Demystifying the Home Deposit Mystery: How Much Do You Need?

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Demystifying the Home Deposit Mystery: How Much Do You Need?

Saving up enough money for a home deposit is the first step towards buying your own home. But how much do you actually need to save? Is the amount the same for all home buyers? How much do you need for a house deposit?

The figure relevant to you depends on a number of factors. In some scenarios, applicants can borrow up to 95 per cent of their prospective property value leaving just 5 per cent for deposit plus purchase costs.

However, many banks and lenders recommend having at least 8 per cent plus purchase costs as a minimum saved up.

Why a Higher Home Deposit is a Good Thing

Having a higher home deposit will work in your favour for a number of reasons:

A large deposit shows that you are a great saver and could increase your chances of getting your loan application approved with prime lenders.

More deposit means borrowing less, which means there’s more chance of paying less interest over the life of your loan.

If your deposit is less than 20 per cent, you may need to pay Lenders Mortgage Insurance.

Here is an example of the deposit you’ll need depending on your house price purchase:

House price 5% deposit 20% deposit
$450,000 $22,500 $90,000


$32,500 $130,000


$42,500 $170,000
LMI required?


Yes No

How much is Lenders Mortgage Insurance?

Lenders Mortgage Insurance (LMI) is a one-off, non-refundable, non-transferrable premium that’s added to your home loan. It’s calculated based on the size of your deposit, loan to valuation bracket, and how much you borrow. These calculations are very important as they can cost you thousands of dollars in extra insurance.

LMI protects the bank against any loss they may incur if you are unable to repay your loan.

Let’s have a look at how much LMI you’re likely to pay if you have a deposit of less than 20 per cent:

House price


5% deposit LMI Estimate


$22,500 $14,364


$32,500 $27,849


$42,500 $36,418

The Queensland Government assistance schemes such as the First Home Owner Grant, HomeBuilder Grant, and the federal government’s First Home Buyer Deposit Scheme may also assist with your home loan deposit and help lower fees on the transaction.

So, with this information, how much do you need for a home deposit? The best place to start is to contact a professional mortgage broker. They can assess your income and savings to determine what price range you should be looking at to purchase and what your loan options are. This way you’ll know that your house deposit range and options are unique to you and you can start house hunting with confidence.

Other Considerations to Make When Buying a House

buying a house after paying home deposit

There are lots of other things to consider aside from a home deposit when you’re thinking of purchasing a house. These include a good credit score, your debt-to-income ratio, the types of loans available to you, and even the current interest rates in the country. Let’s tackle a few of these considerations.

The Importance of a Healthy Credit Score

When thinking of buying a home, aside from asking “How much deposit do I need for a house?” you must also assess your credit score. Your credit score is a numerical representation of your creditworthiness. Lenders sometimes use this to determine how much you can borrow and what terms as well as rates to give you.

A higher score can open doors to better mortgage rates and more favourable loan terms. Checking your credit score and rectifying any discrepancies before planning on buying a home is wise. If your score is lower than expected, consider paying off outstanding debts, ensuring your bills are paid on time, and avoiding multiple credit inquiries in a short period.

Checking Your Debt-to-Income Ratio

Aside from your home deposit, your debt-to-income ratio (DTI) is a vital financial metric utilised by lenders to evaluate a potential borrower’s capacity to manage and repay debts. It’s determined by dividing an individual’s total monthly debt obligations by their gross monthly income. The resulting percentage offers a snapshot of how much of a person’s earnings are allocated to servicing debts.

Exploring Different Types of Home Loans

Australian lenders offer a range of home loan options. Fixed-rate loans provide certainty with consistent monthly payments for a pre-determined timeframe, while variable rates might offer lower initial rates but can fluctuate month to month. Interest-only loans, where you only pay off the interest for a set period, can be tempting due to lower initial repayments but might cost more in the long run.

Know that your home deposit will also have an impact on which home loan types and features you can access. The bigger your home deposit, the more options are available to you.

