Is a 15% Deposit Enough to Buy a House? The Smart Deposit Strategy
Yes, 15% is enough to buy a home in Australia — and it may be the smartest deposit level. LMI costs at 85% LVR, how to avoid them & why 15% often beats 20%.
Yes, a 15% deposit is absolutely enough to buy a house in Australia. In fact, for many buyers it’s the smartest deposit level — offering a strong balance between affordability, LMI costs, interest rates, and time to save.
At 15% deposit (85% LVR), Lenders Mortgage Insurance (LMI) still technically applies with most lenders. But here’s what many buyers don’t realise: the LMI at 85% LVR is dramatically cheaper than at 90% or 95%, and in many cases it can be avoided entirely — either through a professional waiver or by choosing a lender that doesn’t charge LMI at this level.
This guide covers everything you need to know about buying with a 15% deposit: LMI costs, how to eliminate them, why 15% is often better than waiting for 20%, and how it compares to lower deposit options.
How Much Is a 15% Deposit?
Your 15% deposit requirement scales with the property price:
| Property Price | 15% Deposit | Loan Amount (85% LVR) |
|---|---|---|
| $400,000 | $60,000 | $340,000 |
| $500,000 | $75,000 | $425,000 |
| $600,000 | $90,000 | $510,000 |
| $750,000 | $112,500 | $637,500 |
| $800,000 | $120,000 | $680,000 |
| $1,000,000 | $150,000 | $850,000 |
| $1,200,000 | $180,000 | $1,020,000 |
On top of the deposit, you’ll need to cover stamp duty (varies by state — first home buyer concessions may apply), conveyancing fees ($1,500–$3,000), building and pest inspections ($500–$800), and other purchase costs.
In total, budget for approximately 18–20% of the property value in available funds when buying with a 15% deposit (15% deposit + 3–5% for additional costs).
LMI Costs at 15% Deposit (85% LVR)
At 85% LVR, LMI is charged by most lenders — but the premiums are significantly lower than at 90% or 95% LVR. This is because the lender’s risk exposure above 80% is relatively small (just 5% of the property value), and the borrower has meaningful equity from day one.
| Property Price | Loan Amount (85%) | Estimated LMI |
|---|---|---|
| $400,000 | $340,000 | ~$2,200 |
| $500,000 | $425,000 | ~$3,000 |
| $600,000 | $510,000 | ~$4,100 |
| $750,000 | $637,500 | ~$5,500 |
| $800,000 | $680,000 | ~$6,200 |
| $1,000,000 | $850,000 | ~$8,500 |
| $1,200,000 | $1,020,000 | ~$10,500 |
Compare these figures to LMI at 90% LVR ($7,500–$20,000) and 95% LVR ($15,000–$45,000). The difference is dramatic. At 85% LVR, LMI is typically 40–60% cheaper than at 90% LVR and 70–85% cheaper than at 95% LVR.
Even if you end up paying LMI at 85% LVR, the cost is manageable — particularly relative to the property price and your total purchase costs. Use our LMI calculator to estimate the exact cost for your scenario.
How to Avoid LMI Entirely at 85% LVR
While LMI at 85% LVR is relatively affordable, why pay it if you don’t have to? There are two main strategies to eliminate it completely:
Strategy 1: Choose a Lender That Waives LMI at 85% LVR
This is something most buyers don’t know: some lenders don’t charge LMI at 85% LVR for any borrower, regardless of profession. These lenders set their LMI threshold at 85% rather than the standard 80%, meaning anyone with a 15% deposit avoids LMI entirely.
This isn’t widely advertised. You typically won’t find it on the lender’s website or in their standard marketing. A mortgage broker who knows which lenders offer this can match you with the right option and save you $2,000–$10,000+ with no trade-offs.
For more detail on 85% LVR no LMI options, see our dedicated page.
Strategy 2: Professional LMI Waiver
If you’re in a qualifying profession, virtually every lender that offers professional LMI waivers will waive at 85% LVR. This is the easiest LVR level to get a waiver because the lender’s risk is minimal — they’re only lending 5% above the standard 80% threshold.
