This is the question that confronts many homebuyers: How much do you need to deposit for a house in Melbourne? The answer depends on what you mean by “deposit”.
Your buyer’s cash contribution may be 5%, 10%, 15% or 20% of the property value, depending on your lender and personal circumstances. Your contract deposit is the amount payable under the Contract of Sale, commonly 10% in Victoria, although this can sometimes be negotiated.
These amounts are not necessarily the same. The contract deposit forms part of your settlement funds, while you also need to budget for stamp duty, government fees, legal fees, inspections and other upfront costs.
Deposit Funds vs Funds Required at Settlement
Buyer’s cash contribution: The money you contribute towards the purchase price for your home loan and finance position.
Contract deposit: The amount payable under the Contract of Sale when you purchase the property. In Victoria, this is commonly 10%, although it can sometimes be negotiated.
The contract deposit forms part of your settlement funds. Other upfront costs include stamp duty, legal fees, government fees and inspections.
- Most homebuyers aim for a 20% deposit (buyer’s cash contribution), resulting in an 80% loan-to-value ratio (LVR). This typically lets you avoid paying lenders’ mortgage insurance.
- Many buyers successfully purchase with a smaller buyer’s cash contribution of 5-15%, particularly first-home buyers accessing schemes such as the Home Guarantee Scheme or the Australian Government 5% Deposit Scheme.
- Alongside your buyer’s cash contribution, you also need money for stamp duty, government fees, legal fees, building inspections, and moving costs.
- Though Victorian first-home buyers may qualify for stamp duty concessions or exemptions on qualifying purchases, reducing total upfront costs, this doesn’t change the minimum deposit that your lender requires.
- The “right” home loan deposit depends on your property price target, personal circumstances, risk tolerance and purchase urgency.
Buyer’s Advocate can help you set a realistic purchase budget, assess property value, and negotiate once your finance is confirmed.
How Much Buyer's Cash Contribution You May Need: The Short Answer
A 20% buyer’s cash contribution results in an 80% loan-to-value ratio (LVR).
Here’s what it looks like at common Melbourne price points:
| Property Price | 5% Buyer Contribution | 10% Buyer Contribution | 20% Buyer Contribution |
| $700,000 | $35,000 | $70,000 | $140,000 |
| $900,000 | $45,000 | $90,000 | $180,000 |
| $1,200,000 | $60,000 | $120,000 | $240,000 |
A bigger buyer’s cash contribution generally means a smaller loan amount. A smaller contribution may mean a higher LVR, higher loan repayments and LMI, depending on the lender and your circumstances.
General Information Only: This article does not constitute financial, lending, legal or tax advice. Buyer’s Advocate does not provide these services. Confirm your deposit requirements, borrowing power and legal obligations with your lender, mortgage broker, conveyancer or other relevant adviser before purchasing property.
Is 20% Really Necessary?
A 20% buyer’s cash contribution results in an 80% LVR. At this level, borrowers can generally avoid LMI, subject to lender requirements.
Reaching 20% has advantages:
- You avoid paying LMI
- You gain flexibility if rates rise
Many home buyers proceed with a 5-15% buyer’s cash contribution using government schemes or other lending arrangements. Factors that influence deposit requirements include the region, the mortgage type, and your financial situation.
Buying With a 5%, 10%, 15% or 20% Buyer’s Cash Contribution
Different buyer’s cash contributions suit different buyers depending on timeframe and risk profile. Buyer’s cash contributions can vary based on house prices in different regions, and some lenders may require a deposit as high as 30-40% for higher-risk properties.
| Buyer’s Contribution | Typical LVR | Likely Implications | May Suit |
| 5% | 95% | LMI waived only under a government scheme or with a participating lender; highest loan repayments; tightest cash buffer | First home buyers using the 5% Deposit Scheme; eligible single parents may qualify for a 2% deposit under the Family Home Guarantee |
| 10% | 90% | A 10% deposit is common but often requires LMI; moderate repayments | First home buyers and some investors balancing savings time against cost |
| 15% | 85% | Lower LMI premiums than 5-10%; slightly better rates from some lenders | Established professionals, upgraders with equity |
| 20%+ | 80% or less | Lower LVR; generally no LMI; larger cash contribution | Buyers who can reach this level without excessive delay |
Buyer's Cash Contribution versus Total Upfront Costs in Melbourne
Buyers must also budget for their buyer’s cash contribution, stamp duty, government fees, legal and inspection costs, and a contingency buffer.
- Buyer’s cash contribution: 5-20% of purchase price
- Stamp duty: a significant upfront cost when buying a home; varies by property value and buyer status in Victoria
- Mortgage registration and transfer fees: government fees typically several hundred to low thousands
- Lender application/settlement fees: application fees may be charged by lenders for processing loans
- Legal/conveyancing fees: legal fees for conveyancing are necessary when purchasing property; typically $2,000-$3,500
- Building and pest inspection: building inspections can be a valuable upfront cost to avoid future repairs; expect $400-$1,200
- Strata/OC report: for apartments and townhouses
- Moving and immediate repairs: several thousand dollars depending on distance and condition
Here’s an example:
$900,000 family home (non-first-home buyer, 20% buyer’s cash contribution)
| Cost Category | Approximate Amount |
| Buyer’s cash contribution (20%) | $180,000 |
| Stamp duty | ~$49,000 |
| Government fees | ~$1,500 |
| Legal, inspections, moving | ~$7,000-$10,000 |
| Indicative Total Upfront Cash | ~$237,500-$240,500 |
Buyer’s Advocate helps clients establish a realistic property budget before searching for suitable properties. For a detailed breakdown of buying costs, see our separate guide.
