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Updated October 2026 · Written with Victorian buyers in mind.

The house deposit has become Australia's national sport: everyone has an opinion, nobody has enough avocado toast money, and the finish line moves every spring. Let's cut through it with real numbers, the rules lenders use, and a savings checklist.

The short answer

Most lenders want at least 5% of the property's value, and 20% is the benchmark to avoid Lenders Mortgage Insurance (LMI). Government help can change the maths: eligible first home buyers can buy with 5% and no LMI under the First Home Guarantee. MoneySmart (ASIC's consumer site) says the same thing: some lenders accept as little as 5%, while a bigger deposit can help you avoid LMI and shows lenders you can save.

What different deposits look like

For a $700,000 home (deposit only, before any extra costs):

A lender's loan-to-value ratio (LVR) is the loan divided by the property value. Below 80% LVR you're generally LMI-free; above 90% your options narrow and rates often rise.

Genuine savings: the bit people miss

Lenders don't just want a number, they want to see you saved it. This is called genuine savings: money you have accumulated in your own name over time. Typically lenders look for around 5% of the purchase price, held for roughly three months. Under the First Home Guarantee, 5% genuine savings is the standard. Things that usually count: regular savings from your income, term deposits, a long-held share portfolio, and sometimes proof of rent paid on time. Things that often don't count by themselves: cash gifts, one-off windfalls or loans, though a gift can often top up your deposit once you've met the genuine savings test. Different lenders have different rules, so ask early.

The deposit isn't the whole bill

Your deposit sits next to stamp duty (unless exempt), conveyancing, lender fees, inspections, moving costs and LMI if applicable. Many Victorian guides suggest allowing roughly 5–10% of the purchase price on top of the deposit for these costs. We've covered these in our settlement-day blog.

Ways to get in sooner

Checklist: building your deposit

Is a 5% deposit a bad idea?

Not necessarily, but it has trade-offs. You borrow more, pay more interest over the life of the loan, and have less cushion if prices fall or rates rise. Waiting to save 20% can also cost you if prices rise faster than you save. This is a personal decision with no universal answer, which is why a broker or adviser who looks at your numbers is worth the conversation.

A light-hearted reality check

Saving a deposit while paying Melbourne rent is basically a game of financial limbo: how low can your expenses go? Go gently on yourself. Skip the thought of giving up coffee entirely (nobody wants a first home buyer without caffeine), and focus on automating the savings you can actually sustain.

Official links

Disclosure and Disclaimer

This article is general information only and is not financial, credit, legal, tax or investment advice. It does not consider your objectives, financial situation or needs. Examples are illustrations, not quotes, and government schemes, lender policies and legislation change often. Please do your own research and obtain independent advice from a licensed financial adviser, mortgage broker, accountant and conveyancer or solicitor before making any decision. Loan approvals are subject to lender criteria. To the maximum extent permitted by law, our business, its directors, employees and brokers accept no liability for any loss or damage arising from reliance on this article.

Disclaimer: The information in this article is general in nature and does not constitute personal financial or credit advice. Speak with Amber Finance so we can look at your own situation in detail.