First home buyers face a decade of saving to muster a deposit
As if house prices aren’t daunting enough, Mozo calculations show those looking to buy a property are in for a decade of squirrelling away their pennies just to afford the average deposit.
In Sydney, that timeline increases to 14 years and one month to save up the average harbour city deposit amount of $154,440. While in Hobart you’re saving for just under seven years to put down the average $63,100 deposit.
RELATED: Ease the squeeze: Three winning weapons for first home buyers
“These figures are based on saving 15% of the average salary in each state which could be hard for those saving for a shorter term goal like travel or a wedding, or paying down existing debts.”
“However, prospective buyers who are willing to forego short term gains and save twice as much, could virtually halve their saving time,” said Mozo Director, Kirsty Lamont.
Time required to save a 20% deposit, based on a $5,000 starting balance:
Capital City | Deposit amount (20% of average dwelling price) | Monthly saving amount | Years to save |
National | $113,000 | $735 | 10 years, 8 months |
Sydney | $154,440 | $741 | 14 years, 1 month |
Melbourne | $112,000 | $701 | 11 years, 1 month |
Darwin | $103,000 | $725 | 9 years, 11 months |
Canberra | $107,000 | $825 | 9 years, 2 months |
Perth | $102,000 | $814 | 8 years, 11 months |
Brisbane | $91,000 | $726 | 8 years, 10 months |
Adelaide | $81,000 | $679 | 8 years, 5 months |
Hobart | $63,100 | $649 | 6 years, 10 months |
Deposit amount calculated from the CoreLogic RPData Home Value Index. Saving amount is 15% of the average after-tax salary in each state. Years to save is based on the average savings account interest rate of 2.32%, with a $5,000 starting balance. As at 17/7/15. |
Lamont said you could speed up the process by moving back home to save as much as possible.
“Based on the average weekly rent in Sydney, moving back home could see Sydney buyers cut six years from their saving time.”
Other tips include:
- Start now, it’s never too early to start saving for your first home.
- Cut back on high everyday costs like transport or rent, consider moving back home or curb your entertainment and eating out costs.
- Look for a better rate of return on your savings balance. Shop around by searching the savings account market and take advantage of bonus or intro offers.
- Consider buying a property with a family member if your circumstances allow.
Mozo property expert, Steve Jovcevksi, adds that a deposit is only the beginning for new home buyers, with a raft of up-front costs to add to the bill.
“Stamp duty, legal costs and fees associated with taking out a mortgage all add up.”
“Ideally prospective buyers should save an extra 20% of their deposit amount to cover all the extras that pop-up after the sold sticker has gone up.”
Home loan comparisons on Mozo - last updated January 16, 2021
Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
Sorted by:
Mozo Order
1.99% p.a.variable for 12 months and then 2.48% p.a. variable
2.47% p.a.
Smart Booster Home Loan
1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
1.99% p.a.variable for 12 months and then 2.48% p.a. variable
2.47% p.a.
A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required.
Go to siteCompare2.34% p.a. variable
2.34% p.a.
UHomeLoan - Discount Offer
Owner Occupier, Principal & Interest
2.34% p.a. variable
2.34% p.a.
Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.
Go to siteCompare2.19% p.a. variable
2.19% p.a.
Celebrate Variable Home Loan
<60% LVR, Owner Occupier, Principal & Interest
2.19% p.a. variable
2.19% p.a.
Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^
Go to siteCompare2.04% p.a.
fixed 2 years2.79% p.a.
Special Offer Reward Me Fixed Rate Home Loan
Owner Occupier, LVR <80%, 300k+
2.04% p.a.
fixed 2 years2.79% p.a.
Enjoy $3,000 cashback when you refinance with Virgin Money (T&Cs apply). Additional repayments up to $10,000 per annum. Reverts to the discounted variable rate on expiry of the fixed term.
Go to siteCompare2.09% p.a.
fixed 2 years2.56% p.a.
Basic Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR 70-80%
2.09% p.a.
fixed 2 years2.56% p.a.
Flexible loan structure – create up to six loan accounts with different rate and repayment types. Free redraw from your loan using Macquarie Online.
Go to siteCompare
^See information about the Mozo Experts Choice Home Loans Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.