How much deposit do I need to build a first home?

The deposit is the first thing most people worry about when they think about building a first home, and the good news is that there are low deposit pathways that many buyers do not realise exist. How much you actually need depends on which path you take, so here are the main options as they stand in 2026, along with the costs that sit alongside the deposit.

The deposit depends on the path you choose

There is no single deposit figure for building, because it depends on whether you use a government scheme, a state lender like HomeStart, or a standard loan, and on the value of your land and build. The headline point is that eligible first home buyers usually have access to lower deposit options than the traditional 20 per cent.

The Australian Government 5% Deposit Scheme

For eligible first home buyers, the Australian Government 5% Deposit Scheme lets you buy or build with as little as a 5 per cent deposit, with the Government guaranteeing the gap up to 20 per cent so you avoid Lenders Mortgage Insurance. New builds are covered, including a house and land package, vacant land bought with a separate build contract, and off the plan. For a build, the combined land and build cost needs to sit under your location price cap. The scheme was expanded from 1 October 2025 with uncapped places and no income caps, so it is more widely available than before.

HomeStart for South Australians

If you are building in South Australia, HomeStart, the state government low deposit lender, generally allows you to build with about an 8 per cent deposit, or as little as 5 per cent for eligible graduates, and it charges no Lenders Mortgage Insurance on any loan. It is owner occupied South Australian homes only, but for local first home builders it is one of the lowest deposit routes available.

A standard lender deposit

Without a scheme or a low deposit lender, a standard construction loan follows normal rules: the smaller your deposit, the more likely Lenders Mortgage Insurance applies, and lenders generally look for around a 20 per cent deposit to avoid it. You can often build with less than that, but the LMI cost is the trade off, which is exactly what the schemes above are designed to remove for eligible buyers.

Your deposit is measured against the finished value

Building adds a twist that buying an established home does not have. For a construction loan, the lender values the home on completion, as if it is finished, and works out how much it will lend against that on completion value. So your deposit and your borrowing are assessed on the projected finished value of the land and home together, not just the land as it stands today.

You need more than the deposit

Whatever your deposit, it is not the only cash you need. You also have to allow for upfront costs such as stamp duty, though eligible first home buyers building new often pay reduced or no duty on the land, plus site costs, council and professional fees, and inspections. Thinking of your minimum as the deposit plus a sensible allowance for these costs keeps you from being caught short.

Grants can reduce what you need to save

Your deposit does not have to come from savings alone. Eligible first home buyers building a new home can often put the First Home Owner Grant toward their deposit and upfront costs, which lowers the amount you personally need to have saved. For a build the grant is generally paid at a construction milestone rather than upfront, so the timing matters in your planning.

Genuine savings still matter

A low deposit does not mean no checks on how you got there. Lenders generally want to see a history of genuine savings built up over time, because steady saving shows you can manage repayments. So while the deposit hurdle can be low, the saving habit behind it still counts in your application.

How a broker helps work out your number

Because the deposit depends on the path, and because scheme eligibility and lender policies vary, working out your real number is where a broker earns their keep. A broker can tell you which low deposit options you qualify for, how the on completion valuation affects your figure, and what you will need in total, usually at no cost to you because the lender pays the broker on settlement.