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

Buying your first home in Victoria can feel impossible when you’re unsure how much you actually need saved. Many people delay getting started because they assume the number is far higher than it really is. The truth is that the deposit amount depends on your personal situation, the type of loan you choose and whether you qualify for any government support programs designed to help first home buyers.

Below is a clear breakdown of what Victorian buyers need to know.

The Standard Deposit (Without Government Schemes)

Most lenders prefer a 20 percent deposit because it reduces their risk and removes the need for Lenders Mortgage Insurance (LMI). But this is a guideline, not a strict rule. Plenty of buyers successfully borrow with much less.

If you don’t use any government incentives, the most common minimum deposit range is 5 to 10 percent. This may include genuine savings, gifted funds or a mix of both depending on the lender.

Using the First Home Guarantee (As Little as 5 Percent)

The First Home Guarantee (FHG) allows eligible buyers to purchase a home with just a 5 percent deposit without paying LMI. The federal government acts as the guarantor for part of your loan, which reduces lender risk.

For many first home buyers, this is the fastest way to enter the market because it lowers the amount of upfront cash needed.

Eligibility factors include:

• Australian citizenship or permanent residency
• Buying as an owner-occupier
• Price caps based on your region in Victoria
• Loan must be principal and interest

This scheme alone makes home ownership possible far sooner for many buyers.

Using the Victorian First Home Owner Grant (FHOG)

While the First Home Owner Grant doesn’t directly reduce your deposit, it can significantly reduce your upfront costs when building a new home. In Victoria, eligible first home buyers can receive $10,000, which helps offset the cost of building or buying a newly constructed home.

This grant is often used together with a low-deposit loan to create a clear path into the market.

Low Deposit Loans (2–5 Percent Depending on Circumstances)

Some lenders offer genuine low-deposit products, especially for buyers with strong income, stable employment and good credit history. These loans might require:

• 2 percent deposit for specific schemes (like single parents under the Family Home Guarantee)
• 3 to 5 percent for other lender-backed programs

While these options can be helpful, they require careful planning to make sure the repayments fit comfortably within your budget. This is where guided finance planning becomes essential.

What About Lenders Mortgage Insurance (LMI)?

If your deposit is below 20 percent, lenders usually charge LMI. This protects the lender, not the buyer. The cost varies depending on the loan size and the exact deposit amount.

Good news:
Schemes like the First Home Guarantee help buyers avoid LMI entirely, even with a low deposit.

The Real Question: What Can You Afford?

The biggest mistake first home buyers make is focusing on a single number they found online. Your real deposit requirement depends on:

• Income
• Savings
• Existing debt
• Government scheme eligibility
• The type of property you want
• Your long-term financial comfort

Many buyers discover they’re closer to ownership than they believed once their full position is assessed properly.

Tomassi Lanigan’s Approach: Finance First

Before we talk about land or building, we start with your finances. Our team helps you:

• Calculate your borrowing power
• Understand which incentives you qualify for
• Decide whether a 5 percent, 10 percent or higher deposit suits your situation
• Create a plan to move forward safely and confidently

This process removes guesswork and shows you exactly how achievable your first home really is.

So, How Much Do You Need?

For most first home buyers in Victoria, the realistic figure isn’t 20 percent. It’s:

• 5 percent with the First Home Guarantee
• 5–10 percent without grants or schemes
• As low as 2 percent in specific situations
• Plus FHOG if you’re building a new home

The key is getting personalised clarity based on your numbers.

Ready to Find Out Your Real Deposit Goal?

You don’t need to keep guessing.
We can map out your financial position and show you exactly what’s possible—often much sooner than you think.