When I first tried to wrap my head around building, I assumed the deposit question would have one clean answer, like "you need X percent." In reality, it's more like a layered cake: there's the lender's deposit expectations, the builder's payment schedule, and the separate cost of buying the land. In WA and Victoria, the "typical" deposit you need depends on whether you're buying land first, doing a house and land package, and what your lender will approve, but I can share how I think about it in a way that makes planning less stressful.
Most people talk in percentages like 5 percent, 10 percent, or 20 percent, and that's a useful starting point because lenders often price loans and insurance around those numbers. But when you're building, the cash flow timing matters as much as the total. You might need money for the land deposit up front, then your build costs are drawn down in stages, which means you're not paying for everything on day one, but you do need buffers for the pieces that won't be covered or that come earlier than you expect.
Here's the step-by-step method I recommend to friends, and it's surprisingly calming because it turns "deposit panic" into a checklist:
1) Work out land deposit and land settlement costs separately from the build. Treat land as its own transaction first.
2) Ask the builder what initial deposit is required to sign the building contract, and when it's due. Confirm it in writing.
3) Create a "non-loanables" bucket. This is for things that often sit outside the building contract: upgrades you choose late, utility connections, driveways, fencing, landscaping, blinds, and moving costs. If you don't budget these, you can have a beautiful new home that feels unfinished for months.
4) Add a contingency buffer. I like 5 to 10 percent of the build-related extra costs, not because I expect disaster, but because something always shifts: soil classification, council requirements, or a change you didn't know you needed until you saw the frame go up.
A personal note: a friend in Victoria got caught by the timing between land settlement and build commencement, and he had a month where he felt like he was paying for lots of "nothing." The fix was just better sequencing and a buffer, but he wished he'd known that earlier. That's why I'm big on mapping the timeline as well as the totals.
As I was looking into it, I found
a useful page that could be worth your time.
On a related note, if you can walk into the process with a written cash flow plan and a buffer, you'll feel in control even if the numbers are similar to everyone else's.
