Home loan guide
You can get into the market with less than 20% deposit today!
Buying a property in Queensland comes down to how much you can save, and also to when, how, and under what conditions your deposit is paid. Whether you’re buying at auction, off-the-plan, or through private sale, different rules apply for refunds, timing, and legal protection.
This guide, written by an expert mortgage broker in Brisbane, covers not only how much deposit you’ll need in 2025, but also what happens to that money once it’s paid.
Let’s dive in.
This is the first question that many first-home buyers ask us. It should be straightforward to work out… but often isn’t.
While you might have read that some banks will do 95% loans, lots of people assume this means you only need a 5% deposit. That’s a common mistake for first home buyers. There are other costs that need to be factored in there, so you actually need closer to an 8% deposit.
When buying an existing home in Queensland, you will not receive the $30,000 first home owners grant, so you will need a little bit more in savings. Let’s look at some examples. Figures are correct as at 30 September 2025.
House Deposit Required | Bank Jargon | Who Qualifies for This? | Example on $800,000 Purchase in QLD |
8 to 10% of the purchase price | Maximum LVR 95%Includes LMI: 92% Loan + 3% LMI = 95% | Most first-home buyers with a regular jobCan be an existing homeYou must live in it | Loan: $736,000LMI: $24,000 (approx.)Total Loan: $760,000Deposit needed to cover transfer duty & other settlement costs: $64,000 |
7 to 9% of the purchase price | Maximum LVR 97%Includes LMI: 94% Loan + 3% LMI = 97% | Strict criteria: perfect credit & savings history, 2+ years stable employmentCan be an existing homeYou must live in it | Loan: $752,000LMI: $28,000 (approx.)Total Loan: $780,000Deposit needed to cover transfer duty & other settlement costs: $52,000 |
What if you are buying a brand new first home and qualify for the Queensland First Home Owners Grant?
Let’s go through an example together, with figures based on buying a home in 2025.
House Deposit Required | Bank Jargon | Who Qualifies for This? | Example on $800,000 Purchase with $30,000 First Home Owners Grant |
6 to 7% of the purchase price | Maximum LVR 95%Includes LMI: 92% Loan + 3% LMI = 95% | Most first-home buyers with a regular jobMust be buying a brand new property or building a new homeMeet First Home Owners Grant criteria | Loan: $736,000LMI: $24,000 (approx.)Total Loan: $760,000Plus $30,000 First Home Owners GrantDeposit needed to cover transfer duty & other settlement costs: $16,000 |
4 to 5% of the purchase price | Maximum LVR 97%Includes LMI: 94% Loan + 3% LMI = 97% | Very strict criteria: perfect credit history & 2+ years stable employmentMust be buying a brand new property or building a new homeMeet First Home Owners Grant criteria | Loan: $768,000LMI: $28,000 (approx.)Total Loan: $796,000Plus $30,000 First Home Owners GrantDeposit needed to cover transfer duty & other settlement costs: None |
No deposit loans are possible, but there are limited options. Some of the options include:
The best way to get a no-deposit home loan is to set up a guarantor to secure your loan.
This is a great way to help speed up getting into the property market.
A guarantor is a family member who uses their house or investment property as security against your new home loan. For the property to be used, it must have sufficient equity.
The bank will take security over a section of their property (the percentage they approve) in place of your deposit. Having a guarantor will allow you to borrow up to 105% of the purchase price.
You need to be over 18 years old to apply for a guarantor home loan.
Once you’ve built up enough equity, the guarantee can come off. Here’s how removing a guarantor from a mortgage works.
While you are allowed to borrow over 100% of the purchase price with a guarantor home loan, in some cases, lenders will still want to see at least 5% of the purchase price in genuine savings. Genuine savings is money you have on the side to prove that you have some fallback money.
The good news is, if you don’t have genuine savings but have been faithfully paying rent, this can also be used as genuine savings!
You can talk to us today about which lenders will not require genuine savings.
A Guarantor is most commonly used for first home buyers, and most backs will only allow this.
However, some lenders will allow second-home buyers to get a guarantor. However, the expectation is that they should already have a strong financial base in order to buy a second property. That said, some lenders are willing to review cases where the borrower has been sick or has been through a divorce.
Even with a guarantor, your borrowing capacity will still be reviewed and approved in the same way as if you were getting a regular loan. Your current income will be looked at, as well as any debt, credit carbs and liabilities that you have. As a general rule, banks will lend you around 5 to 6 times your income. So if you are earning $50,000, you might be able to borrow up to $300,000.
