How Much Deposit Do You Need for Off the Plan in Australia?

For off-the-plan property in Australia, you typically need a 10% deposit paid at contract signing — held in a trust account until settlement. However, eligible first home buyers can purchase with as little as 5% deposit through the federal First Home Guarantee, avoiding lenders mortgage insurance (LMI) entirely. Some developers also accept 5% deposits on specific releases. BK Home Broker can advise on current low-deposit options with zero buyer fees.

The Standard Off-the-Plan Deposit: 10%

The standard deposit for an off-the-plan purchase in Australia is 10% of the purchase price, paid at contract exchange. This deposit is held in a statutory trust account (not released to the developer) until settlement. For a $650,000 house and land package, this means $65,000 at contract signing. Settlement typically occurs 12–24 months later when the build is complete. Your deposit is protected — if the developer goes into administration before settlement, the deposit trust is quarantined from creditors.

Can You Buy Off the Plan With 5% Deposit?

Yes, in two ways. First: the federal First Home Guarantee (part of the Home Guarantee Scheme) allows eligible first home buyers to purchase a new build with 5% deposit and no LMI. The federal government guarantees the remaining 15% of the loan. Second: some developers on specific project releases accept 5% deposits as a sales incentive — particularly on initial releases or end-of-project stock. BK Home Broker monitors which projects currently accept 5% deposits and can match buyers to these opportunities.

First Home Guarantee: Who Qualifies?

The federal First Home Guarantee (formerly First Home Loan Deposit Scheme) allows eligible buyers to purchase with 5% deposit and no LMI. Eligibility requirements: Australian citizen or permanent resident. First home buyer (never owned a property). Income under $125,000 (single) or $200,000 (couple). Property must be a new build, off-the-plan, or substantially renovated. Property price cap: $700,000 in Brisbane and regional QLD; $800,000 in Melbourne (check current caps). 35,000 places are available per financial year — spots fill up, especially in H2 of the financial year.

What Counts as Your Deposit?

Your deposit can come from: Genuine savings (held in your account for 3+ months). First Home Owner Grant (in QLD, the $30,000 FHOG can contribute toward your deposit at settlement — but note it is paid at settlement, not at contract exchange). Gifts from family (some lenders accept gift letters). First Home Super Saver Scheme (FHSS): voluntary super contributions up to $50,000 can be withdrawn for a first home deposit. FHSS is particularly useful for off-the-plan buyers since the build timeline gives extra time to grow the super balance.

Lenders Mortgage Insurance (LMI) — What Is It and How to Avoid It?

LMI is insurance that protects the lender (not you) if you default on a loan with less than 20% deposit. LMI premiums typically cost $8,000–$25,000 for a first home buyer with a 5–10% deposit on a $600,000–$750,000 property. You can avoid LMI by: Using the First Home Guarantee (5% deposit, government guarantee covers LMI). Saving a 20% deposit. Having a guarantor (parent provides equity as security). For most first home buyers, the First Home Guarantee is the fastest and cheapest path to avoiding LMI.

Deposit Timeline for Off the Plan vs House and Land

Off-the-plan apartment: 10% at contract exchange, 90% at settlement (typically 18–36 months later). House and land package: deposit structure varies. Typically 10% on the land contract at signing, then progress payments to the builder as construction milestones are reached (slab, frame, roof, fit-out, completion). For house and land, buyers need to arrange construction finance — a mortgage that draws down in stages rather than a lump sum at settlement.

How BK Home Broker Helps With Deposit Planning

BK Home Broker is a specialist off-the-plan broker covering QLD, VIC, WA and NSW. We help buyers understand their deposit requirements before signing anything, connect them with specialist mortgage brokers for First Home Guarantee applications, and identify projects that accept 5% deposits on current releases. Our service is completely free to buyers — developers pay our commission. Book a free consultation at bkhomebroker.com.au.

Frequently Asked Questions

Is a 10% deposit held safely? Yes. Off-the-plan deposits in Australia are held in statutory trust accounts regulated by state law. They cannot be accessed by the developer until settlement.

Can I use my FHOG as a deposit? The QLD FHOG ($30,000) is paid at settlement, not contract exchange. You still need to fund the 10% (or 5% under First Home Guarantee) at signing. However, the FHOG reduces the amount you need to borrow at settlement.

What happens to my deposit if the developer goes broke? If a developer goes into administration before your off-the-plan property settles, your deposit is protected in the statutory trust. You can generally terminate the contract and recover your full deposit. BK Home Broker recommends buyers always verify their solicitor has confirmed the trust arrangement before exchanging contracts.