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Property & Mortgages
How much deposit do you need to buy a house in NSW or Western Sydney?
The standard answer is 20% — that's the threshold to avoid Lenders Mortgage Insurance (LMI). But in practice, many Australians buy with 5–10% using LMI or government schemes. In NSW, first home buyers also have access to stamp duty concessions and grants that can significantly reduce the upfront cash required.
The 20% benchmark — and why it exists
Lenders require a minimum deposit, but the key threshold is 20% of the property's purchase price. Borrow more than 80% (a loan-to-value ratio above 80%) and most lenders require you to pay Lenders Mortgage Insurance.
LMI protects the lender, not you. It covers their loss if you default and the property sells for less than the loan balance. It does not give you any benefit — it's purely a cost of borrowing with a small deposit.
What does a 20% deposit look like in Western Sydney?
Property prices vary significantly across Western Sydney. As a rough illustration:
| Median house price (approx.) | 20% deposit | 10% deposit | 5% deposit |
|---|---|---|---|
| $700,000 | $140,000 | $70,000 | $35,000 |
| $850,000 | $170,000 | $85,000 | $42,500 |
| $1,000,000 | $200,000 | $100,000 | $50,000 |
| $1,200,000 | $240,000 | $120,000 | $60,000 |
Note: your deposit is not all you need. You also need funds for stamp duty (unless exempt), conveyancing, building and pest inspection, and moving costs. Budget an additional 3–5% of the purchase price for these upfront costs.
Can I buy with less than 20%?
Yes. Most major lenders will lend with as little as a 5% deposit, but you will pay LMI. On a $700,000 home with a 10% deposit ($70,000), LMI can cost $10,000–$20,000 depending on the lender and your loan amount — and it is typically capitalised onto your loan.
Some lenders (particularly smaller banks and credit unions) offer 95% loans with no LMI if you have a guarantor — usually a family member who offers equity in their own home as additional security.
What is the First Home Guarantee?
The federal government's First Home Guarantee (part of the Home Guarantee Scheme) allows eligible first home buyers to purchase with a 5% deposit and no LMI. The government guarantees the remaining 15% of the deposit, so the lender treats it as an 80% LVR loan.
Key eligibility criteria for 2025–26:
- Australian citizen or permanent resident who are at least 18 years of age
- First home buyer (or have not owned property in Australia in the last 10 years under the Regional First Home Buyer Guarantee)
- Income thresholds apply: singles up to $125,000 and couples up to $200,000 in taxable income
- Property price caps apply: $1,500,000 for Sydney and major regional centres, $800,000 for other areas of NSW
- Places are limited each financial year — apply through a participating lender
What is the NSW First Home Owner Grant?
NSW offers a $10,000 First Home Owner Grant (FHOG) for eligible first home buyers who purchase or build a new home.
To be eligible:
- The home must be new (newly built, substantially renovated, or off-the-plan)
- The purchase price must not exceed $600,000 for a new home, or $750,000 for a house and land package
- You must be an Australian citizen or permanent resident
- You must move in within 12 months and live there for at least 12 months
Given Western Sydney property prices, many buyers will exceed the $600,000 threshold for existing new stock, but house-and-land packages in growth corridors (Penrith, Campbelltown, Oran Park, Jordan Springs) may still qualify under the $750,000 cap.
Do first home buyers in NSW pay stamp duty?
First home buyers in NSW may qualify for stamp duty exemptions or concessions under the First Home Buyer Assistance Scheme (FHBAS):
- No stamp duty on homes up to $800,000
- Concessional stamp duty on homes between $800,000 and $1,000,000
- Full stamp duty applies above $1,000,000
For vacant land, different thresholds apply: full exemption on land valued at $350,000 or less, a concessional rate between $350,001 and $450,000, and full transfer duty above $450,000.
Minimum deposit (5% via First Home Guarantee): $37,500
Stamp duty: $0 (under $800,000 FHBAS exemption)
First Home Owner Grant: $10,000 (if eligible new home)
Upfront costs (conveyancing, inspections, etc.): ~$5,000–$10,000
This is illustrative only. Verify all figures and eligibility before acting.
What other costs do I need to budget for?
- Conveyancing / solicitor fees: $1,500 – $3,000
- Building and pest inspection: $400 – $700
- Mortgage registration and transfer fees: NSW LRS charges $182.73 (incl. GST) for a transfer by way of discharge of mortgage (2026–27 fee schedule)
- Home and contents insurance: required at settlement
- Lenders' application fees: vary by lender, sometimes waived
- Moving costs: $500 – $3,000+
What about saving for a deposit while renting?
The federal government's First Home Super Saver Scheme (FHSS) allows you to make voluntary contributions to your super fund and later withdraw them (plus associated earnings) to use as a house deposit — with tax advantages.
You can contribute up to $15,000 per financial year and withdraw a maximum of $50,000 across all years per person ($100,000 for couples). Contributions must be voluntary (not compulsory employer SG), and the scheme has strict eligibility criteria.
Want to map out what buying looks like for you?
Deposit size, grants, stamp duty, schemes — it all interacts differently depending on your income, savings, and the suburb you're targeting. That's what we're building Zyloz for: giving you a clear picture of your options so you can move forward with confidence.