Read More: Guarantor Home Loans ultimate guide.
Read More: Use the Deposit Calculator
Understanding when you need to pay your deposit can prevent stressful surprises during your home-buying journey. Whether you’re buying through a private treaty or bidding at auction, the payment timing will vary.
The deposit is usually paid at one of three stages:
If you’re wondering how much for a house deposit at each stage, it’s normally between 5% and 10% of the purchase price. Some sellers may request a fixed flat amount instead of a percentage. Always confirm before signing anything.
In private treaty sales, agents often request a holding deposit to show good faith. This is usually $1,000 to $2,000 and is fully refundable if negotiations fall through.
Once contracts are signed, you’ll need to pay the remaining balance of the full deposit. Make sure you have funds ready to go. Delays can breach the contract.
Most sellers will accept:
Cash payments are rarely accepted due to compliance rules, so make sure your transfer limits are cleared before settlement day.
Your deposit won’t go directly to the seller. Instead, it will be held safely in:
This protects you in case the contract is terminated under valid conditions.
Not all property purchases follow the same deposit rules. The timing, refund options and conditions depend on how you buy. Here’s a quick comparison:
Sale Type | Typical Deposit | When Paid | Refundable? | Special Conditions |
Auction | 5 to 10% on the day | Immediately after the hammer falls | No cooling-off period | Must be unconditional. Finance cannot be added later |
Private Treaty | 5 to 10% paid in 2 stages | Small holding deposit on offer, balance after cooling-off | Yes, if a finance clause is in place | Terms are negotiable with agent or seller |
Off-the-Plan | 10% | On contract signing | Usually refundable only if builder defaults | Deposit is held longer, often in solicitor or stakeholder trust |
Unfortunately, these days a 5% deposit won’t cut the mustard. As we mentioned earlier, you’ll need a minimum of 8% in savings unless you’re buying a brand-new place.
Here are a few practical examples:
Deposit / House Price | $800,000 | $850,000 | $900,000 | $950,000 | $1,000,000 |
7% Deposit | $56,000 | $59,500 | $63,000 | $66,500 | $70,000 |
8% Deposit | $64,000 | $68,000 | $72,000 | $76,000 | $80,000 |
9% Deposit | $72,000 | $76,500 | $81,000 | $85,500 | $90,000 |
10% Deposit | $80,000 | $85,000 | $90,000 | $95,000 | $100,000 |
You can play around with our deposit calculator to see how your deposit translates to your home price and monthly payment.
The First Home Guarantee allows eligible first-home buyers to purchase a property with as little as 5% deposit.
Even with the First Home Guarantee, buyers must cover additional upfront costs, including:
For most Queensland homes, this means you still need around 8% in savings to cover these extra costs. By combining your savings with the First Home Guarantee, you can secure your first home without waiting to save a full 20% deposit.
Read more: First home guarantee scheme
The amount of income you need to minimise your deposit depends on the size of the loan you’re taking out.
If you’re sitting at a 95% loan-to-value ratio, you’ll find that lenders are much more conservative when they assess your income.
In this case, a higher income will help you get across the line and make it easier.
Income | $60,000 | $70,000 | $90,000 | $100,000 | $150,000 |
Min Loan Amount | $330,000 | $385,000 | $495,000 | $550,000 | $825,000 |
Max Loan Amount | $390,000 | $455,000 | $585,000 | $650,000 | $975,000 |
Check to see if you are eligible for a home loan
Lenders Mortgage Insurance (LMI) is protection for the lender in case a borrower can’t repay their loan. It is important always to remember that LMI protects the lender, not you. So, for example, if you lose your income, LMI will not help you with repayments. If a borrower has a low deposit of anything under 20%, most lenders will require them to pay LMIWhy?
These borrowers fall into a higher-risk category and, as a result, can create more complications for lenders should they default on their loan repayments.
Does a deposit for building a house differ from buying one?
When building a home, you’d need to get a construction loan which differs from a standard home loan. A construction loan is paid off in stages.
However, the deposit still works in the same way, and a minimum deposit between 5 to 8% is required. You’ll need to work out the cost of the land and the build to budget accordingly and take out the right size loan.
In Queensland, first-home buyers who are building a house will also be eligible for the First Home Owners grant.
The deposit amount will be confirmed, and from there, your solicitor or conveyancer will finalise the contract with the progress payments.
Remember that your loan will need to include extra costs like legal fees and stamp duty that you may not have factored in.