Professions that qualify for LMI waivers at 85% LVR include:
- Medical professionals — doctors, dentists, optometrists, veterinarians, pharmacists, physiotherapists, psychologists, nurses
- Legal professionals — lawyers, barristers, solicitors
- Finance professionals — accountants (CPA/CA), actuaries, financial planners
- Engineers — all major disciplines
- IT professionals — above income thresholds
- Teachers — registered with a state teaching authority
- Other professions — paramedics, police officers, public servants, pilots
At 85% LVR, the range of eligible professions is broader than at 90% or 95% LVR because more lenders are willing to waive at this lower-risk level. Professions that might not qualify for a 90% or 95% LVR waiver (such as nurses, teachers, or IT professionals at some lenders) often qualify at 85%.
Check if your profession qualifies — it takes 60 seconds and there’s no credit check.
Strategy 3: Combination Approach
If you’re a qualifying professional, you have the best of both worlds: you could choose a lender that already waives LMI at 85% for all borrowers (getting the broadest rate selection), or you could use your professional waiver at a lender with better rates that normally charges LMI at 85%. Either way, you pay $0 in LMI.
Why 15% May Be the Smartest Deposit Level
Financial commentators and mortgage experts increasingly recognise 15% as a “sweet spot” deposit level. Here’s why:
1. LMI Is Low (or Zero)
As shown above, LMI at 85% LVR is the lowest tier above 80%. At $3,000–$8,500 for most property prices, it’s often worth paying to get into the market sooner rather than saving another 5% to avoid it. And with a professional waiver or the right lender, it’s zero.
2. Interest Rates Are Strong
Lenders offer much better interest rates at 85% LVR compared to 90% or 95%. The rate premium at 85% is minimal — typically 0.00–0.10% above the 80% LVR rate. Compare this to 90% LVR (0.05–0.15% premium) and 95% LVR (0.10–0.30% premium).
Over a 30-year loan, even a 0.10% rate improvement saves thousands:
| Loan Amount | 0.10% Rate Saving (30 yrs) | 0.20% Rate Saving (30 yrs) |
|---|---|---|
| $500,000 | ~$10,800 | ~$21,600 |
| $750,000 | ~$16,200 | ~$32,400 |
| $1,000,000 | ~$21,600 | ~$43,200 |
3. More Lender Options
At 85% LVR, you have access to a wider range of lenders compared to 90% or 95%. Some lenders don’t lend above 90% LVR at all, and many are more conservative with their credit assessment at higher LVRs. At 85%, nearly every lender is comfortable — giving you more choice and negotiating power.
4. Meaningful Starting Equity
With 15% equity from day one, you have a solid buffer against property price declines. A 10% correction would still leave you with positive equity. Compare this to 5% deposit, where even a 5% decline puts you underwater.
This equity buffer also means:
- You can refinance sooner if a better deal becomes available
- You’re less likely to be trapped in your current loan
- Your LVR drops below 80% faster through repayments and growth, opening up the best rates
5. Faster to Save Than 20%
Saving from 15% to 20% takes additional time that many buyers underestimate:
| Property Price | 15% Deposit | 20% Deposit | Extra Needed | Time to Save Extra (at $2K/month) |
|---|---|---|---|---|
| $750,000 | $112,500 | $150,000 | $37,500 | ~19 months |
| $1,000,000 | $150,000 | $200,000 | $50,000 | ~25 months |
During those 19–25 months:
- Property prices may increase 5–15% (adding $37,500–$150,000 to the price)
- You’re paying rent instead of building equity
- The LMI you’re trying to avoid ($5,000–$8,500 at 85%) may be dwarfed by the price increase
This is the core argument for 15% as the smart stop: the remaining LMI is so small that waiting to eliminate it often costs more in missed growth than the premium itself.
15% vs 10% vs 20% Deposit Comparison
Here’s how the three deposit levels compare on an $800,000 property:
| Feature | 10% Deposit | 15% Deposit | 20% Deposit |
|---|---|---|---|
| Deposit amount | $80,000 | $120,000 | $160,000 |
| Loan amount | $720,000 | $680,000 | $640,000 |
| LVR | 90% | 85% | 80% |
| LMI (without waiver) | ~$15,200 | ~$6,200 | $0 |
| LMI saving vs 10% | — | $9,000 | $15,200 |
| Rate premium | +0.05–0.15% | +0.00–0.10% | None |
| Monthly repayment* | ~$4,680 | ~$4,420 | ~$4,160 |
| Negative equity risk | Moderate | Low | Very low |
| Lender choice | Good | Excellent | Excellent |
| Refinance flexibility | Limited initially | Good | Full |
Approximate repayments at 6.00% p.a. principal and interest over 30 years.
