Buying your first place feels big, but the path gets clearer once you run the numbers. Most banks want a home loan deposit between 5 and 20%. And the purchase price sets the target.
If you’re looking at a $700,000 property, a 10% deposit comes to $70,000, plus everything from stamp duty to legal fees and other upfront costs that hit before settlement. After you move in, ongoing costs like rates and insurance keep ticking, so plan for those too.
Ask how much deposit suits your income and rent. This is where a borrowing power calculator can be useful so you don’t go into this blind. It won’t promise approval, but it shows whether your goal fits your budget. Let’s get more specific:
Tip 1: Lock a Savings Goal and a Simple Savings Plan
Vague targets are always going to drift – you don’t have that problem with a clear target. We’d suggest you:
- Write down your savings goal
- Pick a date
- Split the number into weekly or fortnightly amounts
Your savings plan can sit in your notes app on your phone or computer – wherever you’ll see it easily. Then just review it each quarter so you can adjust when hours or rent change.
Miss a week? Doesn’t really matter if you restart on the next payday. As with most things, the goal here is just to create a habit rather than perfection.
Start with a smaller milestone to build momentum if the figure feels heavy. Windfalls like a refund or bonus can top it up. You want progress that compounds month after month.
Tip 2: Separate Your Cash so it Actually Grows
Mixing daily spending with long-term saving always ends up muddying the view. So open a separate savings account and don’t touch it. Some people prefer a designated savings account at a different bank so transfers feel less instant. Others keep it where they can see it.
But either way, you want your everyday transaction account to be for bills and groceries. Keep the deposit fund out of reach.
From here, you can start to think about automating the movement (which is simple). Set a direct debit the day after payday so you pay your future self first. And if your employer pays on multiple payment dates, just mirror the automation after each. Doing all this ultimately removes all the emotion and willpower out of physically typing in that sum of money every week, which is how small, regular transfers start stacking up.
Tip 3: Track Diligently
Use your banking app and a few category tags. When a category blows out, just trim the next one so you don’t have to wait months. Again, you’re not trying to spend $0 every day, it’s just about trying to save money without burning out.
For instance, if the app shows you’re spending a lot of money on food or taxis, cap it for a fortnight and see what difference it makes.
And keep an eye out for quiet leaks:
- Subscriptions you forgot
- Delivery fees that sneak in
- Impulse taps late at night
None of this looks dramatic at first glance, but it obviously ends up stacking up.
Tip 4: Park Your Cash Where it Earns More
Choose somewhere to put your deposit where savings accounts actually reward steady behaviour or limited withdrawals. Don’t overthink it. Pick a competitive interest rate you can keep, then review every few months.
If a bank cuts the rate, move. If another lifts, move. Needless to say, paying interest on a credit card balance while your savings sit idle cancels some of the effort, so try to keep high-cost debt low while the deposit grows.
If you already own a place, an offset can help here. If you don’t, a high-interest account or a short term deposit keeps the money safe and accessible. Lower friction, higher yield, fewer excuses to touch the pot.
Tip 5: Use Australian Boosts and Shortcuts
Australia actually offers a few shortcuts that reduce the time it takes to end up with keys in your hand. For instance, the home guarantee scheme supports eligible first home buyers with smaller deposits (often without lenders mortgage insurance), which can save thousands.
The first home owner grant still exists for certain new builds in some states, and you’ll hear people call it the home owner grant even though the formal name varies. Just make sure you always check the current state rules because thresholds and property types move.
These boosts won’t buy the house for you, but they definitely make it look more achievable. If you qualify, they shrink the deposit or open a suburb that once felt out of reach!
Tip 6: Grow the Gap Without Living Miserly
You can lift income without necessarily taking a second full-time job – ask for extra hours, for example. Then put that extra cash into the deposit, not a new pair of trainers! Small changes compound faster than forecasts. Use windfalls for putting money toward the target.
And if your current rent makes this a bit difficult, you could always try getting a shorter lease in a cheaper place or teaming up with a friend. A year of lower housing costs can pull the goal into range.
Tip 7: Decide on Structure: One Account or a Few?
Some people like one pot, but that’s not for everyone. You might keep a main vault and a small buffer for buying costs. That simple structure avoids panic withdrawals. But if you do split, make sure you label things clearly so you don’t confuse the numbers. Your bank may let you nickname accounts, which helps.
House deposit saving improves when your rules are simple. Don’t mingle that account with day-to-day money and you’ll see how the balance rises.
Tip 8: When You’re Close, Tighten Execution
Following on from that previous point, your questions change as your balance grows. You’ll now ask:
- How to reduce LMI
- How to structure the offer
- When to push
It helps at this stage to talk to a broker or lender before you cross the line so pre-approval lands on time.
Redraw can also help, and an offset can help later. Just stay focused on the figure you’ll pay each month and what it does to your loan balance. Naturally, a sharp rate helps, but a competitive interest rate on a loan you can’t service still hurts.
Final Thoughts
If you want to save for a house, you can! Start saving this week, even if the first transfer is small. Keep your rules simple and keep the structure tight. When you’re ready to explore options, use tools that make the process less messy and more direct.
How Upscore Can Help
Keen to get mortgage-ready faster? Create your free Finance Passport with Upscore and compare paths with lenders in one spot:
- Learn how much deposit you need for your situation
- See options that fit your numbers
- Transition more easily from planning to buying your own home
