You can buy in Sydney with less than 20 per cent. There are four ways in, and they cost very different amounts.
Yes. The four ways in are the Australian Government 5% Deposit Scheme, lenders mortgage insurance at 5 to 10 per cent, a family guarantee, and a gifted deposit.
Eligible first home buyers using the scheme pay no mortgage insurance up to the $1.5 million Sydney cap; outside it, the insurance premium is the main cost to weigh.
Part of the first home buyer loans guide.
1. The Australian Government 5% Deposit Scheme The government guarantees the gap between your deposit and 20 per cent, so the lender treats the loan as fully secured and there is no lenders mortgage insurance to pay.
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No LMI: an estimated $22,800 premium avoided (a broad guide; real premiums vary by lender and loan).
Stamp duty: $0 for eligible NSW first home buyers (saves $30,187).
Indicative only. The deposit excludes stamp duty, legal and inspection costs, and a participating lender, not this calculator, confirms 5% Deposit Scheme eligibility.
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The government guarantees the gap between your deposit and 20 per cent, so the lender treats the loan as fully secured and there is no lenders mortgage insurance to pay.
Since 1 October 2025 there are no income caps and unlimited places, and the price cap is $1.5 million in Sydney and the NSW regional centres (Newcastle, Lake Macquarie, the Illawarra, the Central Coast, Coffs Harbour–Grafton, the Mid North Coast and Richmond–Tweed), and $800,000 in the rest of New South Wales.
The deposit is not the only cash you need. Transfer duty where it applies, conveyancing, building and pest or strata inspections, a mortgage registration fee, council and water adjustments and moving costs all come out of the same savings.
For eligible NSW first home buyers, no transfer duty is payable up to $800,000, with a concession to $1 million, which removes the single largest of those costs. Check the duty at your price, then model the whole cash requirement.
Identification, recent payslips and usually a year-to-date figure, three to six months of bank statements covering your savings and everyday spending, statements for any existing debts, and details of credit card limits, personal loans, car loans, buy-now-pay-later accounts and HECS-HELP.
If a gift is involved, a signed letter from the giver confirming it is a gift and not repayable. If a guarantee is involved, your guarantor's own identification, property details and a certificate of independent legal advice.
Work out which of the four routes is cheapest for your situation, which often is not the one people assume. Check eligibility for the schemes properly rather than by rule of thumb.
Match you to a lender whose maximum loan-to-value ratio, genuine savings policy and property rules all fit before an application goes anywhere near a credit file.
And say so plainly if the straight answer is that waiting six months puts you in a materially better position. Start with the first home buyer guide.
A lender's risk is the gap between what it lends and what the property would fetch in a forced sale. At 80 per cent of the value, that gap is comfortable.
Above it, the lender wants protection, and there are only a few ways to provide it: an insurance policy you pay for, a government guarantee, or someone else's property standing behind part of the loan.
If you have little or nothing saved, buying with no deposit sets out what is actually possible.
Everything below is a different answer to the same question. None of them change how much you can borrow, which is set by your income and your existing debts. They change what you need in the bank to get started.
True no-deposit lending is rare, but a family guarantee can substitute for a cash deposit entirely, and a documented gift can supply it. Purchase costs still need covering, so the practical question is the total cash position, which the cost calculator shows.
Five per cent is the practical floor for most buyers: a 5% deposit home loan through the Australian Government 5% Deposit Scheme if you are eligible, or with lenders mortgage insurance if you are not.
Not always: it protects the lender, not you, but if saving another 15 per cent would take three years while prices move, the premium can be the cheaper outcome.
Genuine savings are funds you have accumulated yourself over time, usually three to six months, rather than a lump sum that appeared recently. Lenders use it as evidence you can set money aside consistently, which is a reasonable proxy for being able to meet repayments.
Often yes, though the details depend on the lender and on the current scheme rules. A gift can supply part or all of the deposit while the government guarantee removes the need for insurance.
A small deposit is usually one of several questions on a first home buyer’s list, and our first home buyer FAQ answers many of the others.
Five questions and you will know where your deposit sits and which of the four options is worth pursuing. No credit check, nothing saved.
Three recorded Links files. Identities removed, figures rounded as recorded.
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Official sources for the figures on this page: Housing Australia, Australian Government 5% Deposit Scheme · Moneysmart (ASIC), lenders mortgage insurance. Scheme rules change; the official pages are the final word. Checked against these sources on 12 October 2026.
