How much deposit do you need to buy a home in Australia (and what is LMI)?

Lenders typically want a deposit of a certain share of the purchase price, with a larger deposit attracting fewer conditions. The more you put down, the less you borrow and the lower your repayments and total interest.

If your deposit is below the usual threshold you may still be able to buy, but an extra cost called lenders mortgage insurance can apply.

Lenders mortgage insurance protects the lender, not you, if a loan with a smaller deposit ends up in default. It is usually a one-off cost, and it can often be added to the loan rather than paid upfront, which spreads it out but means you pay interest on it.

It lets some buyers get in sooner with a smaller deposit. Whether that trade-off is worth it depends on your goals, how fast prices are moving, and how long you would otherwise spend saving.

Saving a larger deposit is the obvious route. Some buyers also use a family guarantee, where a relative offers equity in their property as additional security, and certain government schemes can help eligible buyers reduce the deposit hurdle.

Each option has rules and trade-offs, so it is worth understanding them before deciding which path suits you.

We will model your deposit against real loan options, show you where lenders mortgage insurance kicks in and what it would cost, and compare ways to reduce it across a whole-of-market lender panel.

Book a no-obligation chat and we will work out the smartest deposit strategy for you.