How Much Deposit Do You Really Need to Buy a Home in Adelaide?

“How much deposit do I need?” is the question we hear most from Adelaide buyers — and the honest answer is: it depends on what you want to avoid paying, and what support you're eligible for. Here's a clear walk-through of the 20% benchmark, what a smaller deposit really costs, and the upfront expenses people forget.

The 20% benchmark, and why it exists

You'll often hear that you need a 20% deposit. That figure isn't a legal minimum — it's the point at which most lenders stop charging you Lenders Mortgage Insurance(LMI). With a 20% deposit you're borrowing 80% of the property's value, which lenders treat as a comfortable level of risk.

So when people say “you need 20%,” what they usually mean is “20% is how you avoid LMI.” You can very often buy with less — it just changes the cost and the options, which is what the rest of this guide covers.

What LMI is — and what it costs

This trips a lot of people up, so it's worth being precise. As ASIC's MoneySmart explains, Lenders Mortgage Insurance protects the lender, not you. It's a one-off cost that applies when you borrow more than 80% of the property's value — in other words, when your deposit is under 20%.

• LMI is usually a one-off cost, payable when your loan-to-value ratio (LVR) is above 80%.
• It can sometimes be added to the loan ('capitalised') rather than paid upfront — convenient, but you then pay interest on it.
• The cost generally rises as your deposit shrinks, because the lender is taking on more risk.

Low-deposit and guarantee options

A 20% deposit is out of reach for many first home buyers, and there are legitimate ways to buy with less:

• Many lenders accept deposits from around 5%, typically with LMI applied.
• Eligible first home buyers may use the federal First Home Guarantee to buy with as little as a 5% deposit without paying LMI — the government guarantees part of the loan instead. From 1 October 2025, place limits and income caps for the scheme were removed.
• A family guarantor can sometimes use equity in their own property to support your loan, helping you avoid LMI — though this carries real responsibility for the guarantor.

South Australian first home buyers should also look at the First Home Owner Grant and stamp duty relief, which we cover in our guide to SA grants and stamp duty. These don't change the deposit percentage a lender requires, but they can ease the overall cash you need to get to settlement.

What counts as your deposit

Not all money is treated the same way by lenders. Many lenders, especially for loans with a smaller deposit, want to see part of your deposit as genuine savings— money you've accumulated and held over time, rather than a lump sum that appeared last week. Common sources lenders consider include:

• Savings built up in your own account over several months.
• Equity in another property you own.
• A first-home grant, where you're eligible.
• A gift from family — though lenders usually want this evidenced, and some treat gifts differently from genuine savings.

If you're relying on a gift or a recent windfall, it's worth checking the lender's policy early, because it can affect how much you can borrow and which lenders will say yes. This is another area where talking to a broker before you're under contract saves stress later.

The costs beyond the deposit

The deposit is the headline number, but it isn't the only cash you'll need. Plan for:

• Stamp duty, where it applies — though eligible first home buyers in South Australia may qualify for relief.
• Conveyancing or legal fees to handle the transfer.
• Building and pest inspections before you commit.
• Loan establishment or application fees, and possibly a valuation.
• Moving costs, and a buffer for the unexpected.

MoneySmart's guide to saving for a house deposit is a good companion here — it walks through setting a target and a savings plan.

Why a bigger deposit still helps

Even when you can buy with a small deposit, a larger one generally means:

1. 1Lower repayments, because you're borrowing less.
2. 2Less interest paid over the life of the loan.
3. 3Avoiding or reducing LMI.
4. 4More lenders and products to choose from, because a lower LVR widens your options.

It's a balance: saving longer for a bigger deposit versus buying sooner with a smaller one. The right answer is personal, and it's exactly the trade-off a broker can model with you.

Working out your number

A good starting point is to estimate the property price you're aiming for, then look at both the 20% figure and a low-deposit scenario so you can see the difference in repayments and costs. Our repayment calculator helps you model this, and our first home buyers page explains how we guide buyers from deposit to keys.

If you'd like a clear, no-pressure picture of what deposit makes sense for your situation in Adelaide, book a chatand we'll talk it through.