One of the most common things first-home buyers hear is that they only need a 5% deposit to get into the property market. While that statement isn’t wrong, it is incomplete — and it’s where many buyers get caught out.
Let’s break it down using a realistic example.
If you’re buying a property around $800,000, a 5% deposit equals $40,000.
That figure is important because it’s the part banks focus on when assessing whether you meet minimum deposit requirements. From a lending perspective, that 5% is the key number.
But it’s only half the story.
In addition to the deposit, first-home buyers need to cover a range of upfront costs that sit outside the loan. These expenses aren’t included in your borrowing capacity and must usually be paid in cash.
Using an $800,000 purchase as a guide, those additional costs typically include:
Altogether, that’s close to $36,000–$40,000 on top of the deposit.
When you add it all up, the true amount first-home buyers need to save for an $800,000 purchase is closer to $80,000.
The bank may only require evidence of the $40,000 deposit, but buyers still need to fund the remaining costs themselves. This is where many people are surprised — they’ve done the right thing by saving their 5%, only to discover it doesn’t cover everything required to complete the purchase.
Knowing the full cost upfront helps buyers:
It also highlights why early advice is so important. Understanding what lenders assess — versus what buyers actually need to pay — allows for better planning and fewer surprises.
Saving a 5% deposit is a great milestone, but it’s not the finish line.
For first-home buyers, the real goal is understanding the total cost of getting into the market, not just the part the bank focuses on. Planning for the full picture puts buyers in a far stronger position when it comes time to buy.
