Should you wait until you have a 20% deposit?
by RatesBoard · 3 min read
Rates as at 29 Oct 2026
Up will lend 90% of a property's value at 6.20%. Westpac's cheapest variable loan stops at 70% and costs 6.24%. The loan for the smaller deposit is the cheaper one, and it ranks seventh among the 61 variable rates on our board.
Borrowers keep asking whether to wait for a bigger deposit. On r/AusPropertyChat on 28 October, u/Curiousmind-789, buying alone in Adelaide with "around 10% deposit", asked whether to buy now or wait until a 30% deposit made the loan "more safe". The trade is usually put as a worse rate against a bigger deposit.
We read the whole board this morning: 195 products across 31 lenders. Of the 81 products that publish a loan-to-value ratio (LVR) cap, 48 stop at 70% or less and 27 stop at 80%. Six go further, and two of those are variable loans.
| Lender | Product | Max LVR | Advertised | Comparison |
|---|---|---|---|---|
| Bank Australia | Clean Energy (new build) | 90% | 6.13% | 6.46% |
| Up | Home Variable Rate Loan | 90% | 6.20% | 6.20% |
| Heritage | Standard Fixed, 1-year term | 95% | 6.49% | 8.78% |
| Heritage | Standard Fixed, 2-year term | 95% | 6.54% | 8.54% |
| Heritage | Standard Fixed, 3-year term | 95% | 6.54% | 8.32% |
| Heritage | Standard Fixed, 5-year term | 95% | 6.54% | 7.95% |
Heritage's four fixed terms allow 95%, the widest on our board. Their comparison rates sit far above the advertised rate because a fixed loan's comparison rate blends in the revert rate that follows the term.
Lenders mortgage insurance is where the deposit shows up, and it is charged once, when you borrow more than 80% of the property's value. Moneysmart, ASIC's consumer site, says the premium "does not benefit the borrower, it only protects the lender". Its deposit guide adds that you pay the fee at settlement or your lender adds it to the loan.
The Reserve Bank's November 2025 Statement on Monetary Policy puts the premium at "between 1 and 5 per cent of the loan amount". It says the insurance is "typically required for loans where the borrower has a deposit of less than 20 per cent of the property's value". On a $650,000 property with a 10% deposit, the loan is $585,000. One per cent of that is $5,850. Five per cent is $29,250.
Up's rate is 0.04 points under Westpac's 70% loan, which is $234 a year on the same $585,000. The insurance runs from 25 to 125 times the annual interest difference.
Most of the board publishes no cap at all: 114 of the 195 products. You cannot tell from a rate alone whether you qualify, so the question goes to the lender.
LVR is measured against the valuation, not the price you agreed. A $520,000 loan on a $650,000 purchase is 80%. If the bank values the property at $630,000, the same loan is 82.5% and the premium applies.
The government's 5% Deposit Scheme, in force since 1 October 2025, lets first home buyers buy with a 5% deposit without paying the insurance, the Reserve Bank says.
We do not hold insurance premiums. They are priced loan by loan by the insurer, so the 1 to 5 per cent is the Reserve Bank's range rather than a quote for your loan. We track the rate each lender advertises, and the variable board sorts them by rate.
Before you decide to wait, ask two lenders what the premium would be on the loan you would actually take. The rate card barely moves between a 10% and a 20% deposit.
We don't receive commissions or affiliate payments from lenders, and this is general information, not personal advice.