Buying in Tarneit with less than 20% deposit — a real example

1) Tarneit in 2025 — who this example fits

Tarneit is one of Wyndham's big family suburbs. As at late 2025, house sales in Tarneit cluster around the mid-$600,000s, with a large number of three and four-bedroom homes on blocks between 300m² and 500m². Many buyers here are upgrading from a unit or townhouse closer in, or stepping out of a rental in Laverton, Point Cook or Truganina.

The Tarneit VIC 3029 Property Report digs into medians and trends. This case study zooms in on one very common situation: a couple with a mid-five-figure deposit, decent incomes and a strong preference for a family home in Tarneit rather than a smaller property in inner Melbourne.

It's not a prediction of what Tarneit will do next. It's simply a worked example of how deposit size, lenders mortgage insurance (LMI) and repayments can change the plan.

2) Meet the couple and their starting point

Mia (30) works full-time in healthcare and Jason (32) works in IT support. Their combined pre-tax income is around $155,000 per year. They rent a three-bedroom place in Altona Meadows for $520 per week (about $2,250 per month).

After a few steady years, they've built up $110,000 in savings and offsets. They want a four-bedroom home in Tarneit close to schools, parks and the train. When they look at current listings and recent sales, they keep seeing solid, family-friendly homes around the $650,000 mark.

Their main question for Rate Challenge is:

To answer it properly, we build out two realistic paths and then sanity-check both using lender policy, Tarneit price bands and the Rate Review Calculator.

3) Scenario A — wait for a 20% deposit in Tarneit

First, we model the “textbook” answer: buy a $650,000 Tarneit home with a full 20% deposit and no LMI.

Target budget for a 20% path

Working off a $650,000 price tag:

• Purchase price: $650,000.
• 20% deposit: $130,000.
• Allow roughly $30,000 for Victorian transfer duty and other buying costs (legals, inspections, adjustments).
• Keep at least $15,000 aside as a post-settlement buffer.

All up, that means a savings target of around $175,000. With $110,000 today, Mia and Jason would need to find another $65,000 before they could comfortably tick every box on this 20% path.

Loan size and repayments — 20% deposit

On these numbers:

• Loan amount at 80% LVR: $520,000.
• Assumed owner-occupied principal-and-interest rate: around 6.3% p.a. (illustrative only).

At 6.3% over 30 years, the monthly repayment on $520,000 lands around $3,220 per month. Add a rough allowance of $350 per month for rates, insurance and maintenance, and the total housing outgoings sit near $3,570 per month.

Compared with their current rent of about $2,250 per month, that's a meaningful step up — but with no LMI and a lower interest rate band than many high-LVR loans, it's a tidy structure once they get there.

The trade-offs of waiting

The cost of this path is time and uncertainty. At their current savings rate (around $2,000 per month after rent and living costs), getting from $110,000 to $175,000 could take roughly two to three years. In that time, Tarneit prices could drift sideways, step up, or even pull back.

If prices move up by just 3% per year on average, that $650,000 working figure could be closer to $712,000 in three years. The 20% deposit target then jumps from $130,000 to around $142,000, which means the finish line keeps moving.

4) Scenario B — buy sooner with 10% deposit and LMI

Next, we look at whether Mia and Jason can sensibly buy sooner with a 10% deposit and LMI, using their existing savings as at today.

Reworking the $110,000 they already have

Instead of chasing 20%, we rebuild the plan like this:

• Purchase price still modelled at $650,000.
• 10% deposit: $65,000.
• Approximate VIC transfer duty and costs: $30,000 (after first-home concessions; this is a rounded working figure only).
• Cash buffer kept aside: $15,000.

That uses their $110,000 constructively without wiping them out. The key difference is that they are now over 10% deposit, not 20%, so LMI comes into play.

Loan size, LMI and repayments — 10% path

On these numbers:

• Base loan amount at 90% LVR: $585,000.
• Assumed LMI premium: roughly 1.8% of the base loan, or about $10,500 (actual premiums vary by lender and product).
• Mia and Jason choose to capitalise the LMI, so it is added to the loan rather than paid from cash.

That gives a total loan size of roughly $595,000. If we assume a slightly higher owner-occupied rate of around 6.5% p.a. to reflect the higher LVR band, the principal-and-interest repayment over 30 years is approximately $3,760 per month.

Add the same $350 per month allowance for rates, insurance and maintenance, and their total monthly housing outgoings are around $4,110 per month.

