10 tips for saving your house deposit

Amongst the excitement of planning for your first home, the amount needed to get your foot in the door can seem daunting. Saving for a house deposit remains one of the biggest hurdles to entering the property market for many Australians. 

Here are our top 10 tips to help you tackle the deposit saving challenge and get closer to your home ownership dream.  

1. Do your research

Before you get started, gain a clear picture of your current situation and future goals.  

You will need to consider: 

• Recent sales prices for the types of properties and suburbs you are interested in.  
• Broadening your search to include suburbs outside of your preferred area, or different types of properties available, such as townhomes, apartments and off the plan products. 
• The must-haves and nice-to-haves for your future home.
• Any current savings you have as a starting point.   

After some initial research, it is a good idea to meet with a mortgage broker to help you determine your borrowing power and the home loan products that might be suitable for you.   

Generally, aiming for a 20 per cent deposit can give you a greater range of home loan products, while saving you on Lenders Mortgage Insurance (LMI). However, there are other options available such as low deposit home loans.  

Your broker can work with you to find the right solutions for your unique circumstances, explain how different loans work and their features, and support  you through the process from application through to settlement.  

3. Get a helping hand 

To help you get started on your property journey sooner, you may be eligible for Government assistance such as First Home Owner Grants, stamp duty concessions, and the First Home Super Saver Scheme.  

We have put together a handy eBook especially for first home buyers, which includes an overview of the grants available in your state.  Keep in mind that grants and concessions vary between states and territories and are subject to change, so it is important to keep up to date with the latest conditions and criteria.   

Our Cedar Woods Sales Managers are the experts in buying or building a new home and are available to answer any questions you may have about the process.  

4. Set SMART goals 

Research shows that having a specific goal to focus on increases our chances of success, and writing it down boosts our chances by more than 30 per cent*.  

When setting your money goals, it may help to follow the SMART goals theory – ensuring your goal is Specific, Measurable, Achievable, Relevant and Time-bound.  

To determine your SMART deposit savings goal, remember to factor in not only the home deposit but also the associated costs of purchasing a house, which may include stamp duty and moving costs.  

With your savings goal front of mind, the next step is to map out exactly how you are going to get there.   

It can help to break this down into smaller weekly or monthly savings goals and form a plan for how much you will save on a regular basis to achieve these. Mini-goals can be less overwhelming and help you stay motivated and on track.   

6. Use finance tools 

Set up a separate savings account if you don’t have one already. From here you can automate your savings and stick to your gameplan.  

Your bank may also have handy online budgeting tools, or functions within your app to track exactly where your money is going.  

7. Get budget savvy 

To boost your savings potential, review your budget and get ruthless. Look for anything that you may be able to cut from your budget, as even small changes can add up over time. 

Maybe you have six different streaming services you don’t need, a barely used gym membership, or can reduce your takeaway meals.  

Rather than looking at it as going without, remember the bigger picture. Budgeting will not only fast-track your deposit savings, it will also set you up to manage your home loan repayments and costs of home ownership in the future.  

8. Bring down your bills 

Look for easy ways to reduce your bills, for example: 

• Buying on-special or bulk items at the grocery store.  
• Saving energy by turning off appliances when not in use and reducing your heating and air-conditioning use where possible. 
• Finding opportunities to reduce your car use, such as walking or cycling.  

9. Look for other income sources  

As well as reducing the money going out, consider whether there are any avenues to boost the money coming in. You may be in the position to pick up additional shifts at work, or explore additional means of income. 

10. Reward yourself 

Sticking to a goal such as saving your house deposit can be challenging so it is important to reward yourself along the way for reaching savings milestones. There are plenty of ways to do this without blowing your budget, but self-reward is a great way to keep yourself motivated and on track.   

Saving your home deposit is a big task but keeping focused and taking steps towards your goal are key to long-term success.    

Eager to research more about buying or building your first home? Download our handy First Home Buyer eBook which will help you understand what is next.

* Matthews, G. (2015). Goal Research Summary. Paper presented at the 9th Annual International Conference of the Psychology Research Unit of Athens Institute for Education and Research (ATINER), Athens, Greece.