In short: For a $700,000 house in Melbourne you need a deposit of $35,000 (5%) if you qualify for the First Home Guarantee, $70,000 (10%) if you are paying lenders mortgage insurance, or $140,000 (20%) to avoid LMI altogether. On top of the deposit, budget for stamp duty of up to $37,070 (less for first home buyers) and a few thousand dollars in conveyancing, inspection and lender fees.
Seven hundred thousand dollars buys a good house in Craigieburn, Wollert, Point Cook or Cranbourne, or a townhouse further in. It is also the price point where the deposit question has three quite different answers depending on which door you walk through. This post puts real numbers on each one.
The three deposit levels compared
For illustration, at 6.00% p.a. over 30 years, principal and interest:
| Deposit | Amount | Loan | LVR | LMI | Monthly repayment |
|---|---|---|---|---|---|
| 5% | $35,000 | $665,000 | 95% | Nil with the First Home Guarantee; otherwise payable | $3,987 |
| 10% | $70,000 | $630,000 | 90% | Payable unless a scheme or guarantor removes it | $3,777 |
| 20% | $140,000 | $560,000 | 80% | Nil | $3,358 |
The difference between a 5% and a 20% deposit is $105,000 in cash up front and $629 a month in repayments. Both matter. The question is whether waiting to save the larger amount costs you more than the extra interest and any LMI. Our how much deposit do I need guide covers that decision framework.
Option 1: 5% with the First Home Guarantee
Since October 2025 the First Home Guarantee has no income cap and unlimited places. For a $700,000 purchase, comfortably under the $950,000 Melbourne cap, an eligible first home buyer needs:
- $35,000 deposit, generally as genuine savings held for three months
- To be an Australian citizen or permanent resident, 18 or over
- To live in the home and not have owned property in Australia in the last 10 years
No LMI applies. The trade-off is a larger loan and higher repayments than a 20% deposit buyer, and less equity cushion if prices soften. Check your eligibility in the First Home Guarantee eligibility calculator.
Option 2: 10% and pay LMI
If you have owned before, or one applicant does not qualify, a 10% deposit with LMI is the conventional route. LMI protects the lender, not you, and the premium depends on the loan size and LVR. At 90% on a $630,000 loan it runs to thousands of dollars, and it can usually be added to the loan rather than paid in cash. Get an estimate with the LMI calculator and read understanding LVR and LMI.
Two alternatives to paying LMI at 10%:
- A guarantor. A parent's property secures the top slice of your loan, taking your effective LVR to 80% or below. See guarantor home loans.
- Professional or lender-specific LMI waivers. Some lenders waive LMI for certain occupations at up to 90% LVR. Ask us who is offering what.
Option 3: 20% and avoid LMI
At $140,000 you avoid LMI, access the sharpest rates and start with a real equity buffer. The cost is time. Saving $140,000 at $1,500 a month takes close to eight years before interest, which is why most first home buyers in Melbourne no longer wait for it. Model your own savings timeline with the deposit savings calculator.
Do not forget the costs on top of the deposit
| Cost item on a $700,000 house | First home buyer, principal residence | Second home buyer, principal residence |
|---|---|---|
| Land transfer duty | Reduced on the sliding scale between $600,001 and $750,000; full duty would be $37,070 | $37,070 ($2,870 + 6% of $570,000) |
| Conveyancing, searches, registration | A few thousand dollars | A few thousand dollars |
| Building and pest inspection | Several hundred dollars | Several hundred dollars |
| Lender application and valuation fees | Varies, often waived | Varies, often waived |
| Moving, connections, immediate repairs | Variable | Variable |
The first home buyer sliding scale gives a bigger discount the closer you are to $600,000. Check the exact figure with the stamp duty calculator or the State Revenue Office. If the home is brand new and never occupied, the $10,000 First Home Owner Grant applies too, since $700,000 is under the $750,000 grant cap.
The realistic savings target
For a first home buyer using the guarantee on an established $700,000 house:
| Item | Amount |
|---|---|
| Deposit (5%) | $35,000 |
| Stamp duty on the sliding scale | Roughly two-thirds of $37,070; confirm with the SRO |
| Other costs | Around $5,000 |
| Suggested buffer after settlement | $5,000 to $10,000 |
| Total to have saved | Roughly $70,000 to $75,000 |
That is a very different number from $35,000, and it is the number people forget. Use the upfront costs calculator to refine it.
The other route: Help to Buy
If your income is under $100,000 as a single or $160,000 as a couple, the federal Help to Buy scheme is worth modelling for a $700,000 purchase, which is within the Victorian cap of $950,000 at the time of writing.
For illustration, an existing home:
| Item | Amount |
|---|---|
| Purchase price | $700,000 |
| Government equity contribution (30% for existing) | $210,000 |
| Your deposit (2%) | $14,000 |
| Your loan | $476,000 |
| Monthly repayment at 6.00% p.a. over 30 years | $2,854 |
For a new home the government contributes up to 40%, or $280,000, leaving a $406,000 loan and repayments of about $2,434. You give up a share of future capital growth and buy the government's stake out over time. Our Help to Buy guide explains the conditions.
Can you service a $665,000 loan?
Lenders assess at your rate plus 3 percentage points. At 6.00% that means 9.00%, where a $665,000 loan costs about $5,351 a month. Your income, after living expenses, HECS, car loans and credit card limits, needs to cover that figure. A couple on solid full-time incomes usually can. A single income often cannot at this price. The borrowing power calculator gives a quick read.
Frequently asked questions
Can I buy a $700,000 house with a 5% deposit in Melbourne?
Yes, if you qualify for the First Home Guarantee. You need $35,000 in savings, to be an Australian citizen or permanent resident who has not owned property in Australia in the last 10 years, and to live in the home. There is no income cap. Without the guarantee, a 5% deposit is possible with some lenders but LMI will be expensive.
How much is stamp duty on a $700,000 house in Victoria?
The general rate is $37,070, calculated as $2,870 plus 6% of the amount over $130,000. Eligible first home buyers who will live in the property receive a sliding concession because the price sits between $600,001 and $750,000, cutting the bill substantially. There is no principal place of residence concession at this price for non-first home buyers.
How long does it take to save a deposit for a $700,000 house?
Saving $35,000 at $1,000 a month takes just under three years before interest; saving $140,000 at the same rate takes over eleven. That gap is why many Melbourne buyers use the First Home Guarantee, a guarantor or a family gift to buy sooner. A gift can cover most of the deposit, but lenders usually want 5% as genuine savings.
Is a bigger deposit always better?
A bigger deposit means a smaller loan, lower repayments and no LMI, but it also means years of rent and the risk that prices move while you save. If a 5% deposit with no LMI gets you into a home you can comfortably service, waiting for 20% often costs more than it saves. Run both scenarios before deciding.
Talk to GNT Finance
Whether you have $35,000 or $140,000 saved, GNT Finance can show you exactly which path to a $700,000 home works for your income and which lenders will approve it. Book a free consultation or call Gorakh Timilsina on 0426 403 703.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.