Minimum Deposit for a Home Loan: Lender Rules

The minimum deposit for a home loan is 5% of the purchase price on an ordinary loan with lenders mortgage insurance (LMI), or 20% on an ordinary loan without it. Two Australian Government schemes let eligible buyers start from 2% with no LMI. Helia, an Australian LMI insurer, has a Family Pledge product that needs no deposit when a family member’s property backs the loan, under its 10 August 2026 guidelines.

Purchase costs sit on top of the deposit. On a fictional $700,000 home in Victoria, a 10% deposit of $70,000 grows to $116,570 in cash once stamp duty, other purchase costs and a $3,000 contingency are added. That total assumes the LMI premium is added to the loan.

How Much Deposit You Need

On a fictional $700,000 home, you need at least $35,000 (5%) on an ordinary loan with LMI or $140,000 (20%) on an ordinary loan without it. The deposit is the share of the price you pay from your own money, such as savings or sale proceeds, or from gifted money.

No single percentage applies to every loan. The minimum moves with the purchase price, the lender’s valuation, the loan-to-value ratio (LVR) limit, the insurance or guarantee route and the lender’s own risk settings.

Under Helia’s 10 August 2026 underwriting guidelines, LVR is the loan divided by the lower of the purchase price and the lender’s valuation. When the lender’s valuation comes in low, the deposit rises. If the valuer puts a $700,000 contract at $680,000, a 90% LVR loan is $612,000 and you must find $88,000 instead of $70,000.

The table shows the lowest deposit on each route. Purchase costs are extra on every route in the table except Helia’s Family Pledge, where the loan can also cover costs of up to 10% of the price.

Route	Lowest deposit	What protects the lender	Assumptions and exclusions
Ordinary loan without LMI	20% (80% LVR)	The property security, with a 20% equity buffer	The lender’s valuation must support the price
Ordinary loan with LMI	5% (95% LVR) for a home to live in	LMI, a premium the borrower pays at settlement or adds to the loan	Helia’s standard maximum. Investment loans cap at 95% including the added premium
Australian Government 5% Deposit Scheme	5% for first home buyers, 2% for single parents and legal guardians	A government guarantee, so no LMI	Eligible buyers only. The 5% Deposit Scheme guide explains who qualifies
Australian Government Help to Buy Scheme	2%	A government equity contribution of up to 30% for an existing home or 40% for a new home, with no LMI	The government shares in any gain or loss on the home. Income limits, price caps, participating lenders and citizenship rules apply. Buyers can’t already own property, apart from narrow exceptions for some single parents. The Help to Buy guide covers the details
Family guarantee under Helia’s Family Pledge	None, up to a $750,000 loan	Security over a family member’s property, plus Helia LMI	Assessed as a separate structure. The home loan guarantor guide covers who can act as guarantor

The Helia rows follow the same underwriting guidelines. The official 5% Deposit Scheme page and Help to Buy Scheme page supply the scheme settings, as at September 2026.

Unlike Helia’s Family Pledge, a lender’s own family guarantee can remove LMI. Westpac’s Family Security Guarantee page, as at September 2026, says the guarantee can bring the LVR under 80%, so the borrower won’t pay LMI.

Here’s what each deposit level means on a fictional $700,000 home where the lender’s valuation matches the price. The premiums are Helia’s estimates for this home from its LMI fee estimator, as at September 2026, including goods and services tax (GST).

Deposit	Deposit amount	Loan before LMI	LVR	Route that applies
5%	$35,000	$665,000	95%	An ordinary loan with LMI from a lender that accepts 95% LVR, with a Helia premium estimate of $26,397 including GST. An eligible buyer can use the 5% Deposit Scheme with no LMI instead
10%	$70,000	$630,000	90%	An ordinary loan with LMI, with a Helia premium estimate of $14,617 including GST
20%	$140,000	$560,000	80%	An ordinary loan without LMI

In Helia’s estimates, halving the deposit nearly doubles the premium. The estimates assume a home to live in, a buyer who has owned a home before and a 30-year term. Each figure leaves out the state insurance duty charged on the premium.

The estimator’s terms say Helia sets the actual premium when the lender applies for LMI. Its LMI overview says the premium can be paid at settlement or added to the loan. Adding it lowers the cash you need but raises the debt and the interest paid.

When Helia limits the LVR for a specific loan product, you need a larger deposit for that loan. Lenders also set their own maximum LVR, so some accept a 5% deposit and others ask for more. A mortgage broker can compare those limits across lenders for you.

A broker can use Bulma to check a lender’s genuine-savings or gifted-deposit rule against its quoted policy wording. The lender’s rule, rather than a single market-wide deposit percentage, decides whether those funds count.

Calculate Funds to Complete

Funds to complete is the total cash you need by settlement. It covers the deposit, every purchase cost and a contingency, which is a buffer for costs that come in higher. Keep three amounts separate when you work it out.

• The deposit is your share of the price.
• Purchase costs are the stamp duty, fees and adjustments you pay in cash.
• Accessible funds are the money you can use by settlement day.

The contract of sale also sets a contract deposit, which is the part of the price you pay before settlement. It counts toward the price, so it changes when you need the money, not how much. On a Victorian private sale, Consumer Affairs Victoria says the buyer is asked to pay it, in full or in part, with their written offer.

If you can’t pay the contract deposit in cash by its due date, a deposit bond can stand in for it. Moneysmart describes a deposit bond as a guarantee that the buyer will pay the full deposit by an agreed date.

In this fictional September 2026 example, the buyer is purchasing a $700,000 home in Victoria to live in. They’ve owned a home before, so no first home buyer stamp duty concession applies. They’ll put down 10% with a lender that insures through Helia and add the LMI premium to the loan.

