5 tips for saving money to buy your first home

By Maria Gil · · 3 min read
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Many people dream of one day owning a home, but the task is easier said than done. To get into the Australian property market, most people need a home loan and to do that you need an initial deposit.

Your deposit is determined by the total value of the home you’re planning to buy. Typically, a deposit should be 20% of the purchase price, but there are many lenders who may accept deposits as low as 5%.

The current national average cost of a home sits at $719,209, meaning if you are planning on putting down a 20% deposit you’ll need to save up at least $144,000. When you take into consideration stamp duty and other potential fees, you’ll need even more. Let’s face it, this amount of money makes buying a home challenging for many first time buyers.

But Rome wasn’t built in a day and nor will your deposit accumulate that quickly. So, we’ve compiled a list of five ways to save up for that deposit and with some diligence, you’ll eventually be in a position to buy your very own home.

Make a budget (for reals this time)

The first step of making a budget is documenting all your expenses each month, so you get an idea of where your money goes and discover opportunities to reduce your spending. You can use our nifty budget calculator to get you started.

Once you know where your money is going you might consider cutting things out, including frequent takeaway meals or that TV or gym subscription you never use.  Once you find yourself with extra money, you could put it in a high interest rate savings account for a future home deposit.

Find a savings account with good interest rates

What use is having your home deposit in a bank account if it's not earning you money? Having a savings account with a high interest rate with minimal or no fees will actually earn you some extra cash that will help you reach your deposit goal quicker. That means you could break into the market sooner.

Let go of items you don’t need

If you have unused stuff taking up space in your home, you can sell them online to make some extra dollars. Why not try sites like eBay or Gumtree to sell the items you know in your heart you’ll never use? That exercise machine bought during lockdown and still in its box might be top of the list!

Consider living with your parents (or finding a cheaper place to rent)

While this option might not be ideal for everyone, moving back in with your parents could help you cut back on rent and utilities. A recent Corelogic study found that the average Aussie spends about 29% of their income on rent (not including utilities). Cutting expenses in any way in the short term, could help you reach your deposit goal and be one step closer to home ownership.

Alternatively, you could move to a cheaper suburb or find a cheaper place to rent while you’re saving up money. This mild inconvenience might be worth it once you have the freedom to decorate the walls of your own home.

Check your eligibility for government assistance

As a first time home buyer there are several government schemes to help you get into the property market. There is the First Home Owners Grant (FHOG) scheme which offers a one-off grant that should help towards paying off your home - should you meet the eligibility criteria. Then there is the First Home Super Saver (FHSS) which lets you save up for a deposit by using your super fund.

If you are thinking about buying a home, check out Mozo’s first time buyer guides to prepare for your buying journey. Or if you are close to saving up to your deposit goal, start checking out potential home loans down below.

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 30 October 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

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  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $4,106
    Go to site

    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $4,106
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $4,106
    Go to site

    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $4,106
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    5.89 % p.a.
    Fixed 5 years
    Comparison rate
    6.62 % p.a.
    Initial monthly repayment
    $4,266

  • Variable Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.98 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $4,308
    Go to site

    Competitive variable rate on up to a 30 year loan term. No application fees to pay. Unlimited additional repayments. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.22 % p.a.
    Initial monthly repayment
    $4,359
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Discounted Home Value Loan

    • Owner Occupier
    • Principal & Interest
    • LVR 80-90%
    Interest rate
    6.39 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $4,499

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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