The deposit needed for an investment property is usually 20% of the purchase price, plus buying costs. But 20% is the cleanest route, not the only route.
You may be able to buy with a 10% to 15% deposit and pay lenders mortgage insurance. If you already own property, usable equity may cover your deposit and purchasing costs without you saving the full amount in cash.
Picture the bag you have been eyeing for a while. There are three ways to walk out with it.
You save the full price and pay upfront. You pay most of it now and accept a fee for not waiting. Or you trade in something you already own for store credit and barely touch your savings.
All three get you the bag.
Buying an investment property works in a similar way, yet most women only hear about option one.
How Much Deposit for an Investment Property Is Enough?
There are three main routes into an investment property.
The Three Routes In
20% deposit. The clean option. It keeps your purchase loan at 80% of the property’s value and generally helps you avoid lenders mortgage insurance.
10% to 15% deposit. This can get you moving sooner, but you may need to pay LMI and carry a larger loan.
Equity instead of cash. If you already own property, the usable equity sitting in it may cover your deposit and buying costs.
None of these is automatically correct.
They are three doors into the same room. The right one depends on your borrowing power, cash flow, savings timeline and ability to hold the property comfortably.
The 20% Deposit and Why It Is the Benchmark
Put down 20% on a $600,000 investment property and you are borrowing $480,000.
That gives you an 80% loan-to-value ratio, or LVR. Your LVR is simply your loan divided by the lender-assessed value of the property.
At 80% LVR, you will generally avoid LMI because the lender has a larger buffer between what you owe and what the property is worth. Moneysmart’s guidance on property deposits says LMI may apply when your LVR is above 80%.
A larger deposit also gives you a smaller loan, lower repayments and less interest over time.
But here is the reframe:
Twenty per cent is the point where borrowing usually becomes cheaper. It is not the point where investing becomes possible.
Treating 20% as a universal rule could leave you waiting years for a lending cost you may not have needed to avoid.
Starting Sooner With a Smaller Deposit and LMI
Buy a $600,000 property with a 10% deposit and your cash deposit falls from $120,000 to $60,000.
Your base purchase loan rises to $540,000, before LMI.
Lenders mortgage insurance protects the lender if you cannot repay the loan and the property sale does not recover the debt. It does not protect you, even though you generally pay for it.
Think of LMI as a cover charge.
You pay extra for access before you have saved the full 20%. The lender gets the protection. You get the opportunity to buy sooner.
As at 17 August 2026, Helia says the typical LMI fee is between 1% and 2% of the loan value, depending on the deposit and amount borrowed. On a $540,000 loan, that gives you a rough planning range of $5,400 to $10,800.
The actual premium may be different. It depends on the lender, borrower, property and loan structure.
LMI can sometimes be capitalised, meaning it is added to the loan rather than paid upfront. That reduces the cash required at settlement, but increases your debt and the interest you pay.
A smaller deposit means more debt and less equity on day one. It can also mean buying earlier.
Waiting has a potential cost too if property prices move while you save, although growth is never guaranteed. Ask a mortgage broker to compare the LMI and extra interest against the time needed to reach 20%.
There is no universal right answer. There is only the option that works for your numbers and timeline.
Using Equity Instead of a Cash Deposit
Do you need a deposit for an investment property if you already own a home?
Not necessarily.
You may be sitting on your next deposit without realising it.
A common starting formula is:
Property value × 80% − current loan balance = estimated usable equity
Imagine your property is worth $800,000 and you owe $480,000:
- 80% of the property value: $640,000
- Current loan balance: $480,000
- Estimated usable equity: $160,000
That could potentially cover a $120,000 deposit on a $600,000 investment property, plus Queensland transfer duty and some additional costs.
But equity is not free money.
You are borrowing against an asset you already own. If equity funds the 20% deposit and another loan funds the remaining 80%, you may effectively be borrowing the full purchase price across two loan facilities.
Your total debt increases, and you still need the borrowing power and cash flow to service it.