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The Impact of the Reserve Bank’s Decisions

The Reserve Bank of Australia (RBA) also plays a pivotal role in the housing market. Its decisions on interest rates directly influence the rates offered by lenders. Staying informed about the RBA’s movements can help you anticipate potential rate changes and make informed decisions about your mortgage.

Strategies to Boost Your Deposit Savings

If you’re asking, “How much deposit do I need to buy a house?” chances are, you don’t have enough to widen your range of options. It might be a good idea to increase your savings, so you have enough money for a good home deposit amount.

Growing your deposit can be accelerated with the right strategies. High-interest savings accounts or term deposits can offer better returns on your savings. Consider pooling resources with a trusted partner for a joint mortgage. Additionally, gifts or inheritances, if available, can significantly boost your deposit.

Will the Home Deposit Amount Change in the Future?

Predictions suggest a steady growth in the Australian housing market, influenced by both domestic and global economic factors. As the market evolves, experts believe that the ideal home deposit size might shift, emphasising the importance of staying informed and adaptable.

Sunshine Coast Financial Solutions is Here for You

Understanding home deposits and all the intricacies associated with them is crucial for anyone looking to step onto the property ladder. With professional advice from our expert mortgage brokers here at SCF Solutions, you can navigate the property market confidently. Our team can help you make informed decisions, which can help pave the way for a secure home ownership journey and financial future.

