How much deposit do I need to build a new house in Melbourne in 2026?

Standard construction loan needs 20% deposit of the total project (land + build). With Lenders Mortgage Insurance (LMI) you can go to 10% or even 5%. First-home buyers can stack the $10,000 First Home Owner Grant + Homebuyer Fund (up to 25% shared equity) + stamp-duty exemption on properties under $600,000 to enter the market with as little as 5% deposit. Total upfront cost on an $850,000 house-and-land package can be as low as $45,000-$55,000 for a qualifying first-home buyer.

Melbourne Deposits + Finance 2026

How Much Deposit Do I Need For A New Build In Melbourne?

Name: BuildPilot Adelaide Building Industry Dataset
Creator: BuildPilot
License: https://buildpilot.com.au/terms

The 20% construction-loan standard, LMI options, FHOG + Homebuyer Fund + stamp-duty concessions that lower your deposit in Victoria.

Talk to BuildPilot Melbourne 1300 885 919

By George Giannakakis · B.Arch.Studies · M.Arch (UniSA) · RLA300580

Last reviewed: 5 March 2026 · How we research

Standard 20% deposit maths

A typical Melbourne outer-growth house-and-land package of $850,000 needs $170,000 deposit + $8,000-$14,000 stamp duty on the land + $6,000-$10,000 building/planning permits + $6,000-$12,000 legal/conveyancing/loan fees. Total upfront cash needed: roughly $195,000-$210,000. Doable but stretches most first-home buyers to breaking point.

LMI - the 10% or 5% path

Lenders Mortgage Insurance lets you borrow up to 90% or even 95% of the total project cost. LMI itself costs $8,000-$28,000 depending on loan size and LVR - added to your loan, not paid upfront. Reduces your deposit requirement dramatically. Downside: you're paying to insure the LENDER against your default, not you. Compare against Homebuyer Fund + Home Guarantee Scheme before defaulting to LMI.

First-home buyer stacking - Victoria 2026

First Home Owner Grant (FHOG): $10,000 for new builds under $750,000 in Victoria. First Home Buyer Stamp Duty Exemption: full exemption on homes to $600,000, concession to $750,000. Homebuyer Fund: Victorian government shared-equity scheme - contributes up to 25% (35% Aboriginal) of the price in exchange for equivalent equity share, deposit as low as 5%. Home Guarantee Scheme: federal - lets eligible first buyers avoid LMI with 5% deposit. Check current eligibility on sro.vic.gov.au and homebuyerfund.vic.gov.au.

How construction loans actually pay out

A construction loan does not pay the full amount up-front. Funds release in "progress payments" as the build hits stages: slab, frame, lock-up, fixing, completion. You pay interest only on the drawn amount during the build, then convert to a standard P&I loan at handover. Your deposit sits in the loan account and gets drawn first. Ask your broker for a Victorian construction loan specialist - the process differs slightly from a standard mortgage.

Frequently asked

Can I use my superannuation to build in Melbourne?

Yes, via the First Home Super Saver Scheme (FHSSS) - contribute up to $50,000 in voluntary contributions to super and withdraw for a first-home deposit. Federal scheme, applies to Victoria. Only works if you contribute BEFORE deciding to buy - talk to your accountant well in advance.

Does the deposit include stamp duty on the land?

No - stamp duty is separate and paid within 30 days of land settlement (before the build even starts). On a $400,000 Melbourne outer-growth land block, standard stamp duty is roughly $16,000-$22,000. First-home buyers get full exemption if the total dutiable value is under $600,000 - a huge saving. Check the SRO stamp duty calculator (sro.vic.gov.au) for your specific numbers.

What is the Homebuyer Fund and am I eligible?

The Victorian government Homebuyer Fund contributes up to 25% of the purchase price (35% for Aboriginal / Torres Strait Islander buyers) as shared equity - you pay it back when you sell, with no interest and no rent. Eligibility: annual income under $135,155 single / $216,245 couple (2026 caps), first home, live-in owner, under specific price caps by region. Full detail at homebuyerfund.vic.gov.au.