Stamp duty, which Victoria calls land transfer duty, comes to $37,070 on this home. State Revenue Office Victoria’s concessional rate for a home to live in stops at $550,000, so the general rate applies. The other costs are assumed amounts, including any GST.

Item	Amount	Basis
Deposit (10%)	$70,000	$700,000 price less the $630,000 loan
Stamp duty	$37,070	$2,870 plus 6% of the value above $130,000
Conveyancing	$2,000	Assumed fee and searches
Land registry fees	$1,900	Assumed transfer and mortgage registration fees
Lender charges	$800	Assumed application and settlement fees
Building and pest inspection	$600	Assumed
Settlement adjustments	$1,200	Assumed council and water rates the seller prepaid
Purchase costs	$43,570	Stamp duty plus the assumed costs above
Contingency	$3,000	Buffer for costs that come in higher
Funds to complete	$116,570	Deposit, purchase costs and contingency

The same purchase needs $81,570 in cash with a 5% deposit and $186,570 with a 20% deposit. If the buyer pays the $14,617 Helia premium estimate (including GST) upfront, the 10% route needs $131,187 before insurance duty on the premium.

A first home buyer in Victoria can pay less stamp duty, which lowers each of these totals. The first home buyer stamp duty guide shows how the concessions change the figures.

Test the funds to complete for your chosen deposit against your accessible funds. Count only money you can use by settlement day. Leave out a term deposit that matures after settlement and shares whose sale money won’t reach your account before settlement.

Verify the Source

Every dollar in the funds to complete needs a record that shows where it came from. Match each source of funds to its record before you count on it.

• Savings need account statements in your name that show the balance and how it built up.
• A gift needs a declaration signed by the giver that says the money is a gift. Add the account statement that shows the money arriving.
• For an asset sale, keep the sale contract or settlement statement with the account statement where the proceeds were paid.

Genuine savings is the part of the deposit a lender accepts as money you saved over time. The genuine savings guide explains which deposit funds count as genuine savings and how to prove them. For how lenders treat gifts, read the gifted deposit guide.

Choose the Next Check

Compare your accessible funds with the funds to complete at each deposit level. The size of any shortfall shows which route needs a separate assessment. Work through these checks in order.

1. If your accessible funds cover a 20% deposit plus purchase costs, start with an ordinary loan at 80% LVR without LMI.
2. If they cover at least 5% plus purchase costs, check your savings against the lender’s genuine savings rules before you rely on a 90% or 95% LVR loan.
3. If you’re buying your first home or are a single parent or legal guardian, check the Australian Government 5% Deposit Scheme as a separate route.
4. If you work in a profession that some lenders exempt from LMI, check the LMI waiver options for that profession.
5. If your funds fall short of 5% plus purchase costs, look at a family guarantee or the Help to Buy Scheme.

This comparison uses the fictional $700,000 purchase and its $46,570 in purchase costs and contingency. Helia’s premiums come from its estimator as at September 2026, and the Family Pledge row and the 5% row’s evidence rule follow its 10 August 2026 guidelines. The premium estimates include GST and leave out the insurance duty on the premium.

Route	Cash needed	Guarantee or scheme support	LMI	Total cost effect	Evidence to collect
20% deposit without LMI	$186,570	None	None	Smallest loan, at $560,000	Records for $186,570
10% deposit with LMI	$116,570	None	Helia estimate of $14,617 including GST, added to the loan	Loan of $644,617 before insurance duty, with interest on the premium	Records for $116,570
5% deposit with LMI	$81,570	None	Helia estimate of $26,397 including GST, added to the loan	Loan of $691,397 before insurance duty, with interest on the premium	Records for $81,570, including non-borrowed money in the buyer’s name equal to at least 5% of the price, which Helia requires above 90% LVR
5% Deposit Scheme	$81,570, less any first home buyer stamp duty concession	Government guarantee	None	Loan of $665,000 with no premium	Records for $81,570 plus scheme eligibility
Help to Buy Scheme	$60,570, less any first home buyer stamp duty concession	Government equity contribution of up to 30% for an existing home	None	Loan of $476,000 at the full 30%, and the government shares in the home’s value	Records for $60,570 plus scheme eligibility
Family guarantee under Helia’s Family Pledge	The $3,000 contingency plus Helia’s premium, unless the lender adds the premium to the loan within Helia’s limits	Security over a family member’s property	Premium set by Helia when the lender applies	Loan of $743,570 before the premium, which covers the price and $43,570 in purchase costs. The lender may sell the family member’s property if the buyer defaults and the family member can’t pay	Records for the buyer’s cash plus the family member’s documents

Assume the fictional buyer holds $120,000 in accessible funds and doesn’t qualify for either government scheme. No family member can offer security, so the family guarantee is out. The 20% route needs $66,570 more than the buyer holds.

For this buyer, the 10% deposit with LMI is the best fit. Their $120,000 covers its $116,570 funds to complete, and it needs a smaller premium and loan than the 5% route. It leaves $3,430 beyond the $3,000 contingency.

With the 5% route, $38,430 would remain beyond the contingency, which is $35,000 more than the 10% route. That extra cash costs $11,780 more in Helia’s estimated premium before insurance duty and adds $46,780 to the loan. The 5% route suits a buyer who needs the larger cash reserve more than the smaller loan.

Before you apply, ask the lender which insurer it uses and get the premium for your actual loan. If the insurer isn’t Helia, rerun the 10% and 5% rows with that insurer’s premium. A mortgage broker can compare these costs across lenders for you.