CompareAll Business InsuranceCompare Business InsuranceOverseas Visitor CoverAll LoansCompare Loans
You can buy a home with a deposit of 5% to 10%, but unless you use a government scheme or qualify for a waiver, you'll usually pay lenders mortgage insurance (LMI) once you borrow more than 80% of the property's value. LMI protects the lender, not you, and it is typically added to your loan as a one-off premium.
This page explains LVR and LMI, what lenders say LMI can cost, which lenders we review lend at high LVRs, and the ways to buy with a small deposit without paying LMI.
By Better Rate Mate Editorial Team · Last reviewed
Your loan-to-value ratio is the loan amount divided by the lender's valuation of the property. A $760,000 loan on an $800,000 home is a 95% LVR. Lenders set rates, LMI and eligibility by LVR bands, so a few percentage points of deposit can change both your rate and your costs. The RBA's July 2026 figures show new owner-occupier loans at 81% LVR or more averaged 6.33%, against 6.22% below 81%.
| Deposit | LVR | LMI | Notes |
|---|---|---|---|
| 20% or more | 80% or less | Not usually | Access to the lowest LVR-tier rates at most lenders |
| 15% | 85% | Usually | Athena's Tailored loans start from a 15% deposit |
| 10% | 90% | Usually | Unloan's maximum LVR is 90%; Bankwest fixed loans go to 90% including LMI |
| 5% | 95% | Usually, unless using the 5% Deposit Scheme | ING and Bendigo Bank (Flex) publish lending up to 95% |
| 2% | Varies | Not under Help to Buy or the single-parent 5% Deposit Scheme | Only through those schemes; under Help to Buy the government's 30% to 40% share reduces your loan |
LMI is insurance the lender takes out, and you pay for, that covers the lender if you default and the sale of the property doesn't repay the loan. It is different from mortgage protection insurance, which covers your repayments.
The premium depends on your LVR, the loan size and the lender's insurer. CommBank says LMI generally ranges from 1% to 5% of the loan amount, and that on a $500,000 loan with a 10% deposit it could cost over $10,000. The premium is usually added to the loan, so you also pay interest on it. It is generally non-refundable: Unloan, for example, states that its LMI premium isn't refunded or transferred if you refinance or your LVR later falls below 80%.
There are five legitimate routes, each with its own conditions.
| Route | Minimum deposit | Who it suits | Main conditions |
|---|---|---|---|
| 5% Deposit Scheme | 5% (2% single parents) | First home buyers and single parents | Participating lender, price cap, owner-occupier, 10 years since last owning property |
| Help to Buy | 2% | Lower-income buyers | Citizens only, income caps, government takes a 30% to 40% equity share |
| Profession-based LMI waiver | Varies | Eligible professionals | NAB: may be available for medical, legal and financial professionals; Westpac: special packages based on profession |
| Family guarantee | Varies | Buyers with family who own property | A family member's property secures part of the loan; not every lender accepts guarantors (Unloan doesn't) |
| Save to 20% | 20% | Anyone | Takes longer; prices may move while you save |
Possibly. A $40,000 deposit is 5% of an $800,000 home and a $30,000 deposit is 5% of $600,000. Through the 5% Deposit Scheme, that is enough if the price is under the local cap, you're eligible and you can service the loan. Outside the scheme, a 5% deposit means paying LMI at a lender that lends to 95%. Either way you also need money for stamp duty (unless exempt) and purchase costs.
Common. APRA's figures show 29.7% of new bank home loans in the June quarter 2026 had an LVR of 80% or more. The RBA's March 2026 Financial Stability Review noted that high-LVR lending to first home buyers increased alongside the expansion of the 5% Deposit Scheme in October 2025.
Yes: use the 5% Deposit Scheme (first home buyers) or Help to Buy, qualify for a profession-based waiver (NAB and Westpac publish these), use a family guarantee, or save a 20% deposit.
It depends on the loan size and lender. CommBank says a $500,000 loan with a 10% deposit could attract LMI of over $10,000, and that LMI generally ranges from 1% to 5% of the loan amount. Ask your lender for a quote.
Only through a government scheme: Help to Buy (2% minimum, income limits apply) or the 5% Deposit Scheme for single parents and legal guardians (2% minimum).
$25,000 (5%) with the 5% Deposit Scheme if the home is under the price cap, or $100,000 (20%) to avoid LMI without a scheme. Add stamp duty and purchase costs.
Not on your own home. On an investment property, the ATO treats LMI as a borrowing expense claimed over five years or the loan term if shorter.
We don't quote lenders' interest rates: they change daily and with every RBA decision, and we don't have a live rate feed. The averages we quote are the RBA's published figures for the month shown. Always get the lender's key facts sheet, which shows the rate and comparison rate for your loan amount.
