First home buyer deposit options
By Ali Hasani, Founder and Principal Mortgage Broker at Buyvest, MFAA accredited. Last updated July 2026. Scheme rules and lender policies change, so confirm current settings before relying on them.
This guide works through the options by deposit size, so you can start from what you actually have rather than from what you are told you need.
The short version: At 2% you are looking at Help to Buy or the single parent stream of the 5% Deposit Scheme. At 5%, the main 5% Deposit Scheme with no LMI and no income caps. Between 10% and 15%, you are paying LMI unless a professional waiver or guarantor applies. At 20% you avoid LMI and get the widest lender choice. A guarantor or a profession-based waiver can move you between bands without saving another dollar.
How much deposit do you actually need?
Anywhere from 2% to 20%, depending on which pathway you qualify for. The deposit is only half the question, because what you need alongside it differs sharply at each level.
| Deposit | What it opens up | The catch |
|---|---|---|
| 2% | Help to Buy, or the single parent stream of the 5% Deposit Scheme | Income limits on Help to Buy, and the government takes an equity share |
| 5% | The 5% Deposit Scheme, no LMI, no income caps | Price caps apply and you still borrow 95% |
| 10% to 15% | Standard lending without a scheme | LMI applies unless a waiver or guarantor removes it |
| 20% | No LMI, widest lender choice, sharpest rates | Takes the longest to reach |
A guarantor or a professional LMI waiver can give you the outcome of a 20% deposit without having 20%.
Buying with a 2% deposit
Two routes reach 2%. Help to Buy, where the government takes an equity share, and the single parent stream of the 5% Deposit Scheme, where it does not.
Under Help to Buy the government contributes up to 40% of a new home or 30% of an existing one and holds that share until you buy it back. Your loan is far smaller, so repayments are lower and no LMI applies. Income limits are $103,000 for a single applicant and $165,000 for joint applicants and single parents, Australian citizens only, with 10,000 places a year and a small lender panel.
The single parent stream of the 5% Deposit Scheme also allows 2%, with no income caps and no equity share, but applications are solo only. Previously called the Family Home Guarantee.
You cannot use both federal schemes. Help to Buy and the 5% Deposit Scheme are alternatives, not additions. The NSW stamp duty exemption and the First Home Owner Grant stack on top of whichever one you choose.
Buying with a 5% deposit
The Australian Government 5% Deposit Scheme is the main route, and it has no income test at any level and no limit on places.
Housing Australia guarantees up to 15% of the property value to your lender, which is what removes LMI. You own the home outright from settlement, and the government takes no share. The NSW price cap is $1,500,000 for Sydney and $800,000 elsewhere in the state.
Two things worth knowing. You do not have to be a first home buyer, the test is that you have not owned property or land in Australia in the last 10 years. And meeting the scheme rules is not the same as a lender approving you, since each participating lender applies its own credit policy on top. Our benefits and risks guide covers what a 95% loan means once you own.
Buying with 10% to 15%
Without a scheme, this is standard lending territory, and LMI applies. On a $600,000 loan expect roughly $15,000 to $24,000 at 90% LVR, varying by lender and borrower.
That premium buys you entry now rather than in a few years, which in a rising market can be the cheaper option. Our LMI guide works through whether the trade makes sense, and the LVR guide explains why moving from 81% to 79% changes more than the last few thousand dollars suggests.
Check a professional waiver first
Before accepting a premium, check whether your occupation qualifies for one. Select lenders waive LMI entirely for eligible professionals borrowing up to 90% of the property value, and up to 95% in some cases, with no income caps, no price caps and no scheme conditions.
The list now spans medical and health practitioners, veterinarians, lawyers, accountants, banking and finance employees, technology sector staff, engineers and senior federal government employees, with allied health well represented. We have dedicated pages for doctors, dentists, lawyers, accountants, actuaries, auditors, bankers, pharmacists, veterinarians, optometrists, physiotherapists, chiropractors, osteopaths, podiatrists, psychologists and sonographers, plus a no LMI home loan overview.
Eligibility differs sharply between lenders. Some cover doctors and dentists only, others define it broadly. Approaching the wrong one first can mean paying a premium you never needed to.
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Buying with 20%
No LMI, the widest lender choice and generally the sharpest rates. The only question is whether the time it takes to get there costs more than the premium would have.
At or below 80% LVR no premium applies, and lenders scrutinise the source of your deposit far less closely. If you are six months away, waiting usually wins. If you are four years away, you are paying rent and watching prices move while you save.
Where can the deposit come from?
Your own savings, a family gift, a super release, a guarantor, or equity in a property you already own. Most buyers use more than one.
Savings
A dedicated account with an automatic transfer each payday is the most effective approach, because it builds both the balance and the pattern lenders look for. Ongoing rates above 5% have been available through 2026.
At $500 a fortnight into an account earning 5%, you reach around $6,100 after a year, $34,000 after five years and $77,600 after ten. Interest earned forms part of your savings.
A family gift
A gift can form part of your deposit, but it usually will not satisfy the genuine savings test on its own, because it shows nothing about your saving. Most lenders want a signed statutory declaration confirming it is a gift rather than a loan, and evidence the funds have been transferred. Policies vary considerably on how much of the deposit can be gifted.
Superannuation
The First Home Super Saver scheme lets you build the deposit inside super at a lower tax rate, capped at $15,000 a year and $50,000 lifetime. A release generally counts as genuine savings. Request your determination from the ATO before you sign a contract, and allow several weeks for the money to arrive.