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What our Clients Say

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I’ve recently had the pleasure of working with the team at Sunshine Coast Financial Solutions to secure a new mortgage. Throughout the entire process, communication was clear, professional & friendly. I was kept up to date and was well informed every step of the way. I wholeheartedly recommend Sunshine Coast Financial Solutions to anyone in need of expert mortgage advice & assistance.
This is the 3rd time we have used SCFS, this time for an investment property and refinance overall.Chris advised us to what our best options were taking into account taxable nature of investment and how best we structure between that and our owner occupied.The team at SCFS found us a much better rate overall and have infact reduced our monthly payments.Chris and team (Adam, Darryl, Shanina) keep you updated every step of the way and make the process seamless and easy even when we have had more complicated lending requirements.We have had the pleasure of referring several of our friends to SCFS who have been equally impressed. We are based in NSW, and absolutely no issues being in a different state.If you are after a personal service, and one that continues to proactively manage the best deal for you ongoing this team will look after you.
Very helpful team with excellent communication throughout the whole process. Would definitely use again and highly recommended!
The team was friendly and very easy to deal with. They made the process of getting a loan easy by walking us through every step.
The experience we had with Sunshine Coast Financial Services was incredible. They were professional, knowledgeable and reassuring from the start of our house purchasing journey right to the finish.Apart from all the team, we were lucky enough to have Daryl Hermann assisting us.He was so positive, helpful, encouraging and always happy to answer any questions that I had and there was plenty….Thanks to SCFS we are now the proud owners of a home we could only have dreamt of.Without a shadow of doubt I would highly recommend anyone looking to purchase a home to give these guys a call.I know I certainly will when I choose to purchase another property.
Easy to deal with, happy with the results
Very supportive, available, thorough and professional- highly recommend.
My partner and I were super keen to get into the property market and reached out to Chris and his team as a result from reading these outstanding reviews and they did not disappoint. The team have been nothing but transparent throughout every process of building our first home and answered all our questions in record time. Thank you for your continuous support! Anyone needing assistance needs to look no further then SCFS! If I could put 10 stars I would.
Just wanted to thank Chris Wilson and Tracey Butler for looking after me again with my home loan. My fixed rate is expiring soon. Weeks ago Chris contacted me to discuss my options, the process and a plan of attack.Tracey diligently stepped in right on cue and executed the plan with a superb outcome. A better than expected interest rate, not just for now but for the future of my home loan. I couldn't be happier.This team makes you feel like they step into their customers shoes as if it was their own home loan. They strive to do everything they can for their customers and in such a friendly and professional manner. Thank you again Chris and Tracey.
Efficient, helpful and honest advise. Highly recommend
What a treat it was to work with Chris and his team, they are extremely professional and we're able to find me a much better deal on my home loan. I'm now saving thousands each year! I couldn't recommend him highly enough 👍
Sunshine Coast Financial Solutions worked magic for this first home buyer. The home-buying process is very daunting for newcomers, when searching for your dream home it's hard to know the usual steps and who to trust. Chris and Adam from SC Financial Solutions provided professionalism and attention to detail each step of the way, helping to relieve stress and bring peace of mind knowing we were in safe hands throughout this life changing decision. I'll recommend SC Financial Solutions to everyone searching for an award-winning knowledgeable, reliable and responsive brokerage team.
This new homeowner is thrilled to leave a review for Chris and his colleague Adam at Sunshine Coast Financial Solutions. These mortgage wizards worked their magic on a loan for me, comparing all leading banks of Australia, with a great result. Their efficiency and advice meant I could make a fast and easy settlement. Chris and his team have made our first home buying experience so much easier.If you need a mortgage, I couldn’t recommend enough🌞🏡 Sunshine Coast Financial Solutions 🌞🏡
Excellent service, fast and efficient. I have been using the SCFS team for years and recommend them to anyone for finance solutions. You lean back and relax while they do the hard work and find you the best deal. Very happy 😊
Today is approval day something I did not think I would be doing in this day and age with how life has been but thanks to the team at SCFS it's all been made possible and easy couldn't recommend a greater team, will definitely be using them for my next few houses
I've been using Sunshine Coast Finance for a number of years over which time they have taken care of the finance for 3 properties, I can't recommend them enough.
On behalf of my wife and I, We highly recommend Chris and his team for your financial needs. They made our process feel smooth and enjoyable, and we will definitely be returning in the future for their services.
My husband and I have worked with Daryl for a while now and the experience has been nothing but beyond exceptional. The work he puts in to help us is incredible. We would be lost without his expertise and guidance. We couldn’t recommend Sunshine Coast Financial Solutions more highly.
It was the first time for me to buy a house. I really had no idea how complicated it is. The Sunshine Coast Financial Solutions team support was amazing; they took care of everything and negotiated a very convenient interest rate. The communication was also fantastic. Great result with a minimum effort. Highly recommended
Absolutely amazing service. From start to finish the communication was 100%. We were kept up to date throughout the entire process and always felt supported. Daryl was so easy to talk to, responded to every question we had and I cannot thank him enough, we really appreciate all that he did for us. I will not hesitate using their service again in the future and have passed on their details to friends! Thankyou again for everything!
