One of the most common questions from first-time property investors is: how much deposit do I actually need? The short answer is 20% is the benchmark, but in practice many investors successfully buy with less — and some use equity from existing properties instead of cash. This guide covers every deposit scenario for 2026 Australian property investors.
The Standard: 20% Deposit
The standard deposit for an investment property in Australia is 20% of the purchase price. On a $650,000 property, that is $130,000. With a 20% deposit you avoid Lenders Mortgage Insurance (LMI), access better interest rates, and have a lower loan-to-value ratio (LVR) which reduces your financial risk. Most major banks and lenders offer the most competitive investment loan rates at 80% LVR or below.
Can I Buy with Less Than 20%?
Yes — but with costs. If you have a 10% deposit (90% LVR), lenders will require LMI. On a $600,000 loan, LMI can cost $12,000–$22,000 depending on the lender and LVR. This is typically capitalised into the loan, so you don’t pay it upfront, but it adds to your debt and interest costs over the life of the loan. Some investors accept LMI as a cost of entry to get into the market sooner — particularly if they believe the capital growth over the next 2–3 years will exceed the LMI cost. Some smaller lenders will lend up to 95% LVR for investment properties, though rates are higher and not all properties or locations qualify (units in high-density postcodes are often excluded).
Deposit Scenarios — $650,000 Investment Property
The 20% deposit benchmark applies per property. Investors using equity from an existing home may be able to access 80% LVR without new cash savings — speak to a mortgage broker to model your specific position.
Using Equity Instead of Cash
Many experienced investors use equity from their primary residence or existing investment properties instead of saving fresh cash. If your home is worth $900,000 and you owe $450,000, you have $450,000 in equity. A lender will typically allow you to access up to 80% of the property’s value — in this case $720,000. Subtract your existing debt of $450,000 and you have $270,000 of usable equity. This can be drawn down as a line of credit or equity release loan and used as a deposit on an investment property. Using equity is not free money — it increases your total debt and interest obligations — but it allows investors to buy without waiting years to save cash. Always model the impact on your overall cash flow before proceeding.
Additional Costs Beyond the Deposit
The deposit is just part of your upfront cash requirement. Budget additionally for: stamp duty (varies by state, typically $18,000–$55,000 on a $600,000–$1,000,000 property), conveyancing ($1,500–$2,500), building and pest inspection ($400–$800), loan application fees ($0–$1,000 depending on lender), and a cash buffer for initial vacancy and maintenance. A realistic upfront budget for a $650,000 investment property is $150,000–$180,000 total (deposit + costs) in a typical state, or less if you are using equity or buying in a lower-stamp-duty jurisdiction.
Deposit requirements are not fixed — they depend on your lender, your existing assets, and your strategy. A good mortgage broker can model every scenario and find the path that gets you into the market with the least unnecessary cost.
One Property at a time
Brick by Brick 🧱
General Advice Warning: This article is general in nature and does not constitute personal financial advice. Please consult a licensed financial adviser before making investment decisions.
