and pest inspections, valuation fees and government registration charges can all add to the amount of cash needed
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04. If the loan is above 80 percent LVR, lenders mortgage insurance may be payable unless an eligible scheme removes that cost
Common problems
Deposit issues are one of the main reasons a property purchase becomes harder to structure. The challenge is not always the headline deposit percentage. It is often the mix of deposit size, purchase costs, property quality, and lender policy.
Deposit too small
If the deposit is thin, the LVR may be too high for the lender or LMI may materially increase the total cash needed.
Possible solutions include:
Save for a larger deposit- Use equity from another property if available
- Check whether a guarantor structure is appropriate
- Review whether an eligible government scheme may help
Cash shortfall on costs
Some buyers focus only on the deposit and underestimate stamp duty, legal costs, inspections and other settlement expenses.
Possible solutions include:
- Prepare a full upfront cost budget before signing
- Check state based concessions or exemptions
- Hold a buffer for last minute costs
- Choose a purchase price that leaves room for fees
Policy or property issues
Some properties attract lower acceptable LVRs, and some buyers with a workable deposit still fail servicing or credit checks.
Possible solutions include:
- Check borrowing capacity before making offers
- Review the property type early with a lender or broker
- Reduce unsecured debts where possible
- Match the transaction to a lender that suits the scenario
Steps to get Finance
Step
01
Work out your target purchase price and model the deposit as well as all buying costs.
Step
02
Check whether 20 percent is realistic or whether a lower deposit pathway may suit better.
Step
03
Review any first home buyer grants, concessions, or deposit support schemes that may apply.
Step
04
Get a borrowing assessment or pre approval before committing to a contract.
Step
05
Confirm your deposit source documents, savings history and supporting financial information.
Step
06
Proceed with the application knowing the deposit, costs and funding structure are already mapped out.
Speak with a Property Finance Specialist
Deposit strategy is not only about reaching a number. It is about structuring the whole purchase so the deposit, loan, and upfront costs all fit together cleanly.
A specialist can help you understand whether your current savings, equity position, or buyer status is likely to suit the lenders and loan structures available.
Speak with a finance specialist about your property purchase deposit strategy
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