By Steve Chin - June 2026 - 6 min read
You do not need 20% to buy a home
The 20% deposit benchmark is the point at which you avoid paying Lenders Mortgage Insurance (LMI). But it is not a requirement to buy. In fact, most first home buyers in Australia purchase with less than 20% - and there are several ways to do it.
Your low deposit options
- 1.5% deposit with a government guarantee - the First Home Guarantee allows eligible buyers to purchase with 5% deposit and no LMI. The government guarantees the difference between your deposit and 20%. Places are unlimited (from 1 October 2025)
- 2.2% deposit (single parents) - the Single Parent Stream allows single parents to buy with as little as 2% deposit and no LMI. This applies to both first home buyers and previous homeowners who are single parents
- 3.5% deposit with LMI - if you do not qualify for a guarantee scheme, most lenders will approve a loan at 95% LVR with LMI. The LMI cost is added to your loan. On a $500,000 purchase with 5% deposit, LMI is typically $8,000-$12,000
- 4.Guarantor loan (zero deposit) - a family member (usually a parent) offers their property as additional security. You can borrow up to 100% of the purchase price plus costs with no LMI. The guarantor does not give you money - they just provide security
- 5.Profession-specific LMI waivers - some lenders waive LMI entirely for certain professions (doctors, lawyers, accountants, engineers) even at 90% LVR. If you are in an eligible profession, this can save you thousands
The real cost of waiting to save more
Adelaide's median house price has been rising by roughly 8-12% per year recently. On a $600,000 property, that is $48,000-$72,000 per year in price growth. If it takes you two more years to save from 5% to 20%, the property may have increased by more than the LMI you would have paid.
This is not a reason to rush into something you cannot afford. But it is a reason to run the numbers properly rather than assuming you need 20% before you can act.
Lendology checks every guarantee scheme, LMI waiver, and guarantor option across our full panel. Book a free chat and we will find the cheapest path to ownership for your specific deposit and income.
Frequently asked questions
Can I buy a house with no deposit?
In limited circumstances, yes. If you have a family member willing to act as guarantor, some lenders will approve a loan with zero deposit from you - the guarantor's property provides the security the lender needs. Without a guarantor, a minimum of 2-5% is typically required depending on the scheme you use.
What is LMI and how much does it cost?
Lenders Mortgage Insurance protects the lender if you default on a loan where you have less than 20% deposit. It is a one-off premium added to your loan, ranging from a few thousand dollars on a small loan to $15,000-$30,000 or more on larger loans. The exact cost depends on the loan amount, LVR, and lender. Government guarantee schemes let you avoid LMI entirely with as little as 5% deposit.
Is it worth waiting to save 20%?
Not necessarily. In a rising market, the amount you save on LMI by waiting may be less than the price increase on the property. Buying now with 5% and paying LMI can still be cheaper than buying later at a higher price with 20% deposit. Lendology can model both scenarios using actual Adelaide market data.
Have a question about your situation?
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