Do you really need a 20% deposit to build a house in Perth?

One of the biggest misconceptions among Perth first home buyers is that you need to save a 20% deposit before you can build a home.

While a larger deposit can have benefits, it isn’t always a requirement. Depending on your financial circumstances, lender requirements and eligibility for government assistance, you may be able to enter the property market with a much smaller deposit.

Understanding your options can help you take the next step towards home ownership sooner than you might think.

Why do people think they need a 20% deposit?

Traditionally, a 20% deposit has been seen as the benchmark because it allows buyers to avoid paying lenders mortgage insurance (LMI).

However, many lenders offer home loans with smaller deposits. This means that while a 20% deposit may reduce some borrowing costs, it isn’t the only pathway to building a home.

For many buyers, waiting years to save a larger deposit could mean missing opportunities in Perth’s property market.

How much deposit do you actually need?

The amount you’ll need depends on several factors, including your lender, your income, your borrowing capacity and the type of home loan you choose.

Some buyers are able to purchase with deposits as low as 5%, while others may choose to save more to reduce their loan amount and ongoing repayments.

Speaking with a mortgage broker or lender can help you understand which options are available based on your personal circumstances.

Government support for eligible WA first home buyers

Eligible first home buyers in Western Australia may be able to access government grants and stamp duty concessions that can help reduce the upfront cost of buying or building a home.

These initiatives are designed to make home ownership more accessible and may help some buyers enter the market sooner than expected.

Before making any decisions, it’s worth checking the latest eligibility requirements and speaking with a finance professional.

Don’t forget the other costs

Your deposit is only one part of your overall budget.

When planning to build a home in Perth, it’s important to consider additional expenses such as site works, settlement costs, loan establishment fees, moving costs and any upgrades you choose during the pre-construction process.

Having a clear understanding of these costs will help you budget with confidence and avoid unexpected surprises.

Building may be more achievable than you think

Many Perth first home buyers are surprised to discover that building can be a more affordable option than purchasing an established home.

House and land packages in Perth’s growing suburbs can offer excellent value, while a new home also provides the benefits of modern design, improved energy efficiency and lower maintenance costs.

Combined with available government assistance for eligible buyers, building may be more achievable than you initially thought.

Speak with the right experts

Buying or building your first home can feel overwhelming, particularly when it comes to understanding finance.

Speaking with an experienced builder, mortgage broker or lender can help you understand your borrowing capacity, estimate your upfront costs and determine the deposit you’ll need to achieve your home ownership goals.

The more information you have, the easier it will be to make confident decisions.

How Aveling Homes can help

At Aveling Homes, we work with first home buyers every day and understand that everyone’s financial situation is different.

Our team can guide you through the building process, explain your options and help you explore house and land packages that suit your budget and lifestyle. We can also connect you with trusted finance specialists who can help you better understand your borrowing options.

Final thoughts

Saving for a home deposit is an important milestone, but you don’t always need a 20% deposit to start building your future.

By understanding your finance options, researching the assistance available to eligible first home buyers and planning your budget carefully, you may be able to begin your home ownership journey sooner than you expected.

If you’re considering building a home in Perth, speaking with an experienced builder is a great place to start.