How Much Deposit Do You Really Need to Buy a Home in NSW? Here’s What You Should Know

Posted on 04 Dec 2025

If you’re dreaming about buying a home but feeling unsure about how much deposit you actually need you’re not alone. It’s one of the most common questions we hear from buyers on the Central Coast, from first-timers all the way to seasoned investors. And the truth is, understanding your deposit options is one of the smartest steps you can take before entering the market.

Let’s break it down in a simple, stress-free way so you can plan with clarity and confidence.

1. The 20% Deposit: Why It’s Considered the Sweet Spot

A 20% deposit has long been the gold standard in Australian real estate.
Why? Because it gives buyers the strongest financial position.

For example, if you’re looking at a $500,000 home, a 20% deposit equals $100,000 upfront. While this can feel like a big hurdle, there are some solid benefits:

You avoid Lenders Mortgage Insurance (LMI) — a fee charged when your deposit is under 20%.
You typically access better interest rates and more flexible loan options.
You start out with more equity in your home from day one.

If you can reach the 20% mark, fantastic it’s a powerful way to enter the market. But if not? You still have great options.

2. Smaller Deposits Are Absolutely Possible

The idea of saving six figures stops many buyers in their tracks, but here’s the good news:
You don’t always need 20%.

Many lenders offer loans with as little as 5% deposit. On a $500,000 property, that’s just $25,000 upfront a far more achievable starting point.

There are a couple of things to keep in mind:

A smaller deposit usually means paying LMI, which protects the lender.
Your loan amount will be slightly higher, which affects repayments.

But for many buyers, this trade-off is worth it because it gets you into the market sooner especially in areas where prices are rising.

3. Government Programs Can Reduce Your Deposit Even Further

If you’re an eligible first-home buyer, you may be able to access assistance that makes the path to homeownership even smoother.

A few programs to explore:

First Home Owner Grant (FHOG)
First Home Loan Deposit Scheme (FHLDS)
Other state and federal incentives designed to help you buy sooner

These initiatives can reduce the deposit required, minimise added costs, and help you step into your first home faster than you may have thought possible.

4. Your Deposit Isn’t the Only Cost to Plan For

While the deposit is the big one, there are a few additional expenses every buyer should prepare for:

Stamp duty (unless exempt)
Building and pest inspections
Solicitor or conveyancing fees
Loan application costs

These often-overlooked items can catch buyers off guard, so it’s worth building them into your budget early.

Feeling Overwhelmed? You’re Not Alone and We’re Here to Help

Buying a home is a huge milestone, and it’s completely normal to feel unsure about where to start. Whether you're a first-home buyer taking your very first step, an upgrader searching for more space, a downsizer seeking low-maintenance living, or an investor building your portfolio, understanding your deposit options is key.

And you don’t have to figure it out on your own.

As trusted Central Coast real estate agents, we’re here to walk you through the process from explaining deposit requirements to helping you connect with the right lenders and uncover any government programs you may qualify for.

Ready to Take the Next Step?

If you’re thinking about buying, let’s chat.
We’ll help you get clear on your budget, understand your options, and move forward with confidence.

Get in touch today for personalised guidance your next home could be closer than you think.