How much deposit do you need for an investment property? Twenty per cent is the number everyone quotes, and it is a good starting point. It is not the only way in. The answer depends on the lender, the property and what you already own, and for plenty of investors the deposit is not cash at all.
Why 20 per cent is the common figure
Lenders commonly lend up to 80 per cent of a property’s value before they charge you to insure the loan. A 20 per cent deposit sits right on that line. Put in less and the lender may still lend, often up to 90 per cent, but it will usually charge for that insurance and look harder at your income.
The costs on top
The deposit is not the whole of the cash needed. Stamp duty, legal costs, loan fees and building and pest inspections come on top, and stamp duty can run to tens of thousands. On a house and land package with separate contracts, stamp duty in most states is charged on the land, not the build, where the build has not started at signing.
The deposit you may already hold
If you own a home or another property, the deposit may already be sitting in it as equity. The lender releases part of that equity as a separate loan, and that loan becomes the deposit and costs for the next property. It is still borrowed money with interest, and the lender tests whether your income carries it. But it means the second property does not have to wait for years of saving.
A teacher of 34 has saved $40,000 towards an investment and plans to keep saving for three more years. What she has not looked at is the unit she already owns, which has risen in value since she bought it. Its usable equity is more than her savings. The question was never only how much she had saved.
What a smaller deposit asks of you
A smaller deposit means a bigger loan, higher repayments and more interest over the life of the loan. It also means less room if values fall early. The figure worth knowing is not the smallest deposit a lender will accept, but the one that leaves the weekly cost of holding comfortable for you.
Nicholas Lockhart
General information only. No advice is given. Lending practice and duty rules as at 10 October 2026; they vary by lender and by state. A broker can confirm what applies to you.