The deposit and grants explained for 2026
Almost every first home buyer starts in the same place: how much do I actually need? The honest answer is that it depends less on a single number than on which lender you use and which schemes you qualify for.
The 20% rule is a guide, not a law
A 20% deposit is the figure most people have heard, and it does matter: at 20% you generally avoid lenders mortgage insurance, which can be a significant one off cost. But it is not a minimum. Loans are routinely written with far smaller deposits, and for some buyers waiting to reach 20% costs more in rent and rising prices than the insurance would have.
The useful question is not "have I saved 20%" but "what does each option actually cost me over the next few years". That is a comparison worth doing properly before you commit either way.
Do not forget the costs on top
Your deposit is not the only cash you need at settlement. Budget for:
- Stamp duty, unless you qualify for a first home buyer exemption or concession
- Transfer and mortgage registration fees, which are set by the state
- Conveyancing and any building or pest inspections
- Lenders mortgage insurance, where your deposit is under 20%
Our property and upfront fees calculator will give you an estimate of these in about a minute.
The schemes worth knowing about
The 5% Deposit Scheme
The Australian Government offers a scheme designed to assist eligible first home buyers to purchase their first property with a deposit as low as 5%. Eligibility depends on criteria such as property price caps, residency requirements and participating lenders. Places may be limited and not all applicants will qualify.
The scheme is available in all States and Territories, however postcode or location restrictions may apply depending on the lender. Worth remembering: a low deposit may reduce upfront costs but can increase loan size and overall interest paid.
The First Home Owner Grant
The First Home Owner Grant is administered at a State and Territory level, so eligibility requirements and grant amounts differ depending on where you buy. In Victoria, the grant may be available to eligible first home buyers purchasing a newly built home, an off the plan property, or a property that has never been occupied.
Stamp duty concessions
Stamp duty rules are set by each State and Territory. In Victoria, concessions may apply for qualifying first home buyers purchasing properties valued up to $600,000, with a sliding concession up to $750,000. For the most accurate and current information, refer to your State or Territory revenue office.
Where to start
Work out your realistic borrowing range first, then reverse engineer the deposit you need for the kind of property you actually want. Doing it in that order saves a lot of wasted weekends at open homes in the wrong price bracket.
Government schemes, grants and concessions are subject to change at any time without notice. Eligibility criteria and benefits vary, so check the relevant government websites or speak with us for current information.
This guide provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.
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