How much deposit do you need to flip a house in Australia?

How much deposit do you need to flip a house in Australia? The honest answer is that the deposit is the wrong number to be looking at. It is the one everyone asks about, because it is the one lenders advertise, but on a flip it is only a slice of the cash you actually have to put on the table. Get fixated on the 20% and you will walk into a deal short of what it really takes to get to settlement, let alone to the finish line.

This is a plain-English walkthrough of what a flip actually costs you in cash up front, from the deposit through the costs nobody quotes, so you can work out your real number before you start bidding. General information only, not financial advice, but it is the sum I run before I go near a listing.

The deposit is the smallest number that matters

Start with the deposit itself, because it is the simplest. Most lenders will lend up to 80% of a property's value without charging you lenders mortgage insurance, which kicks in once you borrow more than 80%. So the standard deposit is 20% of the purchase price. On a $700,000 house that is $140,000.

You can put in less. Lenders will go to 90% or even 95% on some loans, which drops the deposit to $70,000 or $35,000, but they add LMI on top, and that premium climbs steeply the higher you borrow: roughly 1% of the loan at 85% and north of 3.5% by 95%. On an investment loan the interest rate is usually a touch higher than an owner-occupier rate too. For a flip, where every month of interest eats your margin, a bigger loan is not free money, it is a bigger holding cost. That is the first thing the deposit question hides: the smaller your deposit, the more the carry costs you while you renovate.

So the deposit is real, but it is the beginning of the cash, not the end of it.

LVR and the short-hold lending quirks

Here is where flipping stops looking like a normal purchase. A standard investment loan assumes you are holding the property for years and renting it out. A flip is the opposite: you are in and out inside six to twelve months, often with no rent coming in, and you are planning to knock the place around before you sell it. Lenders know this, and a few things change because of it.

Some flippers just use an ordinary investment loan and keep quiet about the timeline, which works until it does not. Others use specialist or private short-term fix-and-flip finance, which is built for the job but comes with its own trade-offs: the loan-to-value ratio on the first mortgage is often lower, sometimes around 65%, the rates are higher, and the term is short by design. That lower LVR means a bigger deposit, not a smaller one. The upside is speed and a lender who understands a half-renovated house.

The quirk that catches people is the renovation money. A normal loan lends against what you pay for the house, not against what you are about to spend fixing it. So unless you go to a specialist renovation lender who will consider the finished value, the reno budget comes out of your own pocket. On a short flip that is usually exactly what happens, which means the reno is cash-to-complete, not something the bank covers.

There is a second-order effect here that runs against instinct. On a long-term rental, borrowing more and putting in less is often the sensible play, because the rent covers the repayments and you keep your cash working elsewhere. On a flip there is no rent, the clock is short, and every extra dollar borrowed is a bigger interest bill against a fixed sale date. So a larger deposit is not just about clearing the LMI threshold; it is about keeping the carry small enough that the deal still makes money if the sale runs late.

Cash to complete, not just the deposit

This is the number that actually matters, and it is the one the deposit question skips right past. Cash-to-complete is everything you need in the bank to buy the house, pay the costs, do the work and carry it until the sale lands. Here is what it looks like on that same $700,000 metro flip, borrowing 80%.

The deposit is $140,000. The cash you actually need is closer to $241,500. That gap, over a hundred thousand dollars, is the part that sinks first-timers who budgeted for the deposit and nothing else.

Every line there is a real cost. Stamp duty on a $700,000 purchase in NSW runs about $25,900 on the current Revenue NSW schedule, and it is due at settlement, in cash, not rolled into the loan. Conveyancing typically lands between $1,200 and $3,500, a building and pest inspection between $400 and $800. The reno figure depends entirely on scope, but on a cosmetic-plus job you are spending it yourself. And the holding costs, the interest, rates, water and insurance while you own the place, are their own quiet drain that I have broken down line by line elsewhere. The point of the table is not the exact figures, which will differ for your deal and your state. It is the shape: the deposit is one line out of seven.

So how much deposit do you need to flip a house?

Work it backwards from the cash-to-complete, not forwards from the deposit. The real question is not "can I cover 20%", it is "can I cover the deposit, the buying costs, the whole reno, a realistic holding period and a contingency, and still have a buffer if the sale takes longer than I want". If the answer is no, the deal is too big for your cash, and no amount of squeezing the deposit fixes that. Borrowing more to shrink the deposit just moves the shortfall into your interest bill.

So run your own numbers before you fall in love with a listing. Take the purchase price, add the stamp duty for your state, add your best honest reno estimate, add a realistic six-to-nine-month carry, and add ten percent of the reno as a contingency. That total, minus what a lender will actually advance, is your cash-to-complete. The cleanest way to pressure-test it is to put the deal through the flip ROI calculator with a conservative hold, watch what the costs do to the return, and see the same maths worked end to end on a real deal. If you are still weighing up whether the whole thing pencils, the full guide to flipping a house in Australia puts the cash question in the context of the entire deal.

Get the cash-to-complete right and the deposit stops being the scary number. It becomes what it actually is: the first line of the budget, not the whole of it. And if you want the app doing this sum on your next deal in a few minutes, that is what FlipPro is for.

This is general information only and not financial, tax, credit or legal advice. Lending policy, LVR limits, LMI premiums, interest rates and stamp duty vary by lender, state and your circumstances, and they change over time. The figures here are indicative and current at the time of writing. Confirm your own numbers with a licensed mortgage broker or lender and get independent advice before you buy.

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