Deposit planning
The right deposit target depends on the property price, your loan structure and the cash you need to keep aside for the purchase.
A 20% deposit means borrowing 80% of the property value, commonly described as an 80% loan-to-value ratio (LVR). This may avoid lenders mortgage insurance and can give you more lender options. It is a benchmark, not a rule: many lenders consider loans above 80% LVR.
Depending on eligibility and lender policy, a buyer may purchase with a smaller deposit. The trade-off can include lenders mortgage insurance, a higher interest rate or stricter evidence of genuine savings. Eligible buyers may also explore current government support schemes, noting that rules, places and property price caps can change.
Keep a separate allowance for stamp duty where payable, transfer and registration fees, conveyancing, inspections, loan establishment costs and moving. A modest cash buffer after settlement can also make the first months of ownership less stressful.
For a $800,000 purchase, a 20% deposit is $160,000 and the loan is $640,000 before fees. With a 10% deposit, the loan is $720,000 and additional costs such as lenders mortgage insurance may apply. The property valuation used by the lender can also affect the final LVR.