Key takeaway: Moving from 10% to 15% saves approximately $9,000 in LMI, improves your interest rate, reduces your repayments, and significantly lowers your risk — for an additional $40,000 in deposit. Moving from 15% to 20% saves approximately $6,200 in LMI for an additional $40,000 in deposit. The incremental benefit of 15% to 20% is smaller than 10% to 15%.
When 15% Deposit Is the Right Move
A 15% deposit is typically the best strategy when:
You’ve Already Saved 15%
If you’ve already reached 15%, the question is whether to buy now or wait for 20%. In most Australian markets, buying now at 15% is the better financial decision — the remaining LMI ($3,000–$8,500) is small relative to the property price, and waiting 12–24 months to save another 5% risks the property price increasing more than the LMI cost.
You Qualify for a Professional Waiver at 85%
If you’re in a qualifying profession, 85% LVR is the easiest level to get an LMI waiver. More lenders, more professions, and less scrutiny than at 90% or 95%. This makes 15% deposit the optimal target for many professionals.
You Want the Best Balance of Rate and Access
At 85% LVR, you get near-optimal interest rates with minimal (or zero) LMI. This combination is hard to beat. You’re only 5% above the ideal 80% LVR, which means your rates are competitive and you’ll reach 80% LVR quickly through repayments.
You’re Buying in a Rising Market
If prices are growing 5–8% per year, the additional time to save from 15% to 20% can cost you more in missed growth than the LMI you’re trying to avoid. On a $1M property growing at 7%, the price increases by $70,000 per year — compared to $8,500 in LMI at 85% LVR.
Your Property Price Is High
The higher the property price, the more expensive it is to save the additional 5%. On a $1.5M property, the gap between 15% ($225,000) and 20% ($300,000) is $75,000. Saving an extra $75,000 to avoid $10,000–$12,000 in LMI doesn’t make financial sense for most buyers.
When You Might Want to Save to 20%
There are scenarios where waiting for a 20% deposit makes sense:
- You’re not in a hurry and the property market in your area is flat or declining
- You can reach 20% within 3–6 months — the savings happen quickly and the LMI saving is worthwhile
- You’re buying an investment property and want to maximise your equity position from the start
- You’re uncomfortable with any level of LMI — even though $3,000–$8,500 is relatively small, some buyers prefer to avoid it entirely as a matter of principle
- You have a specific lender in mind that offers significantly better rates at 80% LVR than at 85%
Common Questions About 15% Deposits
Isn’t 20% the “right” amount?
The 20% deposit has become a psychological anchor for Australian home buyers, but it’s not a financial requirement. It’s simply the threshold where LMI no longer applies. At 15%, the remaining LMI is small, and with the right lender or a professional waiver, it can be zero. The “right” deposit is the one that gets you into property at the best cost without excessive risk.
How long to save from 15% to 20%?
This depends on your savings rate and the property price. At $2,000 per month in savings, it takes approximately 19 months to save the additional 5% on a $750,000 property and 25 months on a $1,000,000 property. During this time, the property price itself may increase substantially.
Can I get a professional waiver at 85% LVR even if I couldn’t at 90%?
Yes. Some professions and lenders offer waivers at 85% LVR that aren’t available at higher LVRs. The additional 5% of equity compared to 90% LVR significantly reduces the lender’s risk, making them more willing to waive LMI for a broader range of professions.
Deposit Sources for 15%
If you’re working towards a 15% deposit, consider these sources:
Regular Savings
The most common and most lender-friendly source. Set up automatic transfers to a high-interest savings account and build your deposit consistently over time.
Existing Property Equity
If you own property (including through a partner or previous purchase), you may be able to use the equity as a deposit for a new purchase.
First Home Owner Grant
State government grants of $10,000–$30,000 can supplement your savings. While these grants typically don’t cover the full deposit, they can bridge the gap between your current savings and 15%.
Gifts From Family
Family gifts are accepted by most lenders as part of your deposit, though genuine savings requirements still apply. Some lenders require that at least 5% of the deposit comes from genuine savings, with the remainder acceptable as a gift.
