Same $900k NSW purchase: 20% vs 10% deposit cash

Briefing

Deposit percent is a leverage choice, not a duty discount. Stamp duty does not shrink because you chose a thinner deposit. What changes is how much cash goes into the purchase gap, whether mainstream LMI appears, and how large the loan is when you open repayments.

Twenty percent usually targets the mainstream no-LMI line at about 80% LVR. Ten percent often flags LMI and a larger starting balance if the premium is capitalised. Neither path is free — they move cost between settlement day and the life of the loan.

Buyers who thin the deposit “to afford stamp duty” sometimes create a worse total outcome: duty still due, plus LMI, plus higher repayments, plus no cash left for an offset seed. Run both stacks with duty included before you call the thinner deposit clever.

Bank valuation can sit below purchase price and quietly push LVR over a step. Build a buffer into high-LVR plans.

After you pick a path, test repayments and a realistic leftover offset balance. Then read the funds-to-complete and LMI guides so the trade stays conscious.

The decision

Are you protecting LVR (≤80%) or preserving cash for duty and fees?

• 20% usually clears the mainstream LMI line at 80% LVR
• 10% cuts deposit cash but typically flags LMI and a larger loan
• Duty does not shrink because you chose a thinner deposit
• Capitalised LMI raises the starting balance you take to repayments
• Emptying every account into deposit can leave no offset seed

Takeaway

Deposit % is a leverage choice, not a duty discount. If duty already consumes a large cash chunk, thinning the deposit can make the loan side worse without fixing settlement. Run both, then pick consciously. Open repayments with any capitalised LMI included before you decide the thinner deposit “feels fine.”