How Much Deposit Do You Really Need to Buy Your First Home in Sydney?

Ask most Sydneysiders how much deposit a first home needs and they will say 20%. On Sydney prices, that number stops people before they start. The honest answer: many first home buyers purchase with far less.

Buying with 5%

Under the Australian Government’s 5% deposit scheme, eligible first home buyers can purchase with a 5% deposit and pay no lenders mortgage insurance, because the government guarantees part of the loan. Since October 2025 there are no income caps, and the price cap for Sydney sits at $1.5 million. On a $750,000 home, that is a $37,500 deposit instead of $150,000.

Buying with 10–19%

More lenders, sharper pricing, and if the guarantee does not fit, lenders mortgage insurance applies, usually smaller than people expect and often added to the loan rather than paid in cash.

The 20% position

No LMI and every lender’s best pricing. Family gifts, a guarantor arrangement or the First Home Super Saver Scheme can close the gap faster than saving alone.

Don’t forget buying costs

Eligible NSW first home buyers pay no stamp duty up to $800,000 and a concession to $1 million. Budget for conveyancing, inspections and lender fees on top, usually a few thousand dollars.

The right deposit strategy depends on your price range and timing. That is exactly what a free borrowing assessment works out.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.