How Much Deposit Do You Really Need for an Investment Property?

Investing in property is a popular way for Australians to build wealth. But one of the first questions every investor faces is: how much deposit do you actually need? The answer depends on the type of property, the lender, and your financial situation. Let’s break it down.

Standard Deposit Requirements

Most lenders in Australia require a deposit of 20% of the property’s value for an investment property. This is higher than the minimum deposit for some owner-occupied loans, which can be as low as 5–10%.

For example:

• Property price: $600,000
• 20% deposit: $120,000

This amount shows lenders that you’re financially stable and lowers their risk. It also helps you avoid paying Lender’s Mortgage Insurance (LMI).

The Botany Waterloo | Off the plan Sydney | Secure with $10k and $1,112 x 31 weeks

Can You Buy with a Smaller Deposit?

Yes, but it comes with trade-offs. Some lenders allow investors to buy with a deposit as low as 10%, but you’ll usually need to pay LMI. LMI protects the lender, not you, and can add thousands to your costs.

Example:

• Property price: $600,000
• 10% deposit: $60,000
• LMI cost: varies, but could be $10,000–$20,000

While it reduces the upfront deposit, the extra cost of LMI needs to be considered.

Other Costs Investors Should Budget For

A deposit isn’t the only upfront cost. Investment property buyers also need to cover:

• Stamp duty (varies by state)
• Legal and conveyancing fees
• Building and pest inspections
• Loan application fees
• Ongoing property management costs

Factoring these in ensures you’re financially prepared and won’t be caught off guard.

The Waterline | Off the plan Gold Coast | Secure with $10k and $4,260 x 27 weeks

How Lenders Assess You

Beyond the deposit, lenders will look at:

• Your income and existing debts
• Your credit history
• Rental income potential from the property
• Your overall financial stability

A strong profile can sometimes reduce the deposit required or improve loan terms.

Off the Plan Investment Properties

Buying off the plan can be attractive for investors. You usually pay a deposit now and the balance at settlement, often a year or more later. This gives you time to save more and potentially benefit from property value growth during construction.

However, off the plan also comes with risks such as market changes or delays, so due diligence is essential.

Secret Garden | Off the plan Byron Bay | Secure with $30k and $9,125 x 40 weeks

How Coposit Helps Investors Get Started

Coposit makes it easier to secure an investment property. Instead of paying the full deposit upfront, you can lock in your property with just $10,000. The balance is then paid in weekly instalments until settlement. For investors, this can free up cash for other expenses while still securing a spot in the market.

This flexible approach is particularly useful for off the plan properties, where timing is a key advantage.

Tips for Building Your Investment Property Deposit

• Set a clear savings goal: Know the exact deposit you’ll need.
• Cut unnecessary expenses: Redirect savings towards your deposit.
• Explore high-interest savings accounts: Let your deposit grow with compound interest.
• Look into equity: Use equity from an existing property as part of your deposit.
• Stay consistent: Small, regular contributions add up over time.

Anchorage, Sandstone Point | Off the plan Queensland | Secure with $20k and $784 x 83 weeks

Understanding the Real Deposit for Investment Property Success

The deposit you need for an investment property depends on your goals and financial position. While 20% is the standard, there are options with lower deposits if you’re prepared for LMI or use innovative solutions like Coposit. With planning, discipline, and the right strategy, you can take your first step into property investment sooner than you think.