One of the most common questions first-time home buyers ask is, “How much do I need for a deposit?”

Here’s a breakdown:
The Minimum Deposit Requirement
To get started, you’ll need to save at least 5% of the property’s purchase price. This amount must come from your own savings.
But why exactly do you need to put down this deposit?

1. Banks Require a Contribution
Lenders won’t finance the entire cost of your new home. They need to see that you’re contributing some of your funds to the purchase—at least 5%—to show your commitment and ability to save.
If your deposit comes in the form of a gift from your parents, that’s generally acceptable. Just make sure the money sits in your account untouched for at least three months, so the bank can count it toward your savings history.

2. Proving Your Ability to Save
If you’ve never borrowed before, the bank wants to see that you can save money consistently. Having a deposit shows that you’re financially responsible and can manage your money, which is a key factor in loan approval.

Keep in Mind: Lenders Mortgage Insurance (LMI)
If your deposit is less than 20% of the property’s value, you’ll likely need to pay Lenders Mortgage Insurance (LMI). This is a common scenario for first-home buyers, and while it adds to your costs, it allows you to enter the market with a smaller deposit.

Additional Costs to Consider
When planning your deposit, remember that there are other expenses involved in purchasing a home. We make sure to calculate all of these costs for our clients, so there are no surprises on settlement day. Some of the additional expenses include:
• Conveyancing Fees
• Stamp Duty and Other Government Fees
• Mortgage Registration Costs

Don’t worry if you’re not familiar with these terms—we guide our clients through the entire process to ensure they’re prepared for every step.
By understanding how much deposit you’ll need and factoring in all related costs, you can approach your home-buying journey with confidence.