Saving for your first home is one of life’s most exciting milestones, but it can feel daunting at the outset. With the right strategies, you can make your dream of homeownership a reality sooner than you might think. Whether you’re just starting your journey or looking to accelerate your progress, here are some practical tips to help you save for a house deposit.
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Set a Clear Savings Goal
Understanding how much you need for a deposit is the first step. In Australia, most lenders require a deposit of 5–20% of the property’s value. For example, if you’re eyeing a $500,000 property, aim for a deposit between $25,000 and $100,000.
Research your desired market, consider additional costs like stamp duty and legal fees, and set a realistic goal based on your financial situation.
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Create and Stick to a Budget
A budget is essential to identify where your money is going and how much you can save.
- Track Your Spending: Use apps or spreadsheets to monitor your expenses.
- Cut Non-Essential Costs: Look for areas to reduce spending, like dining out, subscriptions, or unused memberships.
- Allocate Savings First: Treat savings like a non-negotiable expense and transfer it to a dedicated account as soon as you’re paid.
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Open a High-Interest Savings Account
Consider opening a high-interest savings account or term deposit specifically for your house deposit. These accounts often offer better returns and help you grow your savings faster.
Some banks also offer first home saver accounts with government incentives or bonuses, so explore options available in your area.
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Leverage Government Assistance Programs
The Australian Government offers various schemes to support first-time buyers, such as:
- First Home Owner Grant (FHOG): A one-off payment for eligible first-time buyers.
- First Home Guarantee: Allows eligible buyers to purchase with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI).
- First Home Super Saver Scheme (FHSSS): Use your superannuation account to save for a deposit with tax benefits.
Check your eligibility for these programs and how they can fast-track your savings.
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Cut Back on Debt
Reduce or eliminate high-interest debt like credit cards or personal loans to free up more money for savings. Paying off these debts not only boosts your savings capacity but also strengthens your home loan application.
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Consider Shared Expenses
If you’re buying with a partner, pooling your resources can accelerate your deposit savings. Alternatively, explore co-buying with friends or family members to share the financial load.
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Boost Your Income
If possible, find ways to increase your earnings to save faster.
- Side Gigs: Freelancing, tutoring, or selling unused items online can generate extra income.
- Overtime or Promotions: Seek opportunities to earn more through your current job.
- Tax Refunds: Direct tax returns or bonuses straight into your deposit savings.
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Stay Disciplined and Motivated
Saving for a house deposit requires persistence and patience. Keep your goal front of mind:
- Create a visual savings tracker to see your progress.
- Celebrate small milestones to stay motivated.
- Remind yourself of the long-term reward—a place to call your own.
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Seek Professional Advice
Speaking to a lending specialist or mortgage broker can clarify your savings target and help you understand your borrowing power. They can also guide you on strategies to maximise your savings and prepare for a home loan application.
Start Saving Today
The journey to saving for a house deposit can be challenging, but it’s also incredibly rewarding. By following these tips and staying focused, you’ll be well on your way to unlocking the door to your first home.
When you’re ready to take the next step, our team at LJ Hooker Home Loans is here to help. Contact us today to discuss your options and turn your homeownership dreams into reality.
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.