How to Save for A House Deposit - 6 Saving Tips

Saving for a house deposit is both exciting and daunting. For many Australians, buying a home is an important life milestone; the latest ABS stats show that homeowner rates were at 66% in 2019-20.

However, there’s no getting around the fact that getting on the property ladder seems more difficult than ever. Rising interest rates, high demand, low supply, and high prices in major metro areas mean that many of us aspiring homeowners have the odds stacked up against them. So, how do you save for a house deposit?

When saving enough money for a house deposit, there are a few hurdles you will need to overcome. The first hurdle is estimating how much your deposit will be. Generally, a deposit is at least 20% of the cost of the property, but this can depend on your credit score and lender.

From there, you can start figuring out ways to save the amount for the deposit. In this article, we’ve put together six saving tips to help you put down a house deposit efficiently and effectively.

1. Determine the saving goal

Saving for a house deposit (or anything, really) starts with a realistic budget and time frame to achieve the saving goal. Factor in all your expenses (not just the deposit) for buying a house, like stamp duty, conveyancing fees, insurance, strata, and land tax. With a better understanding of the total costs involved in saving for a house (not just the purchase price), you can determine if it is a realistic goal and set a timeline to save for that amount.

2. Research potential properties

Property prices can change dramatically depending on location, size, and your preferences, like the number of rooms, parking, and nearby amenities. Be sure to take the time to research the type of home you’re looking to buy, average house prices, and fluctuations in your local market To get an idea of how much the home will cost, look up listings online, visit open houses, and talk to real estate agents - do your due diligence!

3. Research applicable grants

If you’re buying your first home, you may be able to get help from the government.

New South Wales (NSW)

First Home Owner (New Homes) Grant: $10,000, depending on the value of the purchase.
Stamp duty exemption: Up to $800,000 for new or existing properties.
Concessions: For properties valued up to $1 million.

Victoria

First Home Owner Grant (FHOG): $10,000 for new homes valued at up to $750,000.
Stamp duty exemption: Up to $600,000 for new or existing properties.
Concessions: For properties valued between $600,001 and $750,000.

Queensland

First Home Owner Grant: $30,000 for new homes.
Stamp duty exemption: Up to $700,000 for new or existing properties.
Concessions: For properties valued up to $350,000.

Western Australia

First Home Owner Grant (FHOG): $10,000 for new homes.
Stamp duty exemption: Up to $450,000 for new or existing properties.
Concessions: For properties valued between $450,001 and $600,000.

South Australia

First Home Owner Grant: $15,000 for new homes.
Stamp duty exemption: Up to $650,000 for new or existing properties.
Concessions: For properties valued up to $700,000.

Tasmania

First Home Owner Grant (FHOG): $30,000 for new homes.
Stamp duty exemption: Up to $750,000 for new or existing properties.
Concessions: For properties valued up to $600,000.

Northern Territory

HomeGrown Territory Grant: Up to $50,000 for new homes.
First Home Owner Grant (FHOG): $10,000 for established homes.
FreshStart New Home Grant: Up to $30,000 for previous homeowners purchasing new properties.

Australian Capital Territory (ACT)

Home Buyer Concession Scheme: Up to $34,270 for new and established homes. Eligibility is based on income and property value.

4. Run the numbers

You’ll want to look at your current savings and spending habits to understand when you can put down a deposit. Estimate and compare your monthly income and expenses, and check your account balance regularly. This will provide a clear picture of how much you spend on necessities, like medical bills or car expenses, and how much you spend on luxuries, like daily coffees and holidays. This process will highlight if you need to make any sacrifices on luxury costs and what necessary spending you will need to factor in - especially as you’ll need to be thinking about mortgage repayments.

5. Set a weekly budget

Once you have an idea of your finances, home deposit goals, and the surrounding costs, create a weekly budget. With a weekly budget in mind, you can divide your income into needs (50%), wants (30%), and savings (20%). Adjust the percentages depending on your income and savings goals. Putting together a weekly budget will help you keep your goals at the forefront – making it easier for you to reach them.

6. Review your expenses

To ensure your savings are growing steadily, review your expenses and see where you can cut down. If you’re spending regularly on non-essentials like daily coffees, weekly cinema outings, or ordering food delivery instead of pickup – you could be hindering your savings from growing. When you look at your savings, see where you’re spending money and intentionally cut down where you can.