How does that compare to today?

Right now they are paying about $2,250 per month in rent. Moving to a 10% + LMI purchase in Tarneit increases their monthly housing spend by roughly $1,860, but it also replaces rent with loan repayments that gradually build equity and secures the move to Tarneit sooner.

The key question is not whether this number is objectively “good” or “bad”. It's whether an extra ~$430 per week, on top of everything else in their budget, leaves them with a sensible buffer and lifestyle. That's where a broker and an accountant come in.

5) 5%, 10% and 20% deposits — side-by-side on a $650k Tarneit home

To make the trade-offs clearer, here is a simplified snapshot of how 5%, 10% and 20% deposit paths might look on the same $650,000 Tarneit home. The numbers are indicative only and rounded for readability.

*Savings targets assume a mix of deposit, buying costs and a modest buffer. **Repayments use rounded owner-occupied P&I rates between 6.3% and 6.7% p.a. over 30 years. Actual bank pricing, scheme eligibility, duty and LMI will vary by lender, product and your exact situation.

In practice, we would run these scenarios through multiple lenders and compare them using the Rate Review Calculator, then overlay Mia and Jason's real budget to see which structure they can live with.

6) What Mia and Jason actually chose (and why)

After working through the numbers with Rate Challenge and their accountant, Mia and Jason decided to target the 10% deposit path, but not jump immediately.

Instead, they:

• Committed to boosting their savings from $110,000 to $120,000 over the next six months to pad the buffer.
• Used the Tarneit property report to focus on specific pockets and price brackets rather than chasing every listing.
• Obtained a pre-approval with one of the sharper 90% LVR lenders from Rate Challenge's 35+ lender panel.

Six months later, they purchased a four-bedroom home in Tarneit for $642,000. Their loan settled just under $590,000 after LMI, with repayments broadly in line with the 10% scenario.

The plan from here is simple:

• Keep their offset and savings habits going so they have a decent buffer if rates move.
• Review the loan structure every 18–24 months using the Rate Review Calculator and the Refinance Tarneit page.
• Consider switching to a sharper 80% LVR product once their equity position and valuations support it.

7) When each path fits — and when to hit pause

The goal of this case study isn't to crown 10% deposit loans as “better” than 20%, or vice versa. It's to show the shape of the trade-offs.

A 5% deposit path might suit you if:

• You qualify for a government guarantee scheme or shared equity program that reduces or removes LMI.
• Your income and budget stay strong even with repayments north of $4,000 per month.
• You have a stable job and are comfortable with higher leverage to get out of the rental market sooner.

A 10% deposit path, like Mia and Jason's, can fit when:

• You have time to build a six-figure deposit but don't want to chase a moving 20% target while Tarneit grows around you.
• You're okay paying LMI as a one-off cost to accelerate the move, knowing you can refinance later.
• Your lifestyle still works after stress-testing repayments at higher rates.

A 20% deposit path generally works best when:

• You value lower repayments and no LMI more than getting into Tarneit as soon as possible.
• You can realistically hit the 20% target in a reasonable timeframe without sacrificing everything else.
• You're comfortable with the risk that prices may drift while you save.

If all three options feel tight once the real numbers go in, that's often a sign to pause, build a bigger buffer and keep renting strategically a little longer.

8) Next steps, calculators and Tarneit-specific help

If you're Tarneit-curious and want to see where your own numbers land, a good next step is to replace guesswork with a simple, structured plan:

Step 1: Pull together your income, current rent, living costs and savings balance, then sanity-check your budget.
Step 2: Read through the Tarneit VIC 3029 Property Report so you know what price brackets and pockets you're aiming at.
Step 3: Run 5%, 10% and 20% deposit scenarios through the Rate Review Calculator or speak with us about using other tools.
Step 4: Read the broader Home Loan Guide so you understand the moving parts beyond just the interest rate.
Step 5: Work with a broker who understands both Tarneit and the rest of Melbourne, and who can explain the trade-offs between different deposit and lender options in plain language.

Rate Challenge compares 35+ lenders and works with buyers across Tarneit, Wyndham and the wider Melbourne corridor. The Mortgage Broker Tarneit page and the broader Mortgage Broker Melbourne hub give you more context on local pockets, commuting and lender appetite.

When you're ready to test your own plan, use the form above or head straight to Contact Rate Challenge. A short conversation can give you a much clearer view of what's possible.