One of the first questions every aspiring investor asks is: how much do I actually need to get started? The deposit is only part of the answer — there are upfront costs on top — but knowing the numbers lets you set a realistic savings target.
The short answer: usually 20%
Most lenders want a 20% deposit for an investment property. On a $500,000 property that's $100,000. Putting in 20% lets you avoid Lenders Mortgage Insurance (see below) and generally unlocks better interest rates.
You can buy with less — but it costs you
Many lenders will accept a 10% deposit (sometimes lower) for investors, but anything under 20% triggers Lenders Mortgage Insurance (LMI) — a one-off premium that protects the lender, not you, if you default. LMI can run into the thousands or tens of thousands and is usually added to the loan.
Example: $500,000 investment property
20% deposit: $100,000 + costs, no LMI
10% deposit: $50,000 + costs + LMI (often $8,000–$15,000)
The smaller deposit gets you in sooner but adds cost and a bigger loan.
Check the real numbers first
PropertyScout pulls free government data for every Australian suburb — median price, rent, gross yield, vacancy, reported crime and local schools — on one page. Search a suburb, compare two suburbs, or browse our data studies.
Don't forget the upfront costs
The deposit isn't the only cash you need at settlement. Budget for:
- Stamp duty — the biggest extra cost, varying by state and price. Read our gearing guide for how holding costs interact with tax.
- Conveyancing / legal fees — typically $1,000–$2,500.
- Building and pest inspection — a few hundred dollars well spent.
- Loan and lender fees — application, valuation and settlement charges.
- A cash buffer — lenders like to see you can cover vacancies and repairs.
Using equity instead of cash
If you already own a home or another investment that has risen in value, you may be able to use the equity as your deposit instead of saving cash. Borrowing against existing equity is how many investors buy their second and subsequent properties without a fresh cash deposit each time.
Match your budget to the right suburb
Once you know your deposit, you know your price range. Our most affordable suburbs study shows where your budget stretches furthest, and you can search any suburb to check the yield and rental demand before you buy. Get the numbers right before you fall in love with a property.
Frequently Asked Questions
How much deposit do I need for an investment property in Australia?
Most lenders prefer a 20% deposit to avoid Lenders Mortgage Insurance — for example, $100,000 on a $500,000 property. Some lenders accept 10% or less, but a deposit under 20% triggers LMI, which adds thousands to the cost.
What is Lenders Mortgage Insurance (LMI)?
LMI is a one-off premium charged when your deposit is below 20%. It protects the lender (not you) if you default, and can cost several thousand to tens of thousands of dollars depending on the loan size and deposit.
Can I use equity instead of a cash deposit?
Yes. If you own a property that has grown in value, you may be able to borrow against that equity to fund the deposit on an investment property, rather than saving a new cash deposit.