Low deposit Low deposit home loans for good incomes
If you earn well and can manage the repayments, the deposit is usually what’s in the way. Twenty per cent is one option, not a rule. These are the ways in with less, who each one suits, and the catch on each.
Key takeaways
- Under the 5% Deposit Scheme, eligible buyers can buy with 5%, or 2% for single parents, with no income cap.
- Help to Buy starts at 2%, with the government taking a share, under income caps of $103,000 single and $165,000 joint.
- A family guarantee can cover the whole gap, with a family member’s property securing part of the loan.
- On an $850,000 Sydney home, a 5% deposit cuts the cash needed from about $179,797 to $52,297 for an eligible first home buyer.
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Saving 20% first
- Deposit
- $170,000
- Stamp duty
- $9,797
5% Deposit Scheme
- Deposit
- $42,500
- Stamp duty
- $9,797
Illustrative. Eligible first home buyer, established home, NSW first home duty concession. Excludes lender, legal and other costs. A smaller deposit means a bigger loan and higher repayments.
Who can get a low deposit home loan?
Most low deposit options are built for people buying a home to live in. You’re a strong fit if most of these are true:
- Your income comfortably covers the repayments on the bigger loan.
- You’re buying a home to live in, not an investment.
- You haven’t owned property in Australia for 10 years, or never have.
- You’re an Australian citizen or permanent resident.
- Your credit file is clean, and your card limits are modest.
- The price sits under your state’s scheme cap.
If you’ve owned before, see starting again. If you’re self-employed, the deposit works the same way, but how lenders read your income matters more. See self-employed home loans.
What does a low deposit really cost?
The deposit is only part of the cash you need. Your real number is the deposit, plus stamp duty, plus fees, for your state and your price.
On an $850,000 home in Sydney, a 5% deposit means a loan of $807,500 instead of $680,000 with 20%. At an illustrative 6% over 30 years, that’s $4,841 a month instead of $4,077, about $764 more. That’s the trade: less cash now, more repayment for longer.
Illustrative rate only, not a quote or a comparison rate. Principal and interest, 30 years.
Whether that trade is worth it depends on how long saving the extra $127,500 would take, and what you’d pay in rent meanwhile. 5% vs 20%: the numbers sets it out.
What are my options for a low deposit?
Every way in, with the catch on each. I check them in this order, government schemes first. Eligibility applies to every one.
| Way in | Deposit from | Who it suits | The catch |
|---|---|---|---|
| 5% Deposit Scheme | 5%, or 2% for single parents | First home buyers, or 10 years since owning. No income cap | Price caps, participating lenders only, and you must live in it |
| Help to Buy | 2% | Citizens under the income caps: $103,000 single, $165,000 joint | The government owns a share, up to 30% for an existing home or 40% for a new home, and its share moves with the property’s value |
| Family guarantee | Possibly nothing | Buyers whose family has equity and is willing to help | The guarantor’s property is at risk for the guaranteed part until it’s released |
| Profession policy | Commonly 10% | Eligible professions, such as accountants and medical professionals | Membership and income rules vary by lender |
| Deposit funded separately | Less than 5% in cash | Buyers whose cash covers the costs but not the deposit | A separate deposit loan at a higher rate, and a one-off premium |
| Standard loan above 80% | Varies by lender | Anyone who doesn’t fit the options above | Lenders mortgage insurance, usually added to the loan |
General information about each option. Scheme rules checked against the government’s information guides dated 1 July 2026. See a real example of a deposit-funded purchase.
When should I wait instead?
Sometimes the better answer is a few months. I’ll say so if:
- Your cash covers the deposit but not the stamp duty and fees, and a few months would close the gap.
- Paying off or cancelling a card would lift what you could borrow.
- You’ve just started a new job and are still on probation.
- You’re self-employed and your next tax return is close, and it would show a higher income.
- The repayment on the bigger loan would leave no room for a rate rise.
If waiting is the better answer, you’ll leave with the number to aim for and the date it’s likely to be reached.
Low deposit, by situation
- First home buyers: the schemes, the price caps and stamp duty concessions.
- Owned before? The 10-year rule may still let you in.
- After a separation: the single parent option and buying out a former partner.
- Accountants: profession policies and the memberships lenders recognise.
- Self-employed: the same deposit options, with income read from your returns.
How I work The Pace Plan
The same three steps, whichever door you came through.
- Step 1
Get your real number
The deposit, the stamp duty and the fees for your state and price.
- Step 2
See every way in
Government schemes first, and the catch on each, in writing.
- Step 3
Set your pace
Choose the option and the timeline, then pre-approval, offer and settlement, timed to your lease, with a plan to pay it off.
Schemes first, every time. I tell you the catch. If waiting is the better answer, I'll say so.
FAQ Questions clients ask
What is the smallest deposit I can buy a home with?
For eligible single parents, 2% under the 5% Deposit Scheme. Help to Buy also starts at 2%, under income caps. With a family guarantee, some lenders lend the full price plus costs, because a family member’s property secures part of the loan.
Can I get a low deposit home loan on a high income?
Yes. The 5% Deposit Scheme has had no income cap since 1 October 2025, so a high income doesn’t rule you out. Price caps still apply, $1.5 million in Sydney. Help to Buy is the scheme with income caps.
Do I pay lenders mortgage insurance with a low deposit?
Not under the 5% Deposit Scheme while you meet its rules, and not with a family guarantee that covers the gap. Some lenders may also waive it for eligible professions. Outside those, a deposit under 20% usually means lenders mortgage insurance.
Can my parents help with the deposit?
Yes, in two main ways. They can gift money, which most lenders accept with a signed gift letter, or they can guarantee part of your loan with their own property. A guarantee puts their property at risk for that part, so they should get their own advice.
Do I need genuine savings?
Some lenders want part of the deposit saved by you over a few months, called genuine savings. Others accept a gift, an inheritance or a steady rental history instead. It’s one of the places lenders differ.
Is a low deposit a bad idea?
Not by itself, but it has a cost. A smaller deposit means a bigger loan, higher repayments and more interest over time, and less room if prices fall. On an $850,000 home, a 5% deposit means repayments about $764 a month higher than with 20%, at an illustrative 6%.
Can I use a low deposit to buy an investment?
Not through the government schemes, which are for homes you live in. Lenders have their own investment policies, and using equity in a home you own is often how investors buy with little cash. See investment loans.
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