How Much Deposit Do You Actually Need to Buy a House in 2026?

Ask ten Australians how much deposit you need for a house and at least eight will say, "20%." It is the standard answer, like telling someone to drink more water or stop buying smashed avo.

The truth is messier. In 2026, some buyers still purchase with 5% or 10% deposits. A 20% deposit is still the cleanest option for a standard home loan, but it is not the only one. The smarter question is not "what is the magic percentage?" It is "how much cash do I need to buy without immediately regretting my life choices?"

This guide walks through the real numbers, where LMI shows up, how stamp duty changes the picture, and when buying earlier can actually beat waiting.

First, separate the deposit from the total cash you need

This is where people get caught. Your deposit is only one part of the upfront bill. Buying a home also usually means paying for:

• stamp duty, unless you qualify for an exemption or concession
• conveyancing or solicitor fees
• building and pest inspections
• bank fees and settlement costs
• a bit of breathing room after settlement, because the hot water system will absolutely choose the worst possible time to become dramatic

On a $700,000 purchase, the raw deposit numbers look like this:

• 5% deposit: $35,000
• 10% deposit: $70,000
• 20% deposit: $140,000

But your total cash needed may be much higher, depending on your state and whether you get first home buyer relief. Run the full purchase through the Stamp Duty Calculator before you assume the deposit is the whole story.

What happens with a 5% deposit

A 5% deposit means you are borrowing up to 95% of the property value. That can be a valid path, especially for first home buyers, but it comes with trade-offs.

The upsides:

• you can buy sooner
• you may avoid years of extra renting while you save
• you keep more cash available than if you emptied every account to reach 20%

The downsides:

• your loan is larger
• your repayments are higher
• you will often pay Lenders Mortgage Insurance on a standard loan above 80% LVR

LMI protects the lender, not you. Annoying, yes. Optional, not always. It is usually a one-off premium, often capitalised into the loan, which means you may pay interest on it for years. ASIC's Moneysmart guidance on LMI is still the simplest official explanation if you want the regulator version instead of the pub version.

If you want a quick estimate, use the LMI Calculator. Guessing is fun right up until the lender emails back.

Why 10% is the forgotten middle ground

A 10% deposit often gets ignored because everyone talks about 5% versus 20% like they are the only buttons on the machine. In reality, 10% can be the sensible middle option.

At 10%, you are still usually above 80% LVR, so LMI can still apply. But the premium is generally lower than it would be at 95% LVR, and your repayments are lower too.

A 10% deposit can make sense if:

• you are close to buying but not 20%-close
• you want to reduce LMI without delaying for another year or two
• you want a better cash buffer after settlement

For plenty of buyers, 10% is the adult compromise. Not glamorous, not reckless, just useful.

Why 20% is still the clean benchmark

For a standard home loan, a 20% deposit usually brings you to 80% loan-to-value ratio or lower. That matters because many lenders treat 80% LVR as the line where LMI is no longer required.

That can mean:

• no LMI on many standard loans
• lower monthly repayments than a higher-LVR loan
• more lender choice
• a larger equity buffer if prices wobble

So yes, 20% is still the easiest answer. The only problem is that on a $700,000 property, it is $140,000 before you even deal with stamp duty and the rest. That is not a minor side quest.

Do first home buyers still need 20% in 2026?

Not necessarily. Eligible buyers may be able to purchase with less than 20% through government-backed programs and lender-specific options.

The main federal pathway in 2026 is the Australian Government 5% Deposit Scheme. It includes a General Stream, where eligible buyers can purchase with a 5% deposit without paying LMI, and a Single Parent Stream, where eligible single parents and legal guardians may be able to buy with as little as a 2% deposit.

There are a few details worth knowing because the rules changed in late 2025. The expanded scheme no longer uses income caps, places are no longer capped the old way, and eligible General Stream buyers can qualify if they have not owned property in Australia in the last 10 years. Property price caps still apply by region, and participating lenders still assess serviceability and credit risk normally.

There is also the Help to Buy scheme, which opened for applications from 5 December 2025 in participating states and territories. That is a shared equity pathway, not a standard loan shortcut, so it has its own eligibility and rollout conditions.

Some professions may also qualify for LMI waivers with certain lenders. Doctors tend to hear about this quickly. Everyone else gets to find out later and be mildly annoyed.

So should you buy with 5%, 10% or wait for 20%?

This is where maths beats internet folklore.

Buying sooner can make sense if:

• your repayments are still comfortable at current rates and lender stress-test rates
• you qualify for a guarantee or concession
• your rent is high and saving the extra deposit would take a long time
• buying earlier still leaves you with an emergency buffer

Waiting can be smarter if:

• buying now would wipe out all your cash
• your borrowing power is already tight
• your income is variable, probationary or about to change
• you would be taking on a loan that only works if nothing goes wrong, which is not how houses behave

Remember that lenders do not just test whether you can afford the rate you are offered. APRA has required lenders to assess many borrowers using a serviceability buffer above the actual interest rate, commonly around 3 percentage points. So if your budget already looks grim before council rates, insurance and repairs, that is your sign.

A simple $700,000 example

Let us say you are comparing three paths on a $700,000 owner-occupier purchase:

• 5% deposit: $35,000 deposit, likely higher LMI, larger repayments
• 10% deposit: $70,000 deposit, lower LMI than 5%, more manageable repayments
• 20% deposit: $140,000 deposit, often no LMI, smallest loan of the three

Now add stamp duty, legal costs and inspections. Then ask one more question: what cash do you have left after settlement? That last part matters more than people expect. A smaller deposit with a healthy buffer can be safer than a glorious 20% deposit followed by total financial fragility.

If you want to test the repayment side, pair the deposit maths with the Loan Repayment Calculator and the Borrowing Capacity Calculator. It is a much better combo than positive thinking.

The practical answer

In 2026, the minimum practical deposit for many buyers is still around 5%, but the minimum practical cash needed is usually more than that once buying costs are included.

If you want the clean summary:

• 5% can work if you want in sooner and can handle the higher cost
• 10% is often the most balanced path
• 20% is still the simplest and cheapest in many standard scenarios, if you can get there without wrecking your cash buffer

The right target is not just a deposit percentage. It is a combination of deposit, upfront costs, monthly repayment comfort, and leftover buffer.