First Home Buyers
How much deposit do you actually need in 2026?
8 min read · By Daniel Lagden · 22 June 2026
The short version
- A full 20% deposit avoids LMI but isn't the only way in.
- Eligible first home buyers can buy with as little as 5% (or 2% under some schemes) without LMI.
- Your deposit isn't the only cash you need — budget for transfer duty, legal and inspection costs.
- What you can borrow matters as much as what you've saved.
Ask ten people how much deposit you need and most will say 20%. It's the number everyone repeats, but for a lot of buyers it's not the number that matters. The real question is: what's the smallest deposit that gets you into the right property without setting fire to your finances on avoidable costs?
The 20% deposit: the 'clean' benchmark
A 20% deposit means you're borrowing 80% of the property's value. At that level, standard Lenders Mortgage Insurance drops away, you get access to the widest pool of lenders, and you're generally offered sharper rates. On a $750,000 home, 20% is $150,000 — plus buying costs on top.
It's a great position to be in. But for many first home buyers on the Gold Coast, saving $150,000 while paying rent is a multi-year project, and prices rarely sit still while you do it.
The low-deposit routes
- 5% deposit with LMI: Most lenders will lend up to 95% of the value for strong applicants. You pay LMI, but you're in.
- 5% deposit, no LMI (government guarantee): Eligible first home buyers can use the Australian Government's deposit scheme to buy with 5% down and no LMI, with places, price caps and eligibility rules applying.
- 2% deposit pathways: Some schemes — including options for eligible single parents and certain shared-equity programs — open the door at an even lower deposit. Availability is limited and changes over time.
- Guarantor loans: A family member's equity can top up your deposit so you avoid LMI without having saved the full 20% yourself.
Scheme caps, places and eligibility rules change regularly and South East Queensland allocations can run out. Always confirm what's currently available before you bank on it.
The costs people forget
Your deposit is not the only cash you need at settlement. Depending on the property and your eligibility for concessions, you may also need to cover:
- Transfer (stamp) duty — though eligible Queensland first home buyers may pay little or none up to certain thresholds.
- Conveyancing or legal fees (typically $1,000–$2,500).
- Building and pest inspections (around $500–$800).
- Loan and lender fees, and adjustments for council rates.
- Moving costs and a buffer for the unexpected.
Deposit vs borrowing power
Here's the part that catches people out: you can have the deposit and still be capped by borrowing power. Lenders assess your income against your expenses, existing debts and a stress-tested interest rate. Two buyers with identical deposits can have very different ceilings depending on income, debts and which lender assesses them.
That's why we look at both sides together — what you've saved and what you can responsibly borrow — before you fall in love with a listing that was never in range.
Frequently asked questions
Can I use a gift from my parents as my deposit?
Yes. Many lenders accept gifted deposits, often called 'gift funds'. They'll usually want a signed gift letter confirming the money isn't a loan, and some like to see it held in your account for a period (genuine savings rules). Policies vary by lender.
Does a bigger deposit get me a better interest rate?
Often, yes. Lower LVRs are lower risk, and some lenders price loans in tiers — for example a sharper rate at 80% or below, or at 70% or below. A bigger deposit can also widen which lenders will compete for your loan.
What counts as 'genuine savings'?
Genuine savings generally means funds you've accumulated or held over time — regular savings, money in an account for a few months, or shares. Some lenders waive genuine savings requirements if you have a strong rental history or use certain schemes.