A guarantor
A guarantor loan uses equity in a family member's property as additional security. No cash changes hands, your effective LVR drops below 80%, and no LMI applies. The guarantee can usually be released once your own LVR falls far enough. The guarantor is genuinely exposed if the loan is not repaid, so both parties should take independent legal and financial advice.
Equity in a property you own
Usable equity is the property value multiplied by 0.80, minus your outstanding loan. On an $800,000 property with a $400,000 loan, your total equity is $400,000 but the usable portion is $240,000, because the rest is the buffer keeping you under 80% LVR. Our home equity calculator runs it for your numbers.
What do lenders want to see?
Genuine savings, generally 5% of the purchase price held in your own account for at least three months. The test usually applies once you are borrowing above 85% to 90% of the property value.
Below that threshold most lenders examine the source of your deposit far less closely. Above it, they want evidence you accumulated the money rather than received it. Savings, term deposits, shares held three months and a First Home Super Saver release generally count. Recent gifts, tax refunds, asset sales and borrowed funds generally do not.
If you are renting, most lenders now accept a consistent record of on-time rental payments as an alternative, typically 6 to 12 months verifiable through a licensed property manager. If your deposit is real but has not sat in an account for three months, that may solve the problem outright. Our genuine savings guide covers it in full.
What reduces the deposit you need?
The NSW benefits do not form part of your deposit, but they reduce the cash you need at settlement, which amounts to the same thing.
The NSW stamp duty exemption removes duty entirely on a home up to $800,000, which on an $800,000 purchase is more than $30,000 you do not have to find. The First Home Owner Grant pays $10,000 on a new home under $600,000, though it is credited at settlement rather than being available beforehand, and it does not count as genuine savings.
Frequently asked questions
How much deposit do I need to buy my first home?
Between 2% and 20% depending on the pathway. Help to Buy and the single parent stream of the 5% Deposit Scheme start at 2%. The main 5% Deposit Scheme needs 5%. Without a scheme, expect 10% to 15% with LMI, or 20% to avoid it. A guarantor or professional waiver can change what you need.
Can I combine deposit sources?
Yes, and most buyers do. Savings, a family gift, a First Home Super Saver release and guarantor support can work together, and the NSW stamp duty exemption and First Home Owner Grant sit alongside any of them. The one exception is that you must choose between Help to Buy and the 5% Deposit Scheme, because they are mutually exclusive.
Is there an income cap on the 5% Deposit Scheme?
No. There is no income test at any level, for singles or couples, and no limit on places. Help to Buy does have income limits, at $103,000 for a single applicant and $165,000 for joint applicants and single parents.
Do I need genuine savings?
Generally yes above 85% to 90% LVR, meaning 5% of the purchase price held in your own account for at least three months. Below that threshold lenders examine the source far less closely. If you are renting, most lenders now accept a consistent rental payment history as an alternative.
Can I use a family gift as my whole deposit?
It can form part of your deposit, but on its own it usually will not satisfy the genuine savings test. Most lenders want a signed statutory declaration confirming it is a gift rather than a loan, plus evidence of transfer. How much can be gifted varies considerably between lenders.
Can I use my superannuation?
Through the First Home Super Saver scheme, yes. You make voluntary contributions capped at $15,000 a year and $50,000 lifetime, then release them plus deemed earnings for your first home. This is not access to your existing super balance. Request your determination before signing a contract and allow several weeks.
Can I get an LMI waiver for my profession?
Possibly. Select lenders waive LMI for eligible occupations up to 90% of the property value, and 95% in some cases, with no income or price caps. The list spans medical and allied health, veterinarians, lawyers, accountants, banking and finance, technology, engineering and senior government roles. Eligibility varies sharply by lender, so see our no LMI home loan page.
How much equity can I use from a property I own?
Usable equity is the property value multiplied by 0.80, minus your loan balance. On an $800,000 property with a $400,000 loan that is $240,000, even though your total equity is $400,000. Lenders keep you at or below 80% LVR when releasing equity.
Is it better to pay LMI or wait for 20%?
It depends on the gap. Months from 20%, waiting usually wins. Years away, the premium can be cheaper than the rent and price growth you absorb while saving. Before deciding, check whether a scheme, a waiver or a guarantor removes the question entirely, because that changes the maths more than any forecast.
Next steps
Work out what your deposit supports with our property deposit calculator, then model the loan with the mortgage repayment calculator. Our pathways guide matches situations to schemes, and the budgeting guide covers what a lender will actually approve.
Learn more about our team, or see our service areas across 220+ Sydney suburbs.
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Related resources
5% Deposit Scheme | Help to Buy | Genuine savings | First Home Super Saver | Guarantor loans | No LMI home loans | Pathways to home ownership
Service areas: 220+ suburbs across Sydney including Ryde | Parramatta | Baulkham Hills | Gladesville | Penrith | Chatswood | Castle Hill | Epping | Hornsby | Blacktown | Bankstown | Hurstville | Sutherland | Manly | Bondi | Sydney CBD and more
This article is general information only and does not take your personal circumstances into account. Scheme rules, income limits, price caps, lender policies and professional waiver eligibility change, so confirm current settings before relying on them. LMI figures are indicative ranges and vary by insurer, lender and borrower. Savings projections are illustrative and assume a constant rate. For tax questions, speak with your accountant. Ali Hasani is an Authorised Credit Representative (CRN 567392) of Connective Credit Services Pty Ltd (Australian Credit Licence 389328).
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