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How much deposit do you need to buy a house?

The ability to save enough money to pay for a mortgage can be an absolute Holy Grail for first-home buyers.

In the current market, what amount do you really require? Do you require an initial deposit of 20? Do lenders let you in with a lesser amount?

Here’s what you should be aware of.

What is the minimum amount of deposit I require to buy a house?

20% was the minimum amount, however buyers are more likely to buy with a smaller deposit than waiting , as prices are usually rising more quickly than they are able to save.

Most lenders require applicants to provide at minimum 5% 澳洲买房首付 of the value of the home they want to purchase. However, based on the particular situation, they might require more.

A deposit of 5% for a loan of $680,000 is equivalent roughly $34,000. This is a lot lower than what many potential buyers think their deposits would require to be (although this does not consider the hidden costs associated with purchasing a house).

What other costs upfront should I consider paying

There are other costs to take into consideration when purchasing the home of your dreams.

Legal and conveyancing fees
Stamp duty
Pest and building inspection
Mortgage registration fee
Transfer fee
Fees for loan application

Do you want to avoid paying stamp duty? Here are some options to save money:

Find your first home
Build or buy a new home
Find a cheap house
Purchase a house to reside within (not as an investment)

Federal government first home buyer incentives

There are several ways the government can aid in the purchase of a house.

First Home Guarantee

First Home Guarantee First Home Guarantee is designed to assist first-time home buyers get their homes more quickly by offering a warranty 15% of the value of a home that is newly built. It means that first-time buyers could be able to purchase an apartment with just a five-per cent down payment without having to purchase Lenders Mortgage Insurance.

In its most recent budget, The Federal Government announced an extension of the scheme, allowing additional 35,000 spaces as well as lifting the restrictions on prices that are allowed for homes.

Guarantee for family homes

The Family Home Guarantee, first introduced in the 2021 Federal budget, then revised in 2022, permits single parents with a qualifying income to purchase an investment property for that is as low as 2%, and without having to pay for mortgage insurance.

In the family home Guarantee the single parent could construct a new house or purchase an existing property with a down payment of less than 2 percent plus the costs and the government will guarantee as much as 18% worth of the home.

Usually, those who don’t have the total of 20%, in addition to other expenses upfront usually have to cover mortgage lenders insurance.

This can help single parents get into or re-enter the housing market earlier and also save thousands in LMI costs.

Morrison government announced that the Morrison government announced that the amount of guarantees that are available each year under the scheme would increase to 5,000 each year up to June 2025. This is a doubling of the number of places available in the previous budget.

First Home Super Saver scheme

The First Home Super Saver Scheme is a federal program which allows first-time buyers to tap into their super funds to purchase the property they want.

However, it is essential to take a look at the fine print in this article This scheme allows buyers to use the extra super-payments they’ve made to the sole purpose of buying homes. That means they must make additional voluntary contributions to the First Home Super Saver (FHSS) Scheme, which they are able to withdraw at the time of purchase.

This permits customers to take advantage of the tax benefits that superannuation enjoys. The first $25,000 that you transfer in your super fund every year is taxed only 15%, not the typical marginal rate.

More information from Guides

All compulsory contributions that your employer contributes along with your own voluntary contributions can be counted toward the threshold. So, you could contribute more to the home deposit as less of it will be absorbed by tax.

First Home Owners ‘ Grant

The grant from the state government is designed to reduce the price that first-time homeowners are required to pay, based on whether they purchase property in metropolitan or regional zones or if they are buying an existing or newly built residence.

For instance, in Victoria the grant is set at $10,000 for those who purchase in metro regions, but it increases to $20,000 for buyers looking in rural regions. The grant is available in South Australia the grant is only available to first-time home purchasers who build their own house or purchase the property as a new construction.

Guarantee for home security in the region

Regional Home Guarantee Regional Home Guarantee is an extension that is part of First Home Guarantee which allows qualified buyers to purchase an additional home that is not located in metropolitan areas for a lower down payment.

Regional Home Guarantee Regional Home Guarantee allows borrowers to not have to pay mortgage insurance to lenders (LMI) since the government is an guarantor for a portion of the loan.

Typically, borrowers are forced to pay for LMI if they don’t have a 20percent deposit. However, after the rapid rise in price it has become difficult to accomplish.

In the scheme, qualified applicants can buy new homes with a deposit up to 5 percent.

Is a first-time buyer better off saving up for an additional deposit?

In today’s dynamic markets, taking a few more months to save money and get mortgage insurance out of the way could cause the homes in your price range will increase in value far more than the price of the insurance.