Deposit Gap Simulator · Calculators

How much deposit do you actually need?

A 20% deposit of the purchase price is the level at which lenders mortgage insurance stops applying – it has never been a minimum. Buyers routinely purchase with 10% and LMI, with 5% under a government guarantee, or with a family guarantor providing the security instead of cash. You also need more than the deposit itself: transfer duty, conveyancing, building and pest, settlement adjustments and registration all have to come out of the same savings, and something sensible should stay in the account afterwards.

So the useful question isn’t what percentage you need. It’s which route gets you in soonest, at a cost you’d accept – and whether waiting for the biggest deposit is quietly the most expensive option on the list.

Why the 20% target keeps moving

A deposit target is a percentage of a price, so when the price rises, the target rises with it – and the duty payable on that price rises too. That produces the situation most savers eventually recognise: the balance goes up every month, and the finish line goes up as well. If prices are rising faster than your savings close the gap, you can save diligently for two years and be further away than when you started. That distance is your deposit gap, and it’s the thing the chart above is actually measuring.

The rate of growth is doing most of the work in that calculation, and nobody knows what it will be. That’s why the tool gives you three scenarios rather than one forecast. Run all three. If the answer holds up at the higher growth rate, you have a plan; if it only works at the low one, you have a hope.

What waiting actually costs

Waiting has a price, and it’s not just rent. Every month you’re out of the market at a rising price is a month the entry cost climbs – which is the figure the calculator labels the cost of waiting. It’s an estimate built on your chosen growth assumption, not a prediction, and it cuts both ways: if prices fall, waiting pays you. Treat it as the number that tells you how much the timing decision is worth, not as a reason to rush.

The four routes in

Save to 20%. No LMI, the widest lender choice, and the most cash required. Slowest, and most exposed to a moving target.

10% with LMI. Gets you in sooner, and the premium is usually added to the loan rather than paid in cash. Whether it’s worth it depends on what prices do while you’d otherwise be saving – the LMI calculator prices the premium, and what lenders mortgage insurance actually costs explains what you’re buying.

5% under a government guarantee. No LMI, subject to price caps, owner-occupier rules and residence requirements. Caps and eligibility change: the Home Guarantee Scheme explained has the current position.

A family guarantor. A family member’s equity secures part of the loan, so little or no cash deposit is needed. The biggest lever on this page, and the one with real consequences for the guarantor – using a family guarantor to buy sooner covers how it’s structured and unwound.

When saving longer stops being the answer

If the tool shows the gap widening for two years or more, more saving isn’t the fix – the target is outrunning you, and the levers that change it are a different route, a different price point, or a bigger monthly amount. That’s the moment to have the conversation rather than set another savings goal. What lenders will actually approve depends on income, expenses, existing debts and card limits, none of which this tool assesses. The full picture sits on our first home buyer loans page. Once you have a date, the Walk-Away Price Calculator gives you the number you don’t bid past.