Sydney property prices mean saving a deposit is one of the biggest hurdles for buyers. But how much do you actually need? The answer depends on your situation, the property price, and whether you want to avoid Lenders Mortgage Insurance. Here's a practical breakdown for 2026.
The Short Answer
You need a minimum of 5% deposit to buy a home in Sydney, but most buyers aim for 10-20% to reduce costs. Here's what the numbers look like:
Deposit Required by Property Price
| Property Price | 5% Deposit | 10% Deposit | 20% Deposit |
|---|---|---|---|
| $700,000 | $35,000 | $70,000 | $140,000 |
| $850,000 | $42,500 | $85,000 | $170,000 |
| $1,000,000 | $50,000 | $100,000 | $200,000 |
| $1,200,000 | $60,000 | $120,000 | $240,000 |
| $1,500,000 | $75,000 | $150,000 | $300,000 |
But Wait - There Are Extra Costs
Your deposit isn't the only upfront cost. You also need to cover:
- Stamp duty: $0 - $40,000+ (first home buyers exempt up to $800k)
- Legal/conveyancing fees: $1,500 - $3,000
- Building & pest inspection: $500 - $800
- Loan application fees: $0 - $600
- Lenders Mortgage Insurance: $0 - $40,000+ (if deposit under 20%)
Total Upfront Costs Example: $900,000 Property
First home buyer (using First Home Guarantee):
- 5% deposit: $45,000
- Stamp duty: $0 (concession applies)
- LMI: $0 (government guarantee)
- Other costs: ~$3,000
- Total needed: ~$48,000
Non-first home buyer (10% deposit):
- 10% deposit: $90,000
- Stamp duty: $35,607
- LMI: ~$18,000
- Other costs: ~$3,000
- Total needed: ~$147,000
What is Lenders Mortgage Insurance (LMI)?
LMI is insurance that protects the lender (not you) if you can't repay your loan. It's required when your deposit is less than 20% of the property value.
LMI Costs in Sydney
LMI is a one-off cost, usually added to your loan. Here's what it typically costs:
| Property Price | LMI with 10% Deposit | LMI with 5% Deposit |
|---|---|---|
| $700,000 | $12,500 | $22,000 |
| $850,000 | $16,000 | $28,000 |
| $1,000,000 | $20,000 | $35,000 |
| $1,200,000 | $25,000 | $44,000 |
Approximate figures only. LMI varies by lender and loan details.
Ways to Buy With a Smaller Deposit
1. First Home Guarantee (5% Deposit, No LMI)
First home buyers can purchase with just 5% deposit and no LMI through the government's First Home Guarantee scheme. The government guarantees up to 15% of the loan.
- Property price cap in Sydney: $900,000
- Income limit: $125,000 (single) or $200,000 (couple)
- 35,000 places available per year
Read more about the First Home Guarantee
2. Family Guarantee (Guarantor Loan)
A family member (usually parents) can use equity in their property to guarantee part of your loan. This can help you:
- Buy with as little as 0-5% of your own savings
- Avoid LMI completely
- Borrow more than you could alone
The guarantor doesn't give you cash - they just provide security. Once you've paid down enough of the loan (usually to 80% LVR), the guarantee can be released.
3. Lenders With Lower LMI
Some lenders have lower LMI costs than others. A few also offer LMI waivers for certain professions (doctors, lawyers, accountants, engineers). We can help find the best option for your situation.
4. Capitalise LMI Into Your Loan
Most lenders let you add LMI to your loan amount rather than paying it upfront. This means you don't need the cash on hand, but you'll pay interest on it over the life of the loan.
Sydney Property Prices: What Can You Actually Buy?
Here's a realistic look at median prices across Sydney (as of early 2026):
Sydney Median Property Prices by Area
| Area | Median House | Median Unit |
|---|---|---|
| The Ponds | $1,350,000 | $680,000 |
| Kellyville | $1,550,000 | $750,000 |
| Marsden Park | $1,050,000 | $620,000 |
| Schofields | $1,100,000 | $640,000 |
| Blacktown | $950,000 | $550,000 |
| Rouse Hill | $1,400,000 | $720,000 |
Median prices are indicative and change regularly.
How to Build Your Deposit Faster
- Set up automatic savings - Treat your deposit savings like a bill
- Use a high-interest savings account - Every bit helps
- Consider the First Home Super Saver Scheme - Save in super with tax benefits
- Reduce discretionary spending - Temporarily cut back on non-essentials
- Pick up extra work - Side income goes straight to deposit
- Look at government grants - First home buyers get $10k FHOG for new homes
The 20% Deposit: Is It Worth Waiting?
Saving 20% avoids LMI, but is it worth the wait? Consider this:
Buy Now vs Wait for 20%
Scenario: $900,000 property, saving $30,000/year
- 10% deposit ($90,000): Ready in 3 years. LMI cost ~$18,000
- 20% deposit ($180,000): Ready in 6 years. No LMI
If property prices grow 5% per year, that $900,000 property becomes $1,140,000 after 6 years. You'd need an even bigger deposit, and you'd have missed out on the capital growth.
Often, getting in sooner (even with LMI) works out better than waiting.
What's Counted as Genuine Savings?
Lenders want to see that you can save money over time. "Genuine savings" typically includes:
- Money saved in your account for 3+ months
- Term deposits
- Shares held for 3+ months
- Equity in existing property
- Gifts from family (with some lenders)
First Home Guarantee participants only need 5% genuine savings, making it easier to qualify.
Ready to Buy?
Find out exactly how much deposit you need and explore your options. We'll show you the fastest path to homeownership based on your situation.
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