How Much Do You Need for a House Deposit in 2025? A Friendly Guide to Getting Home-Ready in Melbourne

If you’re thinking about buying a home in Melbourne, chances are you’ve found yourself asking: “How much deposit do I need to buy a house in Melbourne?” It’s one of the first (and biggest) questions people face—and we get it, it can feel overwhelming.

But don’t worry—you’re not alone. And better yet, you’re in the right place.

At AxJ Finance, we make mortgages make sense. Whether you’re a first-home buyer or looking to upsize, we’re here to guide you through every step. Let’s break down the big question around how much deposit you need for a home loan, minus the complicated lingo.

So… How Much Is a House Deposit Really?

When it comes to answering “how much deposit to buy house?”, the short version is: it depends.

But here’s the general rule of thumb:

👉 Most lenders prefer a 20% deposit of the property’s value.
👉 However, you can buy with as little as 5% with the right support, including government schemes or Lenders Mortgage Insurance (LMI).

To give you a clearer picture, let’s break it down with a few real-world examples:

Example of Deposit Amounts

Full Value of Property	20% Deposit (no Lenders Mortgage Insurance)	5% Deposit (with Lenders Mortgage Insurance)
300,000	60,000	15,000
400,000	80,000	20,000
500,000	100,000	25,000
600,000	120,000	30,000
700,000	140,000	35,000
800,000	160,000	40,000
1,000,000	200,000	50,000
1,500,000	300,000	75,000

Example 1: Buying a home for 600,000

20% deposit = 120,000
5% deposit = 30,000

This is a common price point for first-home buyers looking in Melbourne’s outer suburbs or regional areas. With a lower deposit threshold, this could be your stepping stone into the market—especially if you’re eligible for stamp duty exemptions or the First Home Guarantee.

Example 2: Buying a home for $800,000

20% deposit = $160,000
5% deposit = $40,000

This is a popular price point for family homes or inner-suburb apartments in Melbourne. A $160K deposit might sound intimidating, but with grants, First Home Buyer schemes, or even using guarantors, the actual out-of-pocket deposit could be much less.

Example 3: Buying a home for $1,000,000

20% deposit = $200,000
5% deposit = $50,000

Hitting the million-dollar mark doesn’t mean home ownership is out of reach. You’ll need to be more strategic, especially since some government support schemes have purchase price caps—but don’t worry, we’ll help you explore every possible pathway.

Example 4: Buying a home for $1,500,000

20% deposit = $300,000
5% deposit = $75,000

At this level, we’re often talking prestige property, multi-income households, or upgraders. While a 20% deposit offers more flexibility and fewer fees, many clients are surprised to find that they can still get into a home at this price bracket with a tailored loan structure—even with less than 20%.

Why Smaller Deposits Aren’t a Dealbreaker

Many of our clients come to us worrying they don’t have the mythical 20% saved up. The truth is, you can often buy a home with far less—especially if you’re eligible for schemes like:

The First Home Guarantee Scheme
Lenders Mortgage Insurance (LMI)-assisted loans
Government grants and incentives

We’ll help you explore your options and show you exactly how far your deposit can go. You might be closer to owning your home than you think.

The most important question

The most important question is, in fact, not the deposit you have.

The most important question is: How much can you repay your loan every week or month?

Say you can afford $500 a week towards your home.

This borrows roughly $340k over 30 years at 6.5%

If you double your repayments to $1,000 weekly, your borrowing doubles to roughly $680k over 30 years at 6.5%.

Click here for a free calculator. Scroll down to the “How much can I borrow” section and enter your variables.

Breaking Down the Home Loan Process

If you’re wondering where to start, here’s how the process works when you team up with us:

Step 1: Let’s Talk Goals

Are you buying your first home? Investing? Upsizing? Downsizing? We’ll help shape the right loan strategy around your lifestyle.

Step 2: Check Your Borrowing Power

We’ll calculate what you can borrow and how much deposit you’ll need. This is where we answer the big question: “How much deposit do I need for a home loan?”

Step 3: Get Pre-Approved

We’ll prepare and lodge your application, helping you avoid common pitfalls that lead to rejections or delays.

Step 4: Find Your Property

House hunting is so much better when you know your budget. With pre-approval in hand, you’ll shop smarter—and negotiate with confidence.

Step 5: Secure the Loan

Once you’ve found the right home, we finalise the paperwork, chase the bank (so you don’t have to), and make sure settlement goes smoothly.

Putting it all together

Once you have calculated your borrowing capacity, add your deposit.

Say you can do $1,000 a week and have a $200k deposit, your total purchase would be the combination of the two – i.e., $680k loan + $200k deposit = $880k total purchase including stamp duty and costs.

