Quick answer: most first home buyers need the deposit plus 1% to 5% of the price in savings. With the 5% Deposit Scheme, an eligible first home buyer of an $800,000 Sydney apartment needs about $44,000: a $40,000 deposit, $0 stamp duty and around $4,000 of other costs. A 20% deposit on the same home means saving about $164,000. Keep a buffer of one to three months’ repayments on top.
“How much do I need to save?” is the first question almost every first home buyer asks us, and the honest answer is: less than most people think, if you use the schemes available, and more than the deposit alone. Here is how to work out your number, with examples for every state.
The four parts of your savings target
- The deposit. 5% with the 5% Deposit Scheme, 10% to 15% with lenders mortgage insurance (LMI), or 20% to avoid LMI without the scheme.
- Stamp duty. Often $0 for first home buyers under each state’s limit, but not always: Tasmania and the NT charge first home buyers full duty on established homes, and South Australia only exempts new homes.
- Other upfront costs. Conveyancing or legal fees (often $1,500 to $2,500), building and pest or strata reports ($400 to $700), government fees to register the transfer and mortgage, and any lender fees. Allow about $3,000 to $5,000 in total.
- A buffer. One to three months of repayments set aside, ideally in an offset account, so a broken hot-water system on day one doesn’t go on a credit card.
How much to save in each state
These examples assume an eligible first home buyer using the 5% Deposit Scheme, with $4,000 allowed for other costs. Prices are illustrative, not medians. Stamp duty is worked out on each state’s rules as at October 2026.
| State | Example purchase | 5% deposit | Stamp duty | Other costs | Total savings |
|---|---|---|---|---|---|
| NSW | Sydney apartment, $800,000 | $40,000 | $0 | $4,000 | $44,000 |
| VIC | Melbourne house or townhouse, $650,000 | $32,500 | $11,357 | $4,000 | $47,857 |
| QLD | Brisbane townhouse (established), $700,000 | $35,000 | $0 | $4,000 | $39,000 |
| WA | Perth house, $650,000 | $32,500 | $8,075 | $4,000 | $44,575 |
| SA | Adelaide new home, $650,000 | $32,500 | $0 | $4,000 | $36,500 |
| SA | Adelaide established home, $650,000 | $32,500 | $29,580 | $4,000 | $66,080 |
| ACT | Canberra apartment or townhouse, $650,000 | $32,500 | $0 | $4,000 | $36,500 |
| TAS | Hobart house, $600,000 | $30,000 | $22,498 | $4,000 | $56,498 |
| NT | Darwin house (established), $550,000 | $27,500 | $27,225 | $4,000 | $58,725 |
The gaps between states are mostly stamp duty. In Queensland and the ACT a first home buyer can pay $0 at these prices; in Tasmania and the NT, duty on an established home adds $22,000 to $27,000. In South Australia, choosing a new home over an established one at the same price saves $29,580. Our buying costs calculator works out your own figure for any price and state.
5%, 10% or 20%: what each costs on an $800,000 home
| Deposit | Savings needed | Loan | LMI | Monthly repayment* |
|---|---|---|---|---|
| 5% with the 5% Deposit Scheme | $44,000 | $760,000 | None | $4,779 |
| 10% without the scheme | $84,000 | $720,000 | About $14,400 (usually added to the loan) | $4,618 |
| 20% | $164,000 | $640,000 | None | $4,024 |
*Principal and interest over 30 years at 6.45%, an illustrative owner-occupier rate after the September 2026 RBA rise. LMI is a rough guide at about 2% of the loan; quotes vary by lender. See LMI explained.
The 5% route gets you in with $120,000 less in savings than waiting for 20%. The trade-off is a bigger loan: about $755 a month more in repayments than with a 20% deposit. If you qualify for the scheme, a 10% deposit with LMI rarely makes sense, because you pay for insurance the scheme would have removed.
How long it takes to save
| Target | At $1,500 a month | At $2,000 a month | At $3,000 a month |
|---|---|---|---|
| $44,000 (5% deposit + costs, $800k) | 29 months | 22 months | 15 months |
| $84,000 (10% deposit + costs) | 56 months | 42 months | 28 months |
| $164,000 (20% deposit + costs) | 109 months (9 years) | 82 months (6.8 years) | 55 months (4.6 years) |
Interest on your savings shortens these a little, and rent rises or price growth can lengthen them. That’s why many buyers who qualify choose the 5% Deposit Scheme rather than waiting years for 20%.
What lenders look for in your savings
- Genuine savings: many lenders want to see at least 5% of the price saved by you over about three months or more, rather than a recent lump sum. Gifts from family are often fine with a signed gift letter, but policies vary.
- Steady saving history: regular deposits into savings help show you can afford the repayments, especially if the new repayment is higher than your rent.
- Grants: the First Home Owner Grant is for new homes only and is usually paid at settlement. Some lenders count it towards the deposit; others don’t.
- Debts and limits: credit card limits reduce borrowing power even if you pay them off each month. Closing unused cards before applying can help.
Ways to need less
- Use every scheme you qualify for. The 5% Deposit Scheme, your state’s stamp duty exemption and, for a new home, the First Home Owner Grant. They stack.
- Consider new rather than established in South Australia, Queensland and the NT, where the duty savings and grants are much bigger on new homes.
- A family guarantee lets a parent use equity in their home instead of you saving a bigger deposit. See guarantor home loans.
- Stay under the limits. In NSW, buying at $800,000 instead of $850,000 saves about $9,800 in duty for a first home buyer; in Victoria the concession ends at $750,000.
Avoid the common traps in 10 first home buyer mistakes, and get pre-approval before you start bidding.
How much to save for a first home: common questions
How much do I need to save for a first home?
Usually the deposit plus 1% to 5% of the price. With the 5% Deposit Scheme, an eligible first home buyer of an $800,000 Sydney apartment needs about $44,000: a $40,000 deposit, $0 stamp duty and around $4,000 of other costs. In states where first home buyers still pay some duty, the total is higher.
Can I buy a home with a 5% deposit?
Yes. Under the Australian Government 5% Deposit Scheme, eligible first home buyers can buy with a 5% deposit and no lenders mortgage insurance, up to price caps such as $1.5 million in Sydney and $950,000 in Melbourne. There are no income caps since October 2025.
What costs do I need on top of the deposit?
Stamp duty (often $0 for first home buyers under the state limits), conveyancing or legal fees, building and pest or strata reports, government fees to register the transfer and mortgage, and any lender fees. Outside stamp duty, allow about $3,000 to $5,000, plus a cash buffer.
Does the First Home Owner Grant count towards my deposit?
It depends on the lender. The grant is for new homes only and is usually paid at settlement. Some lenders let it count towards the deposit, while others want the deposit from your own genuine savings. We check before you sign.
Is it better to save a 20% deposit?
Not always. On an $800,000 home, 20% means saving about $164,000 including costs, against about $44,000 with the 5% Deposit Scheme. Saving the extra $120,000 at $2,000 a month takes about five years, and prices can move in that time. A bigger deposit does lower repayments, by about $755 a month in this example.
How long does it take to save for a first home?
At $2,000 a month, about 22 months to save $44,000 (a 5% deposit plus costs on an $800,000 Sydney apartment), or nearly 7 years to save $164,000 for a 20% deposit. Saving $3,000 a month cuts those to about 15 months and 4.5 years.
Your exact number
Every buyer’s figure is different: the state, the price, new or established, and which schemes you qualify for all change it. We work out your exact savings target, and which lender will accept your savings history, in a free 15-minute chat.