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5 things you can do to save for a house deposit

Last updated: 16 October 2020

Purchasing a property is one of the biggest financial commitments you’ll make in your life and saving for your house deposit could take years. But, with the right savings habit and financial knowledge, you may be able to hand over a deposit sooner than you think.

If you’re thinking of buying your first home or investing in a property, the Credit Savvy Team have put together some tips to help you save for your house deposit faster.

1. Work out what you can afford

The first step is to get your finances sorted and work out what home loan you can comfortably afford and the required deposit amount.

If you need help crunching those numbers, you can try out our mortgage borrowing calculator to get a rough guide to how much you might be eligible to borrow.

2. Prepare a budget plan

To provide a clearer view on what your finances look like and how much you can realistically save for your deposit, it’s important to work out what money you have coming in and going out each month.

Review your spending habits and look into your expenses to identify areas you can cut back on to help you save. Once you know where every dollar is going, you’ll have a pretty good idea of how much extra money you can put towards your deposit. You can check out CommBank’s Budget Planner to help you organise your budget.

3. Get on top of your debts

If you have multiple debts, it’s important to pay them off first before you start saving for a house deposit. You can consider consolidating them into one debt consolidation loan to help you manage your repayments better. Also, the fewer debts you have, the better your home loan application may look to lenders.

4. Find ways to boost your savings

For most people, rent is probably one of the largest regular expenses. If you’re currently renting, you can consider moving back with your family to allow you to build your deposit faster.

If you own a car that’s constantly eating away your hard-earned savings, you could consider selling it or downgrading to a less expensive car that’s easier to maintain.

It’s important to also consider where you store the money for your deposit. There are many high interest savings accounts in the market so make sure the money you do save is earning a competitive interest rate.

5. Consider government support

The Australian Government provides various assistance schemes to encourage first home buyers to get into the property market. The First Home Loan Deposit Scheme (FHLDS) that came into effect at the start of this year, allows first home buyers to purchase a property with as little as 5% deposit without the need to take out lenders mortgage insurance (LMI).

For property investors, some states and territory governments provide incentives such as granting stamp duty concessions. To find out what assistance is available, you can check with your state government’s revenue department for eligibility details.

If you want to learn more about the home buying journey, you can visit our Learning Hub for more articles.

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