Understanding Deposits for Home & Land Packages in Western Australia

Entering the property market in Western Australia can feel overwhelming — especially when it comes to saving a deposit, getting approved for finance, and deciding whether to build or buy established. But for many first-home buyers, the combination of Keystart finance + a home & land package offers a clearer, faster, and more achievable path to home ownership compared to a traditional bank loan. At Matt Diamond New homes we partner with Keystart lenders for the smarter, faster way for WA buyers to get into their first home.

Why Choose Keystart and a Home & Land Package Over a Traditional Bank Loan?

Buying or building your first home in Western Australia is exciting — but choosing the right finance option can make a huge difference in how quickly you get into your new home. For many buyers, Keystart and Home & Land Package offers a faster, easier, and more affordable path compared to a traditional bank loan. For most Australians, saving a large deposit is the biggest barrier to purchasing a home. Traditional lenders usually want 10–20% of the total home price upfront — often $55,000 to $120,000 for a typical WA house-and-land package.

Keystart and Home & Land Package deposit requirement

• As low as 2%–5%, depending on income and loan type

• No genuine savings history required in many cases

• FHOG ($10,000) can often be used towards your deposit

A $550,000 package may require:

$11,000–$27,500 using Keystarts

$55,000–$110,000 with a bank loan

This allows you to enter the market years sooner.

Keystart Works Seamlessly With Home & Land Packages

Home & land packages are designed for simplicity — and Keystart aligns perfectly with WA’s construction process.

With Keystart, you get:

• A smooth approval pathway for building

• Staged construction payments that match your builder’s schedule

• Flexibility around income types (PAYG, casual, single-parent households, etc.)

• More leniency if you're still rebuilding your financial history

Banks, on the other hand, often have strict criteria for construction loans, making approval harder and slower.

Combine Keystart With Government Grants for Even Lower Costs

When building a new home in WA, you may be eligible for:

• $10,000 First Home Owner Grant (FHOG)

• Stamp duty savings (you only pay on the land, not the build)

• First Home Guarantee (5% deposit, no LMI) — depending on lender

• Regional First Home Guarantee in selected suburbs

• Family Home Guarantee (2% deposit for single parents)

These benefits lower your upfront cost even further — often reducing how much you need to save by tens of thousands of dollars.

Below is a simple breakdown that cuts through the confusion and shows you exactly what to expect.

1. Keystart – WA’s Lowest Deposit Option

Keystart is a WA government-backed lender designed to help people get into the market sooner.

 Minimum deposit: as little as 2%–5%

• 2% for singles and families (depending on income)

• NO Lenders Mortgage Insurance (LMI)

• Lower income requirements

• Ideal for first home buyers and people recovering from financial hardship

Example:

For a $550,000 home & land package:

2% deposit = $11,000

5% deposit = $27,500

This is the most affordable way to get into a new build in WA.

2. Government Help That Reduces Your Deposit

First Home Owner Grant (FHOG) – $10,000

If building a new home, the FHOG can be used to reduce the amount you need up-front. Many lenders will count this towards your deposit.

First Home Guarantee (5% deposit + no LMI)

The Federal Government acts as guarantor so you only need 5% deposit. Applies to:

• New builds

• House & land packages

• First home buyers or returning buyers

Regional First Home Guarantee

If your build is classified as “regional WA,” you may be eligible for:

• 5% deposit

• No LMI

• Extra allocation of places

  
  

Family Home Guarantee (Single Parents)

• 2% deposit

• No LMI

• Can be used for new builds or house & land packages

3. Construction Loan Deposit (Building a New Home)

Most lenders use a specialised construction loan, which releases funds in stages.

For construction loans, many banks accept:

• 5–10% deposit for strong borrowers

• 10% is the most common minimum

• 20% removes LMI costs entirely

Good to know:

The deposit is based on the value of the completed home, not just the land.

Some banks allow the FHOG ($10,000) to contribute toward your deposit.

4. Standard Bank Loan Deposit

For traditional lenders (ANZ, NAB, CBA, Westpac, etc.):

You usually need a 10%–20% deposit

• 20% deposit = no Lenders Mortgage Insurance (LMI)

• 10%–15% deposit = approved if your income is strong (LMI may apply)

For Example:

If your home & land package is $600,000:

10% deposit = $60,000

20% deposit = $120,000

Banks calculate the deposit based on the total package price (land + build contract).

Important Costs to Remember (Not Part of Your Deposit)

Even with a small deposit, there are still a few upfront expenses:

You may need:

• Land deposit (holding fee) – often $1,000–$2,000

• Builder deposit – usually $1,500–$3,000 before final contracts

• Settlement fees

• Siteworks allowances

• Government fees (land transfer, titles)

Most of these can be built into your loan, depending on the lender.

How to Reduce the Deposit You Need

You can lower your upfront out-of-pocket cost by:

• Using FHOG as part of your deposit

• Choosing Keystart for 2–5% deposit

• Using First Home Guarantee to avoid LMI

• Buying in a regional area for additional support

• Selecting a lower-cost land estate or smaller block

• Many WA buyers combine Keystart + FHOG or First Home Guarantee + 5% deposit to get started sooner.

  
  

Final Thoughts: What's the Minimum Deposit You Really Need?

In WA, the realistic minimum deposits are:

• 2% deposit → Keystart

• 5% deposit → First Home Guarantee

• 10% deposit → Standard bank construction loan (most common)

• 20% deposit → Best rates, no LMI

The good news? With all the government help available, most first home buyers don’t need 20% anymore.

Better for First-Home Buyers and Everyday WA Families

Keystart was created specifically to help people who would otherwise struggle to get approved through a major bank.

Keystart is ideal if you:

• Are a first-home buyer

• Are renting and finding it hard to save

• Don’t have a long savings history

• Are a single-income household

• Have had financial setbacks and are rebuilding

• Have moderate income but limited deposit

Keystart looks at your ability to repay, not just the size of your bank account.

You Can Refinance to a Bank Later

This strategy is extremely popular and very effective.

1. Start with Keystart → low deposit, get into your home sooner

2. Build equity over 1–3 years as your home increases in value

3. Refinance to a major bank → secure a lower interest rate

This “entry then upgrade” approach gives you the best of both worlds — speed + long-term savings.

Why Home & Land Packages Offer Better Value

Pairing Keystart with a home & land package gives you long-term benefits that established homes can’t match.

Advantages of building new:

• A brand-new, modern home

• Lower running and maintenance costs

• Energy-efficient design

• Fixed-price building contracts

• Flexible floorplans to suit your lifestyle

• Stamp duty savings

• Higher resale potential

Buying established often means hidden problems, repairs, outdated layouts, and ongoing maintenance — which can cost more over time.

Most WA families don’t have $80k–$100k sitting in savings. But many do have $10k–$25k — which is enough to start with Keystart.

Choosing Keystart + a home & land package means:

• You stop paying dead rent

• You start building equity

• You enter the property market sooner

• You don’t need to wait years to save a 20% deposit

• Your repayments often stay similar to what you already pay in rent

It turns “I wish I could own a home” into “I’m building my home right now.”

Click the button below to find out how Matt Diamond New Homes can support you every step of the way.

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