Excellent professional and friendly service, excellent communication, kept us informed throughout process. Highly recommend
The team at scfs are awesome. Thank you so much for making my home refinance a breeze. I've been asked by few people now, how I got this so quickly. I said "my broker is the gun". Thank you so much Chris, Shanina, Adam, Daryl and Tracey, for all your hard work, and dealing with me. Definitely 5 stars👍
I highly recommend Chris and his team @ SCF Solutions to anyone going through a divorce or any other life transition that involves financial decisions.Chris’s expertise, practical approach, and easy-going nature provided the clarity I needed to make informed decisions about my financial future. Chris’s open and honest manner empowered me with a strong understanding of my financial position and lending capability which eased the burden associated with the division of the matrimonial home. He treated me like a priority and provided valuable guidance and support every step of the way as I navigated through an emotionally challenging time.Communication during critical times in the process such as loan approval and settlement was outstanding, even when this fell over the Christmas/New Year period. Someone from his team was always available to answer any questions or concerns and provide reassurance when needed.Second time I have engaged Chris over the past 8 years, and I can proudly say I will remain a lifelong customer!If you want the best possible mortgage to suit your specific financial situation then you can’t go past Chris and his team.
Chris and his staff members are always very helpful and informative.
Another brilliant experience with the SCFS team. Excellent from start to finish - thanks so much Chris and the team 👍
Excellent, thank you
My partner and I had Jo and Shanina from SCF help us with our home loan, everything was quick and effortless which is what we wanted. Highly recommend them!We also just had a 1 year review from Tracey and she ensured we were still getting the best rate :)
Chris and his team have helped me again to buy a property which was a stress free and quick process. I have complete trust in Chris and would highly recommend his business.
Chris and the team have been very helpful throughout the process keeping me informed every step of the way.SCF saved me lots of money from my current loan and will keep an eye on it from now on.Well done team
Adam and the team made our process super easy and they were very helpful. Would definitely recommend them ☺️
Chris and his team made financing our new home purchase a smooth process that left nothing to chance. With his support we were able to confidently bid on and secure our dream home and he made sure we had the very best deal we could achieve in record time.Chris coached us through each step and was always available to answer our questions and provide guidance when we needed it.Overall his team is professional, friendly, helpful and always approachable.We couldn't have achieved the result we did without his help and we would definitely use his services again.We can thoroughly recommend Sunshine Coats Financial Services and Chris Wilson to anyone looking to arrange their finance. You won't be disappointed!
Chris & the team have been fantastic from start to finish. Patient, professional & supportive throughout the whole property purchasing journey. They have gone above and beyond to help me into a property, I am very happy with my experience from start to finish. I can’t speak highly enough of their transparent and professional approach.
Once again, Chris and the team at SCF have provided us with excellent service. They are professional, efficient and always available to answer questions and concerns. We would highly recommend them.
I recently purchased my home using the SCF Solutions for my financial needs, and I must say that I had a fantastic experience. The person who handled all my transactions on my behalf, Daryl Hermann, was extremely meticulous and efficient. His attention to detail and promptness in completing all the necessary tasks left me truly grateful. I highly recommend SCF Solutions for anyone in need of financial services. Thank you, Daryl, and the entire team at SCF Solutions for your outstanding support!
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So much thanks to Chris and the team at SCFS. We had a very difficult and compressed settlement subject to many finance extensions. The whole way through the journey the whole team were absolutely professional and got us into our new home.I Very highly recommend there services toAll.Your sincerelyCraig Jenkins & Katherine Thompson
Adam and the team at SCF have been fantastic in finalising my re-finance. Adam provided insightful knowledge on lenders that would be more suited to my situation and the best avenues to go forward with. He achieved my expected result within a really short timeframe. No question was too silly. Can’t recommend Adam enough.
The team were amazing to work with. They made the process so easy, kept us updated on the process and gave us multiple options to achieve our goals. Couldn’t recommend them enough!!
Chris and the team make it so easy and hassle free. Cannot recommend them highly enough and wouldn't use anyone else apart from them.
Chris is very professional and always does everything to help us out!
Chris and the team were fantastic in helping us get our mortgage for our first home in Australia. They helped us through the process and were supportive, attentive and helpful throughout the entire process. I would heartily recommend SCF!
Chris was great to deal with, straight to the point and got what we needed done. Explains everything you need to know in detail.Extremely happy with the outcome 👌🏻
I am a repeat client of Chris and his team. In every experience I have had has been 100% positive. Chris and his team do everything possible to make every step through the process explained and run smoothly. I highly recommend anyone looking to finance or refinance to talk to Sunshine Coast Financial Solutions.
the scfs team were fantastic from start to finish in getting my new loan. Nothing was a problem for them. Getting everything sorted very fast. Very fast replies and always keeping you updated.I can't recommend daryl and the team enoughThanks again
Chris, Shanina and the rest of the team were so super helpful, understanding and really got the best rate for me! Not only that their communications were so clear, consistent and they were always available for help and advice! Would highly recommend to anyone!! Thank you team!!
SCFS have assisted us with brokerage a few of times now and Chris, Matt, Shanina and the team have been fantastic every time!