Down Payment Calculator

How Much Deposit Do You Need?

The amount of deposit you need depends on the property price and your lender’s requirements. In most cases, lenders require a minimum of 5% to 20% of the property value as a down payment.

• 5%–10% deposit
  Allows you to enter the market sooner, but may require Lender’s Mortgage Insurance (LMI) and result in higher repayments.

• 20% deposit
  Considered the ideal benchmark. It helps you avoid LMI, reduces your loan amount, and can improve your chances of loan approval.

• More than 20%
  A larger deposit can lower your monthly repayments and reduce the total interest you pay over the life of the loan.

Saving a higher deposit can give you more flexibility and better loan options, but it’s also important to balance this with your timeline and financial situation.

What Is LVR (Loan-to-Value Ratio)?

LVR, or Loan-to-Value Ratio, is a key figure lenders use to assess your loan risk. It shows how much you are borrowing compared to the value of the property.

How it works:

LVR = (Loan Amount ÷ Property Value) × 100

Example:

• Property price: $800,000

• Loan amount: $640,000

• LVR = 80%

An 80% LVR is important because it is often the threshold where you can avoid paying LMI.

• Higher LVR (above 80%) = higher risk for lenders

• Lower LVR (below 80%) = better loan terms and lower risk

Understanding your LVR helps you plan your deposit and see how lenders may view your application.

Additional Costs to Consider

Your down payment is only part of the total cost of buying a property. There are several additional expenses you should budget for:

• Stamp duty
  One of the biggest upfront costs, which varies depending on your state and property value.
  👉 You can estimate this using our Stamp Duty Calculator

• Legal and conveyancing fees
  Costs for handling the legal transfer of the property.

• Building and pest inspections
  Optional but recommended to avoid unexpected issues.

• Loan application and lender fees
  Some lenders charge setup or processing fees.

• Moving and setup costs
  Including relocation, utilities, and initial home setup.

Planning for these costs helps you avoid surprises and ensures you have enough savings beyond your deposit.

Example Breakdown

Here’s a simple example to show how your down payment affects your loan:

• Property Price: $800,000

• Down Payment (20%): $160,000

• Estimated Loan Amount: $640,000

If you reduce your deposit to 10% ($80,000):

• Your loan increases to $720,000

• Your LVR becomes 90%

• You may need to pay LMI and have higher repayments

This example shows how even small changes in your deposit can significantly impact your loan size and overall costs.

Frequently asked questions

What is a down payment?

A down payment is the upfront amount you pay when purchasing a property. It is a percentage of the property price, while the remaining amount is covered by your home loan.

How much down payment do I need?

Most lenders require a minimum of 5% to 20% of the property value. A larger deposit can reduce your loan amount and may help you avoid additional costs like lender’s mortgage insurance (LMI).

What happens if my down payment is less than 20%?

If your deposit is below 20%, you may need to pay Lender’s Mortgage Insurance (LMI). This protects the lender, not you, and adds to your overall cost.

Is a bigger down payment better?

In most cases, yes. A larger down payment can:

• Lower your monthly repayments

• Reduce the total interest paid

• Improve your chances of loan approval

However, it’s important to balance this with keeping enough savings for emergencies.

Can I buy a house with a small deposit?

Yes, some lenders allow deposits as low as 5%, and there may be government schemes that help eligible buyers purchase with a smaller deposit.

Does my down payment affect my loan approval?

Yes. Lenders consider your deposit as part of your financial profile. A higher down payment can reduce risk for the lender and improve your chances of approval.

What costs should I consider besides the down payment?

In addition to your deposit, you may need to budget for:

• Stamp duty

• Legal or conveyancing fees

• Loan application fees

• Inspection costs

How does this calculator help me?

This calculator helps you estimate your deposit amount, percentage, and loan size so you can better plan your property purchase and understand your financial commitment.

⚠️ Disclaimer

This calculator provides an estimate only. Actual loan requirements, deposit conditions, and fees may vary depending on the lender, property type, and your financial situation. Always confirm details with a mortgage professional or lender before making decisions.