Do You Really Need a 20% Deposit to Buy Your First Home?
One of the most common reasons first home buyers delay buying is the belief that they must save a 20% deposit before they can even start. While having a larger deposit can be helpful, it’s not always required. Understanding how deposits actually work can completely change how — and when — you buy your first home.
Where the 20% Deposit Myth Comes From
The idea of a 20% deposit comes from avoiding lender’s mortgage insurance (LMI).
While avoiding LMI can reduce costs, it’s not a requirement to buy a home — it’s a choice.
You Can Buy With Less Than 20%
Many first home buyers purchase with deposits well below 20%.
Depending on the lender and your situation, options may exist with 5%, 10%, or 15% deposits.
What Lender’s Mortgage Insurance Actually Is
LMI is a one-off cost that protects the lender, not the borrower.
For many buyers, paying LMI allows them to buy sooner rather than spending years saving a larger deposit.
First Home Buyer Schemes Can Reduce Your Deposit
Government schemes may allow eligible buyers to purchase with a lower deposit without paying LMI.
Understanding which schemes apply to you can significantly reduce your upfront costs.
Why Waiting for 20% Can Cost You More
Property prices and rent often rise while buyers wait to save a larger deposit.
In some cases, buying earlier — even with LMI — can be financially beneficial long term.
It’s Not Just About the Deposit Amount
Lenders assess more than just how much you’ve saved.
Your income, employment, expenses, and credit history all play a role in approval.
Every Buyer’s Situation Is Different
There is no “one-size-fits-all” deposit amount.
What works for one buyer may not be right for another, which is why personalised guidance matters.
How Chase Helps First Home Buyers Navigate Deposits
Chase helps first home buyers understand their deposit options without pressure.
This includes explaining trade-offs, grants, and lender requirements clearly.
Unsure How Much Deposit You Really Need?
If you’re not sure what deposit makes sense for your situation, a simple conversation can help clarify your options.
Book a first home buyer deposit review with Chase
Final Thoughts
You don’t need to reach an arbitrary deposit number before exploring your options. Understanding how deposits really work can help you move forward with confidence instead of waiting unnecessarily.
