It's usually the first question investors ask: how much deposit for an investment property do I actually need? The truth is there's no single number. It depends on the lender, the property, your finances and whether you're happy to pay lenders mortgage insurance.

In this guide, we'll explain how deposits work for investment loans, why 20 per cent is a common target, the upfront costs you need on top of the deposit, how equity can be used instead of cash, and the factors that change how much you'll need.

How much deposit for an investment property: the short answer

Lenders talk about deposits in terms of the loan-to-value ratio (LVR). That's the loan amount as a percentage of the property's value. A 20 per cent deposit means an LVR of 80 per cent.

There's no fixed legal minimum deposit for an investment property. Each lender sets its own maximum LVR for investment loans, and it can vary with the property type, location and your situation. In general:

A deposit of 20 per cent or more usually means you can avoid lenders mortgage insurance (LMI).
A deposit of less than 20 per cent may still be possible with some lenders, but LMI will usually apply.

Moneysmart explains that LMI is payable when the amount borrowed is more than 80 per cent of the property's value, and that it protects the lender, not you. It's usually charged as an upfront amount, which adds to the cost of buying.

Why a 20 per cent deposit for investment property is a common target

A larger deposit for investment property can help in a few ways:

You may avoid LMI, which can be a significant upfront cost.
You borrow less, so you pay less interest over the life of the loan.
Your repayments are lower, which makes it easier to cover the property if rent drops or the property is empty for a while.
You start with a buffer of equity, which gives you some protection if property values fall.

A smaller deposit can get you into the market sooner, but it means a bigger loan, more interest and LMI. There's no right answer for everyone. It's about what you can comfortably sustain.

Can you use the 5% Deposit Scheme for an investment property?

No. The Australian Government 5% Deposit Scheme is for eligible buyers who will live in the home as owner-occupiers. Its fact sheet states that investment properties are not eligible. If you're buying to rent the property out, you'll need to meet the lender's standard deposit requirements.

The upfront costs on top of your deposit

Your deposit isn't the only cash you'll need. Moneysmart lists the main buying costs for an investment property as:

Stamp duty
Conveyancing and legal fees, and searches
Building and pest reports

On top of that, allow for loan establishment fees, LMI if your deposit is under 20 per cent, and an emergency buffer. In Moneysmart's own worked example, buying costs on a $550,000 investment property came to $23,000, on top of the deposit. Stamp duty can be a large cost, so check the current rates with the State Revenue Office in the state you're buying in.

Using equity instead of a cash deposit

If you already own a home, you may be able to use the equity in it rather than saving a cash deposit. Equity is the difference between your property's value and what you owe on it.

A common way to estimate usable equity is to take 80 per cent of your property's value (the level above which LMI usually applies) and subtract what you owe. Here's a simple illustration (not a quote or an offer):

Your home is valued at $800,000.
80 per cent of that value is $640,000.
You owe $400,000 on your home loan.
The equity you may be able to access is up to $240,000, subject to the lender's valuation and your ability to afford the repayments.

Using equity can help you invest sooner, but it has trade-offs. Your total debt goes up, and your home is used as security. As Moneysmart warns, if you can't keep up with repayments, you could lose your home. It's also worth asking your accountant how the borrowing should be set up, because the ATO requires interest to be split if a loan is used for both investment and private purposes.

How much deposit do you need for an investment property? Factors that change the answer

The lender's policy

Maximum LVRs differ between lenders and can change over time. Some lenders may be more conservative with certain property types or locations.

Your income and existing debts

Your deposit is only part of the assessment. Under APRA's guidance, banks check whether you could still afford repayments if interest rates were 3 percentage points higher. Since February 2026, banks have also been limited in how much new lending they can do at a debt-to-income ratio of six or more. If you already carry a lot of debt, a larger deposit may help your application.

Your credit history

A clean credit history gives you more options. Missed payments or defaults can narrow your options, especially with a lower deposit.

Your appetite for LMI

Some investors are comfortable paying LMI to buy sooner. Others prefer to save more first. Weigh the cost of LMI against your timeframe and budget.

How to build or unlock a deposit

Save consistently and keep your deposit separate from everyday spending.
Reduce existing debts and credit card limits, which can also help your borrowing capacity.
Review the equity in property you already own, with a clear plan for the extra repayments.
Keep a cash buffer for vacancies, repairs and rate rises, rather than putting every dollar into the deposit.

Frequently asked questions

What is the minimum deposit for an investment property?

There's no single minimum. It's set by each lender's maximum LVR. A deposit under 20 per cent may be possible with some lenders, but LMI will usually apply.

Do I need a cash deposit if I use equity?

Not always. Some investors use equity to cover the deposit and costs. Lenders will still assess whether you can afford the total debt.

Is the deposit different from a home I'll live in?

The LVR principles are similar, but owner-occupier schemes such as the 5% Deposit Scheme don't apply to investment properties, and lenders may set different policies for investment loans.

So, How Much Deposit for an Investment Property Is Right for You?

A 20 per cent deposit for an investment property usually means no LMI and a smaller loan, but some lenders may accept less. The right amount is the one that leaves you with manageable repayments, enough for upfront costs and a buffer for the unexpected.

If you'd like a second pair of eyes on your numbers, here's how TNL Finance can help.

Not Sure How Much Deposit You Need? TNL Finance Can Help You Work It Out

Every investor's numbers are different, and the right deposit depends on your lender, your finances and your plans. TNL Finance is a Melbourne mortgage and finance broker based in Sunshine. We compare investment loan options from 40+ banks and specialist lenders, help you understand how much you may need for the deposit and costs, look at whether equity could play a part, and support your application through to settlement. Our team brings 5+ years of experience in the Australian banking and finance industry.

90% Submission to Settlement Rate: Around 90% of loan applications submitted to lenders successfully proceed through to settlement.
70% Lead to Settlement Rate: Around 70% of initial client leads ultimately proceed through to settlement.

Note: Settlement statistics are based on internal TNL Finance historical client data. Individual outcomes depend on property valuation, current financial circumstances, and specific lender credit policies.

The final lending decision rests with the lender, and you're never obliged to proceed. To work out your next step, get in touch with TNL Finance for a relaxed, complimentary chat.

How Much Deposit for an Investment Property Do You Need in Australia?