Stamp duty and costs can vary in each state. It also depends on whether you qualify for waivers and exemptions.

Let’s say you’re in VIC and don’t qualify for any incentives or assistance. You would then take roughly 6% away from $880k.

The way you do this on the calculator is by entering:

880,000 ÷ 1.06

The answer you’ll get is $830,000

That is your approximate purchase price.

Cross-check, just in case

This is the quickest way to work your purchase budget backwards. Let’s cross-check in the usual way.

If you bought a property for $830,000, your stamp duty plus other purchase costs would total $880,000, as detailed below.

I’ve also added a contingency of $5,000 for comfort.

Your repayments will be roughly $1,000 a week, as shown below

This is the easiest and most straightforward way to calculate your purchase budget.

Solutions for a lower deposit

To compensate for a lower deposit, you need more income to service a larger loan. In most cases, they will be more expensive, and the loan term will be shorter, too. This means higher weekly or monthly repayments.

Here are some possibilities:

borrow the rest of the 20% through another lending institution
borrow the rest of the purchase costs through another lending institution
borrow the rest of the 20% and purchase costs by offering another property as security (the second property can be owned by family members)

Want to Dive Deeper? Helpful Guides from Trusted Sources

Still wondering “how much deposit do I need to buy a house in Melbourne?” or want to explore more perspectives? Here are some trusted resources from major banks and government sites to help you feel more informed and confident.

🏡 Westpac – How Much Do I Need Upfront?

Read it here →
Westpac gives a clear breakdown of upfront costs when buying a home, including your deposit, stamp duty, LMI, and legal fees. A great read if you’re budgeting for more than just the deposit.

🏦 CommBank – How Much Can You Borrow?

Read it here →
Commonwealth Bank walks you through the borrowing process and how your income, expenses, and savings influence how much you can borrow—plus there’s a helpful calculator.

💰 NAB – Saving for Your First Home Deposit

Read it here →
NAB explains practical strategies for saving a deposit, what lenders look for, and how different deposit sizes can affect your loan eligibility.

📊 NSW Government – Planning Your Finances

Read it here →
For NSW buyers, this government guide outlines everything from deposits to hidden costs and how to plan a realistic home-buying budget.

🏠 VIC Government – First Home Buyer Guide

Read it here →
A must-read for anyone purchasing in Victoria. It outlines deposit requirements, concessions, grants, and the step-by-step buying process in the state.

💡 OwnHome – Understanding House Deposits

Read it here →
This guide offers plain-language explanations on how deposits work, what LVR means, and how to buy with as little as 2% deposit through alternative pathways.

📘 ANZ – How Much Do You Really Need?

Read it here →
ANZ tackles the myth of the 20% deposit and explains different deposit scenarios, helping you understand what’s realistic based on your circumstances.

🌍 HSBC – What’s a Typical House Deposit?

Read it here →
HSBC covers how much you really need to get started, the impact of a larger vs smaller deposit, and how to save faster.

Disclaimers

This information is provided as general guidance only.
The figures quoted are indicative and subject to change.
Individual contracts may vary.
Based on the information provided, I assume no responsibility for any consequence relating directly or indirectly to any action or inaction you take.
I cannot guarantee and will not be responsible for any damage or loss related to the accuracy, completeness, or timeliness of the information.
Approval is not guaranteed and is subject to lender credit assessment criteria.
Your full financial situation must be considered and reviewed before any offer or acceptance of a loan product.

FAQ: How Much Do You Need for a House Deposit in Australia?

In Australia, the standard house deposit is 20% of the purchase price. This means:

For a $600,000 home, you’d ideally need $120,000.
However, you can purchase with as little as 5%, though Lenders Mortgage Insurance (LMI) will apply for deposits under 20%.

Tip: Aim for at least 10% if possible to reduce your LMI cost while keeping the goal achievable.

First home buyers in Australia can benefit from several government incentives, which can reduce the upfront deposit requirement:

First Home Guarantee (FHBG)

Allows you to buy with as little as 5% deposit, without paying LMI.
Available to singles earning < $125k or couples < $200k.
Property price caps vary by region.

First Home Owner Grant (FHOG)

Varies by state—offers $10,000–$20,000 towards your first home.

Stamp Duty Concessions

Often waived or discounted for first home buyers under a certain threshold.

Realistic Goal for First Home Buyers: 5%–10% deposit with the help of grants and concessions.

Allows you to buy with as little as 5% deposit, without paying LMI.
Available to singles earning < $125k or couples < $200k.
Property price caps vary by region.

Varies by state—offers $10,000–$20,000 towards your first home.

Often waived or discounted for first home buyers under a certain threshold.