The First Home Buyers Grant in Queensland can be used as all or part of your deposit for brand new properties, buying off the plan or significant renovations that have substantially changed the property.
It is best not to rely solely on this and consider it as more of a bonus. Why? Because the grant will be paid at different times, depending on the type of property that you’re buying or building. So it might not be in your account in time to use as a deposit.
The property you are buying must be brand new or being built and valued at under $750,000 (land included). New dwellings include houses, units, duplexes, townhouses, and a granny flat that has not yet been occupied as a place of residence.
The grant may be used for homes that have undergone substantial renovations or homes that have been moved onto a new site but are not yet occupied, like kit homes.
You must move into the new home within one year of settlement and live there continuously for six months.
You are also unable to rent out a room until you’ve lived in the property for at least a year. So if you were relying on rental income from other tenants, park that thought for a little while.
Read More: First Home Owners Grant QLD
At what point you need to pay LMI is determined by your lender. (Remember, it’s insurance that protects the banks).
Sometimes, the cost will be paid as a lump sum upfront, while other lenders will allow it to be added to your home loan. In the case of the latter, you will pay interest on the LMI too.
As a guide for a $500,000 home loan that you’ve saved a $50,000 deposit on, LMI could cost over $10,000. Your loan-to-value ratio will be examined, and the higher your loan is, the more LMI you will have to pay.
If you choose to refinance in the coming years, unfortunately, LMI is not transferable. So if your loan-to-value ratio is still higher than 80%, you may need to pay LMI again with your new lender.
Understanding how a lender calculates LMI and being aware of estimated costs is essential so that you can weigh what to do.
Many first-home buyers contemplate whether it is best to wait until they have a higher deposit or to buy earlier and pay LMI. Which option is better?
The simple answer is that it comes down to your personal goals. Would you prefer to get into the property market sooner or wait and be more financially secure?
There’s no single answer because it depends on your goals and requirements.
Buying a home with a low deposit can feel challenging, but it’s not impossible. With careful planning, the right strategy, and guidance from a mortgage broker QLD, you can increase your chances of approval. Here’s how to make it work:
When buying a property, the main question is: should I put in a larger or smaller deposit? Is it better to wait and get the 20% deposit, or should you try and get in with a smaller deposit of 10,9 or 8 per cent? There are pros and cons to both strategies.
Pros:
Cons:
Let’s move on to the pros and cons of having a larger deposit. Now, when we say larger deposit, we mean more than a 20% deposit.
Pros:
Cons:
Would you like to learn about your situation?
Whether you can recover your deposit depends on how the contract was signed and why it was terminated. Queensland has specific rules that protect buyers in some cases, but not all.
For most private treaty contracts, buyers receive a 5-business-day cooling-off period.
During this time, you can withdraw for any reason, but the seller may withhold a penalty of up to 0.25% of the purchase price. The remaining balance of your deposit is refunded.
Example: On an $800,000 home, the maximum penalty is $2,000.
However, cooling-off rights do not apply if you buy at auction or waive your rights in writing.
Most contracts in Queensland include a finance clause. This allows you to cancel the contract if your loan is declined, provided you notify the seller before the finance due date.
If you meet the deadline and can prove your finance was rejected, your full deposit is usually refunded.
When buying property in Queensland at auction, the rules change completely. There is:
Once the hammer falls, your deposit is locked in and non-refundable. This is why a fully assessed pre-approval is critical before bidding.
You may lose part or all of your deposit if:
Always speak with your solicitor or mortgage broker before signing. One clause can decide whether your deposit is refundable or gone for good.
Here’s how this goes wrong. This is a worked example, not a client file.
A first home buyer in Brisbane wins an $800k townhouse at auction. He has what he thinks is a pre-approval from his bank, so he bids with confidence.
It was only a system-generated estimate. No credit assessor had checked his income, debts or expenses.
Queensland auction contracts are unconditional, with no cooling-off period. He pays a 10% deposit of $80k on the day and still has stamp duty and legal fees to cover. Then the bank declines his loan.
When the bank finally assessed his application after the auction:
The contract was unconditional, so he had no way out, and his $80k deposit was at risk.
If he had come to us before the auction, we would have:
Not every pre-approval is the same. An automated estimate is worth nothing once the hammer falls. Only bid with a fully assessed pre-approval, and let our team get it for you first.
Read More: What is a home loan pre approval?
Our team at Hunter Galloway is here to help you buy a home in Australia. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
Before settlement, check when and how to pay your house deposit.
