How Much Deposit Do You Need for a First Home in Victoria

The three most common deposit targets

Your exact savings target depends on your household income, your eligibility for government support, the type of property you want, and whether you are buying a brand-new build or an established home. Generally speaking, most buyers map out their savings goals around three distinct entry tiers.

The 20% deposit benchmark

A 20% deposit remains the gold standard of real estate. When you contribute a fifth of the purchase price upfront, you instantly bypass the requirement for Lenders Mortgage Insurance (LMI), a costly premium that protects the lender, not you, if you default on your loan.

Borrowing less means your monthly mortgage repayments will be lower, and banks will typically reward your low-risk status with access to their sharpest available interest rates.

On a $700,000 property, a 20% deposit translates to $140,000 in cash. While starting your home-buying journey with that much equity puts you in a highly secure position, amassing six figures is a big ask. When rent, energy bills, and everyday lifestyle expenses continue to climb, chasing a 20% target can feel like running toward a finish line that keeps moving backwards.

For some buyers with stable living situations or parental support, it works beautifully. For many others, waiting to save 20% simply isn’t the most practical way anymore.

The 5% deposit fast-track

This is where the market has shifted dramatically. Under the federal government’s 5% Deposit Scheme (incorporating the Federal Government’s First Home Guarantee), eligible first home buyers who have never owned property before, or who haven’t owned a home in Australia in the last 10 years, can secure a home with a fraction of the traditional deposit. Instead of saving for years to hit that 20% mark, the government steps in to act as your guarantor for the remaining 15%, allowing you to completely skip the cost of Lenders Mortgage Insurance.

On that same $700,000 property, your upfront deposit requirement drops from $140,000 down to just $35,000. This strategy is highly effective for Victorian first-home buyers who earn a stable income capable of comfortably servicing a mortgage, but whose immediate cash reserves are still growing. Because this scheme is designed exclusively to help new buyers break into the market, it cannot be used for investment properties or by current homeowners looking to upgrade.

If property values are rising steadily in your target suburb, entering the market early as a first-home buyer allows you to start with a 5% deposit, to start building equity through capital growth rather than watching the market outpace your savings.

The 2% deposit for priority support pathways

For a select group of buyers, there is an even lower entry point designed to provide targeted structural support. The Family Home Guarantee enables eligible single parents or legal guardians to purchase a home with a deposit of just 2%.

On a $700,000 purchase, this means you only need to bring $14,000 to the table, with the government guaranteeing the rest of the traditional deposit. While this scheme has strict criteria and is reserved for specific family structures, it is a highly impactful pathway that completely rewrites what is possible for single-parent households looking for long-term security.

Stamp duty savings in Victoria

When planning a property budget, it’s easy to focus entirely on the bank deposit. However, upfront purchasing costs don’t stop there. Fortunately, the Victorian State Government provides some of the country’s most generous concessions to help first-home buyers keep their hard-earned cash in their pockets.

Stamp Duty Savings

Stamp duty is a state tax levied on property purchases, and it can easily add tens of thousands of dollars to your upfront costs. To ease this burden, Victoria offers a complete stamp duty exemption for eligible first-home buyers purchasing properties valued up to $600,000.

If your purchase price falls between $600,001 and $750,000, a sliding-scale concession applies, meaning you pay a heavily reduced rate rather than full freight.

Additionally, the government has extended off-the-plan stamp duty concessions until late 2026 for apartments, units, and townhouses, allowing you to pay tax only on the value of the underlying land rather than the finished building.

The $10,000 First Home Owner Grant (FHOG)

If you decide to buy or build a brand-new property rather than an established one, you may qualify for the Victorian First Home Owner Grant, which injects a tax-free $10,000 payment into your transaction.

The beauty of this grant is how it interacts with your bank loan. Most lenders will allow you to count that $10,000 grant directly toward your required funds at settlement. For example, if your 5% deposit goal is $35,000, receiving the FHOG can effectively reduce the personal savings you need to contribute yourself, bringing your move-in date forward significantly.

The Help to Buy alternative

If a standard mortgage still feels out of reach even at a 5% deposit, there is another federal pathway worth keeping on your radar: the Help to Buy shared equity scheme. Rather than simply acting as a guarantor to lower your deposit requirements, the government acts as a co-investor. They contribute up to 40% of the purchase price for a new home, or 30% for an established property.

This model allows you to buy with a 2% deposit while drastically reducing your overall loan size and ongoing monthly repayments, as you don’t pay interest on the government’s equity share.

The trade-off is that the government owns a proportional stake in your home, which you will need to buy back over time or pay out when you eventually sell the property. For buyers with a lower borrowing capacity, this equity boost can be the exact key needed to unlock homeownership.

Don’t forget the buying buffer

No matter which deposit percentage you target, it is vital to remember that buying a property involves immediate, non-deposit administrative expenses. To ensure you can move in comfortably without stretching your finances to the absolute breaking point, you need to account for a buying buffer to cover these essential costs:

• Conveyancing and Legal Fees: $1,500 – $2,500 to handle legal property transfers.
• Building and Pest Inspections: $500 – $800 to ensure your new home is structurally sound.
• Mortgage Registration and Government Transfer Fees: ~$1,000.
• Moving Truck and Utility Connection Costs: $1,000+.
• Immediate Post-Settlement Repairs or Essential Furnishings: Variable.

How much is truly enough?

When you add up the deposit, the government concessions, and the necessary safety buffers, a realistic cash savings target for most Victorian first-home buyers sits between $45,000 and $55,000. This amount comfortably covers a 5% deposit on a mid-range metropolitan home, takes care of any lingering concessional stamp duty, and leaves you with enough breathing room to handle legal fees and moving day.

If you are specifically targeting regional areas or properties priced under $600,000 where stamp duty drops to zero, your all-inclusive savings pathway can look as accessible as $30,000 to $40,000.

Ultimately, buying your first home isn’t about hitting an arbitrary 20% number. It is about assessing the available support schemes, understanding your local market, and choosing the specific pathway that gets you through the front door sooner without compromising your financial peace of mind.