The benefit is that you may not need to rebuild a cash deposit from zero. InvestHer’s guide to using equity to buy an investment property explains how this route works in more detail.
The Costs Beyond the Deposit
This is where the clean 20% plan quietly falls apart for many buyers.
You save the deposit, hit your target and assume you are ready. Then stamp duty, legal fees and inspections arrive.
In Queensland, stamp duty is called transfer duty. As at 17 August 2026, the Queensland Revenue Office transfer duty rates put the duty on a $600,000 investment property at $20,025, assuming the general rates apply and no concession is available.
That sits on top of your deposit. It generally needs to be funded through available cash or a separately approved equity facility rather than the standard purchase loan.
You should also budget for:
- Conveyancing or legal fees
- Building and pest inspections
- Loan, valuation and settlement fees
- Government registration charges
- Appropriate insurance
Then add a cash buffer.
Your buffer is not another settlement cost. It is what lets you hold the property through a vacancy, urgent repair, rate increase or unexpected household expense.
If you are preparing for parental leave, buying alone after a separation or already managing tight family cash flow, your comfortable buffer may need to be larger than someone else’s.
There is no prize for settling with $14 left in your account.
What This Looks Like on a $600,000 Property
Here is how the three routes compare for a $600,000 Queensland investment property.
| Deposit Route | Deposit Source | Purchase Loan | Indicative LMI | Cash Needed Before Other Costs and Buffer |
|---|---|---|---|---|
| 20% Cash Deposit | $120,000 cash | $480,000 | Generally avoided | $140,025 |
| 10% Deposit With LMI Capitalised | $60,000 cash | $540,000 plus LMI | Approx. $5,400 to $10,800 | $80,025 |
| Deposit and Duty Funded From Equity | At least $140,025 in approved equity | $480,000 purchase loan plus equity facility | Potentially avoided | Potentially $0 fresh savings |
These are planning examples, not lending quotes.
The cash figures include the deposit and $20,025 Queensland transfer duty. They exclude conveyancing, inspections, lender charges, insurance and your buffer.
For the 10% scenario, paying LMI upfront instead of capitalising it would increase the initial cash requirement to roughly $85,425 to $90,825, before the remaining costs.
For the equity scenario, $0 fresh savings does not mean $0 cost.
It means you are funding the deposit and duty with additional debt rather than money from your savings account.
Your real target is not one neat deposit percentage. It is the amount required to buy and hold the property without putting the rest of your life under unnecessary pressure.
A Quick Word on First Home Buyer Schemes
Government low-deposit schemes and first home buyer grants are generally designed for homes you intend to live in.
As at 17 August 2026, the Australian Government 5% Deposit Scheme requires you to live in the property as an owner-occupier. It is not a shortcut into a pure investment property.
Rentvesting may create a different pathway if you buy a home to occupy first and invest later. Check the occupancy requirements before building your strategy around a grant or scheme.
Support should fund the right plan. It should not push you into the wrong property.
How to Work Out Your Real Number
Use this formula:
Deposit or usable equity + stamp duty + purchasing costs + cash buffer = your real funding target
Not the round 20% figure everyone quotes.
Your number.
Start by confirming your borrowing power with a mortgage broker. Your maximum approval and your comfortable budget are not always the same.
Then:
- Choose whether you are using savings, equity or a smaller deposit with LMI.
- Calculate the deposit against a realistic purchase price.
- Add stamp duty and obtain quotes for the remaining costs.
- Keep a buffer that reflects your income, responsibilities and future plans.
Once you can see those four pieces separately, the deposit stops feeling like an impossible wall.
It becomes a plan.
How InvestHer Helps You Move With a Clear Plan
You do not need more opinions about whether you have saved enough. You need a strategy that shows you what is possible and what the purchase will require.
Book a discovery call with InvestHer to understand your position and build a clear property investment plan, whether you are investing independently or with a partner.
Stop guessing. Start assessing.
This content is provided for general information purposes only and does not take into account your personal financial situation, objectives or needs. You should seek independent financial and tax advice before acting on any information provided.