15 May 2026 How Much Deposit Do I Need in South East Melbourne? Your 2026 Guide

In 2026, South East Melbourne homebuyers have more deposit options than many realise. Whether you’re looking at your first home in St Kilda – Windsor or Cheltenham, the minimum deposit ranges from 5% through government schemes up to the traditional 20%, and which option works best depends on your situation and the property you’re buying.

The most common misconception is that 20% is your only option. While a 20% deposit avoids lenders mortgage insurance (LMI), government schemes like the First Home Guarantee and Family Home Guarantee allow deposits as low as 5% and 2% respectively, with no LMI required. For a $950,000 purchase in South East Melbourne, that’s the difference between saving $190,000 versus $47,500.

EverLend helps South East Melbourne homebuyers compare deposit options across 60+ lenders, completely free of charge.

Here’s what you need to know about deposit requirements before you start saving or shopping.

What’s the minimum deposit for a home loan in South East Melbourne?

The minimum deposit for a home loan in South East Melbourne is 5% through the First Home Guarantee scheme, available to first home buyers up to a $950,000 purchase price. For eligible single parents, the Family Home Guarantee requires just 2%. Without government scheme eligibility, most lenders require a minimum 10% deposit, with full-doc borrowers able to access this across all property types.

Which government schemes reduce deposit requirements?

• First Home Guarantee: 5% deposit, no LMI, up to $950,000 purchase price. First home buyers only, no income caps, available for new and established properties.
• Family Home Guarantee: 2% deposit, no LMI, up to $950,000 purchase price. Single parents only (must be genuinely single, not separated-not-divorced), previous homeowners can apply.
• Help to Buy: 2% deposit with government contributing up to 40% equity on new builds or 30% on established homes. Income caps apply – $100,000 for singles, $160,000 for couples. Limited to CBA and Bank Australia as of April 2026.
• Victorian Off-the-Plan Concession: Available to all buyers until 20 October 2026. Construction costs excluded from stamp duty calculation, potentially bringing off-the-plan purchases back under the $600,000 first home buyer exemption threshold.

How do mortgage brokers help you choose the right deposit amount for South East Melbourne?

Step 1: Talk to us

Get in touch and we’ll assess your income, savings, and goals to identify which deposit options are available across our 60+ lender panel.

Step 2: Check scheme eligibility

We confirm your eligibility for government schemes like the First Home Guarantee or Family Home Guarantee, which can dramatically reduce your required deposit and eliminate LMI costs.

Step 3: Compare total costs

We calculate the real cost of different deposit levels – including LMI, opportunity cost of your savings, and monthly repayments – so you can see the full picture before deciding.

Step 4: Match lenders to your deposit

Different lenders have different minimum deposit requirements and LMI arrangements. We identify which lenders offer the most competitive outcome for your chosen deposit level.

Step 5: Submit your application

We handle your application with the lender that gives you the strongest outcome, managing all documentation and liaising between you, the lender, and your solicitor throughout the process.

Step 6: Ongoing support through settlement

We stay involved right through to settlement, handling any lender queries and ensuring your loan proceeds smoothly to completion.

Common deposit mistakes in South East Melbourne

The biggest mistake South East Melbourne buyers make is assuming they need 20% before they even explore their options. This can delay purchasing by years unnecessarily. For a $700,000 property, waiting to save a 20% deposit ($140,000) versus using the First Home Guarantee at 5% ($35,000) means saving an extra $105,000 while property prices continue rising.

The second common error is not factoring in all upfront costs when calculating your deposit. Beyond the deposit itself, you’ll need funds for stamp duty (unless exempt), solicitor fees, building and pest inspections, and loan establishment costs. On a $600,000 purchase in St Kilda West, budget approximately $8,000-$12,000 in additional upfront costs even with a stamp duty exemption.

LMI costs versus government scheme savings

Understanding the real cost of LMI helps you compare deposit options accurately. For a $950,000 purchase at 5% deposit, LMI typically costs approximately $35,000. The First Home Guarantee eliminates this cost entirely while allowing the same 5% deposit, representing immediate savings that make the scheme worthwhile for eligible buyers.

However, LMI isn’t always prohibitive. For borrowers who don’t qualify for government schemes, paying LMI to enter the market sooner can make financial sense if property growth outpaces the LMI cost. In suburbs like Glen Iris, where houses have grown +6.05% over the past 12 months, entering the market 18 months earlier by accepting LMI often produces a net positive outcome.

Frequently Asked Questions

What’s the minimum deposit for a first home buyer in South East Melbourne?

5% through the First Home Guarantee scheme, which applies to purchases up to $950,000 and eliminates LMI. This scheme has no income caps and applies to both new and established properties across South East Melbourne.

Do I need a 20% deposit to avoid LMI?

Not necessarily. Government schemes like the First Home Guarantee (5% deposit) and Family Home Guarantee (2% deposit) eliminate LMI requirements for eligible buyers. Some lenders also offer professional LMI waivers up to 90% LVR for doctors, lawyers, and other eligible professions.

How much deposit do I need for an investment property?

Most lenders require a minimum 20% deposit for investment properties, though some specialist lenders accept 10% with LMI. Investment loans typically carry higher rates and stricter serviceability requirements than owner-occupier loans.

Can I use equity from my current home as a deposit?

Yes, usable equity from your existing property can function as a deposit for your next home purchase. Most lenders allow you to access up to 80% of your current property’s value, minus the existing loan balance, as equity for a new purchase.

What costs do I need beyond the deposit?

Budget for stamp duty (unless exempt), solicitor fees ($1,200-$2,500), building and pest inspections ($600-$1,200), loan establishment fees, and moving costs. Total additional costs typically range from $8,000-$25,000 depending on the purchase price and your exemption status.

Should I use a mortgage broker or go to my bank for deposit advice?

A mortgage broker, every time. Banks can only offer their own products and deposit requirements, while brokers compare options across 60+ lenders to find the most suitable deposit structure for your situation. Government scheme access also varies by lender.

How long does it take to save a deposit in South East Melbourne?

That depends on your savings capacity and target deposit amount. For a 5% deposit on a $600,000 unit purchase, you need $30,000 plus costs. For a 20% deposit on an $800,000 purchase, you need $160,000 plus costs. The right deposit level balances your timeline with the total cost of borrowing.

Your Next Steps

Your deposit strategy affects everything from your timeline to your total borrowing costs in South East Melbourne. The difference between government schemes, professional LMI waivers, and standard deposit requirements can shift your entry point by years and save tens of thousands in upfront costs.

Ready to find out what deposit you actually need for your situation? Contact Evelyn Clark for a free consultation or call 03 7036 3356. We’ll assess your eligibility for all available schemes and identify the deposit option that gets you into your South East Melbourne home soonest.