How much deposit is enough?

Are you thinking of purchasing a house but not sure how much deposit you need? Here’s what you need to know.

Every home loan lender has different requirements, but as a general rule you will need:

  •  A minimum of 8%* of the property purchase price

The majority of lending providers are willing to finance up to 95% * of the purchase price if you qualify for a low-deposit home loan.

To qualify for a low deposit home loan you will need to demonstrate the following:

  • Stable source of income
  • Stable employment, you must be employed in your current role for at least 6, preferably 12 months or working within the same industry in a similar role. Casual and contract work is acceptable to some lenders, as long as it is ongoing and regular.
  • Have genuine savings of at least 8% *of the property value
  • Have a good credit history (this means all loans, credit cards, store cards and Afterpay are paid and up to date with no defaults)
  • Good asset position in relation to your age and income


Other costs involved in buying a house

In addition to a deposit, there are other costs associated with buying a house including:

Lenders Mortgage Insurance

If you take out a home loan with less than a 20% deposit, you’ll have to pay lenders mortgage insurance (LMI). LMI is an insurance policy that protects your lender in case you default on your home loan. For a $500,000 loan with an 8% deposit, LMI is estimated to be about $13,700. Lenders mortgage insurance is applied to your home loan and repaid over the term of the loan. However, it may affect your overall borrowing position if you have a low deposit.

Stamp Duty

Stamp duty is a State Government tax which is payable when a property is purchased. Cost varies from state to state. NSW has a First Home Buyers Assistance Scheme that offers stamp duty concessions for First Home Buyers – log on to your state government website for more information.

To calculate your stamp duty amount visit our website here:

Other expenses

Other expenses associated with purchasing a house include legal costs, pest and building inspections, home loan costs such as application and establishment fees and moving costs. We generally advise to allow around $2500 – $3000 for these.

Hunter Lending Solutions can help you determine how much you need to save for a deposit and find the right home loan to suit your circumstances.

Contact us today for a confidential chat and learn how we can assist you.

Please note* 

  • When a lender says you can borrow up to 95% of an owner occupied property value, this includes the Lenders Mortgage Insurance premium.
  • We advise borrowers to aim for 8% deposit at a minimum, as the Lenders Mortgage Insurance premium at this level will be approximately 3% of the purchase price, bringing your total borrowings to 95% of the property value.
  • Note also that this is a general guide – some lenders will not lend at this level for regional locations.