Victorian First-Home Buyer Considerations
First-home buyers face rising prices and fierce auction competition. Government-backed first-home programs often require lower deposits than standard mortgages.
Key Victorian supports include:
- First Home Owner Grant: The First-Home Owner Grant provides $10,000 for eligible new homes valued at $750,000 or less.
- Stamp duty concessions: First-home buyers may qualify for stamp duty concessions; full exemption on properties up to $600,000 and a sliding concession between $600,001-$750,000.
- Government schemes: Eligible first-home buyers can access the 5% Deposit Scheme with a participating lender, avoiding LMI. Eligible single parents may qualify for a 2% deposit under the Family Home Guarantee via the Home Guarantee Scheme. The Help to Buy Scheme contributes up to 40% for new homes under shared equity arrangements.
Worked Purchase Examples
Scenario 1: $650,000 first-home-buyer apartment, 10% buyer’s cash contribution
| Item | Estimate |
| Home loan deposit/buyer contribution | $65,000 |
| Stamp duty (FHB concession applies) | ~$5,000–$10,000 |
| Legal, inspections, government fees | ~$5,000–$7,000 |
| Total upfront cash | ~$75,000–$82,000 |
Scenario 2: $1,100,000 established family home, 20% buyer’s cash contribution (upgrader)
| Item | Estimate |
| Home loan deposit/buyer contribution | $220,000 |
| Stamp duty (no concession) | ~$61,000 |
| Legal, inspections, moving, fees | ~$8,000-$12,000 |
| Total upfront cash | ~$289,000-$293,000 |
Scenario 3: $750,000 investment property, 15% buyer’s cash contribution
| Item | Estimate |
| Home loan deposit/buyer contribution | $112,500 |
| Stamp duty (no concession) | ~$42,000 |
| Legal, inspections, moving, fees | ~$5,000-$8,000 |
| Total Upfront Cash | ~$159,500-$162,500 |
Investors do not usually receive first-home-buyer concessions. Lenders assess borrowing capacity based on income and existing debts, so investment loan serviceability may be tighter.
Buyer’s Advocate can help you set a realistic property price ceiling before making offers or bidding at auction.
How to Build a Deposit Faster Without Weakening Your Buying Position
Don’t commit your entire savings to your deposit if it leaves you without enough money for due diligence, settlement costs or unexpected property expenses. Keeping a financial buffer can help protect your buying position if issues arise before or after settlement.
- Set up a designated house deposit savings account and consider a high-interest account.
- Automate transfers to your savings account for consistency.
- Create a savings plan that includes your deposit, upfront costs and a contingency buffer.
- Speak with a mortgage broker before making changes to your credit products or home loan application strategy.
Buyer’s Advocate can work alongside your broker once an approximate savings trajectory and deposit target are set.
When to Speak With a Broker, Conveyancer and Buyer's Advocate
- Mortgage broker or lender. Confirm borrowing power, minimum deposit, access to government schemes and your total loan structure before making offers.
- Victorian conveyancer or property lawyer. Review contracts of sale and Section 32 statements, check title restrictions, advise on special conditions, and manage settlement including stamp duty, transfer and mortgage registration.
- Buyer’s advocate. A buyer’s advocate like our firm helps clarify a realistic budget covering deposit and non-deposit costs, identifies suitable suburbs, conducts due diligence, and negotiates or bids at auction.
FAQs
Can I use a gift from my family as part of my buyer's cash contribution?
Yes, many home loan lenders accept a non-repayable family gift as part of your home loan deposit, but they usually still want to see some genuine savings history in your own name.
Do I still need a buyer’s cash contribution if I have a guarantor?
If you have a guarantor, they can help reduce the buyer’s cash contribution required because equity in the guarantor’s property helps meet the lender’s security requirements. However, most buyers still contribute some deposit and must pass normal serviceability tests.
Is my contract deposit refundable if a property purchase falls through?
It depends on the circumstances and the terms of the Contract of Sale. If a purchase ends under a valid contractual right, such as an applicable cooling-off or finance clause, the contract deposit may be returned. If the buyer defaults outside their contractual rights, some or all of the contract deposit may be at risk.
Next Steps: Plan Your Deposit and Buying Strategy
After learning how much you need to deposit for a house in Melbourne, take the next step towards securing your home. Start by confirming your borrowing power and deposit options with a qualified mortgage broker, then speak with a Victorian conveyancer about legal and stamp duty implications.
Whether you’re a first-home buyer, upgrader or investor, book a consultation with Buyer’s Advocate in Melbourne to map out your budget, suburb and property selection, due diligence, negotiation and auction-bidding strategy.