Share Portfolio or Other Investments
Shares, managed funds, or other liquid investments held for 3+ months typically count as genuine savings. Liquidating investments to fund your deposit is a common strategy.
Salary Sacrifice to Super (First Home Super Saver Scheme)
The FHSS scheme allows you to make voluntary super contributions and withdraw them (plus earnings) for a first home purchase. This can provide tax benefits on your savings and help you reach 15% faster.
15% Deposit by Property Price: Complete Cost Breakdown
Here’s the full picture for buying with a 15% deposit across common property prices:
| $500K Property | $750K Property | $1M Property | |
|---|---|---|---|
| 15% Deposit | $75,000 | $112,500 | $150,000 |
| Loan Amount | $425,000 | $637,500 | $850,000 |
| LMI (if charged) | ~$3,000 | ~$5,500 | ~$8,500 |
| LMI (with waiver/right lender) | $0 | $0 | $0 |
| Stamp Duty (NSW, non-FHB) | ~$17,700 | ~$29,200 | ~$40,500 |
| Other Costs | ~$3,000 | ~$4,000 | ~$5,000 |
| Total Funds (with LMI) | ~$98,700 | ~$151,200 | ~$204,000 |
| Total Funds (no LMI) | ~$95,700 | ~$145,700 | ~$195,500 |
| Monthly Repayment* | ~$2,760 | ~$4,140 | ~$5,520 |
Approximate repayments at 6.00% p.a. principal and interest over 30 years. Stamp duty varies by state — first home buyer concessions can significantly reduce this.
Frequently Asked Questions
Is 15% deposit enough for a home loan?
Yes. A 15% deposit (85% LVR) is well within the range that all major Australian lenders accept. LMI applies at 85% LVR with most lenders, but the cost is relatively low ($3,000–$8,500 typically), and it can be avoided entirely with the right lender or a professional waiver.
Can I avoid LMI with a 15% deposit?
Yes, in two ways. First, some lenders don’t charge LMI at 85% LVR for any borrower. Second, professional LMI waivers are available at 85% LVR for a wide range of professions. See our guide on 85% LVR no LMI for details.
How much is LMI at 85% LVR?
LMI at 85% LVR typically ranges from $2,200 (on a $400,000 property) to $10,500 (on a $1,200,000 property). It’s 40–60% cheaper than LMI at 90% LVR and 70–85% cheaper than at 95% LVR. Use our LMI calculator for a personalised estimate.
Is it better to have a 15% or 20% deposit?
In most cases, buying with 15% is better than waiting for 20%. The remaining LMI at 85% LVR is small ($3,000–$8,500) and can often be avoided entirely. The time required to save the additional 5% (12–25 months) often costs more in rising property prices and rent than the LMI you’d avoid.
What interest rate will I get with a 15% deposit?
At 85% LVR, interest rates are very close to the best rates available at 80% LVR. The typical premium is 0.00–0.10% above the 80% LVR rate. Professional package borrowers may receive rate discounts that eliminate any premium entirely.
Can I refinance once I reach 80% LVR?
Yes. Once your loan balance reaches 80% LVR (through repayments and property value growth), you can refinance to any lender’s best rate without LMI. Starting at 85% LVR, this typically happens within 2–4 years — much faster than starting at 90% or 95%.
Which professions qualify for an LMI waiver at 85% LVR?
At 85% LVR, the range of qualifying professions is broader than at higher LVRs. Doctors, dentists, lawyers, accountants, engineers, IT professionals, nurses, teachers, and various other professions can qualify. Check your eligibility or see the full professional list.
Do first home buyers get a better deal at 15% deposit?
First home buyers can combine a 15% deposit with stamp duty concessions (available in most states up to certain property price thresholds), the First Home Owner Grant (for new builds in most states), and professional LMI waivers. This combination can significantly reduce the total cost of purchase.
Next Steps
A 15% deposit puts you in a strong position — low LMI (or none at all), competitive rates, and meaningful equity from day one. The key is finding the right lender and determining whether you qualify for an LMI waiver.
- Check your LMI waiver eligibility — free, 60 seconds, no credit check
- Explore 85% LVR no LMI options — which lenders waive LMI at 15% deposit
- Estimate your LMI cost — see exactly what you’d pay if LMI applies
- Compare all deposit options — understand whether 15% is the right level for your situation
- View all eligible professions — confirm your profession qualifies for a waiver