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How to save for a house deposit – the smart way

When you’re saving up for a house deposit, every little tactic can help. Here are some suggestions for reaching your savings goal.

Work out what you’re saving for

“I’m saving for a deposit on a house.” It’s a common call amongst 20- and 30-somethings.

Generally, most people set a target of saving 20% of the property price (plus extras like stamp duty and conveyancing fees). If your deposit is less than 20%, it’s harder to get a home loan without the extra cost of Lenders Mortgage Insurance (LMI).

Then again, if a larger deposit is out of your reach, you could talk to your lender about other options. A guarantor may be an option for people who don’t have a large enough deposit and want to avoid the cost of LMI.

Just remember, being a guarantor is a big commitment and is something you and your family should think about carefully. If for some reason you default on your loan, your lender could seek to recover money from your guarantor. We recommend that the guarantor gets independent financial and/or legal advice so that they fully understand the risks of entering into a guarantee.

Read more in our article on how much you really need for a house deposit.

Understand your budget

Budgeting sounds incredibly boring, doesn’t it? But it doesn’t have to be that bad.

Use the ANZ Budget Planner to see where your money could be going and how much you’ve got left after you’ve covered key expenses. Then you may need to examine your budget more closely and look for potential ways to save.

Once you’ve done a budget and identified ways you could save, you may be able to set a realistic savings goal.

Stick to your savings goal

With a savings goal in mind – for example, $500 a month – you need somewhere to put this money. Consider saving money by making regular deposits into a separate account that pays interest.

It may be a good idea to transfer the money the day after you get paid to make it hard to get your hands on it. This way, you’re putting money aside for your deposit before you get a chance to spend it.

When it comes time to apply for a home loan, you may need to show the lender a statement from your savings account – proof of how good you are at making regular payments.

 

Reduce other debts

Got a personal or car loan that won’t go away? Or do you juggle a couple of credit cards? You may want to think about paying down (or consolidating) other debt so you can concentrate on saving more.

Tips on how to save a deposit faster

If you’ve got a tight deadline in mind for your house deposit, you may need to make a few more changes. Here are some tips that could help you save faster:

  • move back in with your parents
  • pick up a casual job on top of your current work
  • limit how many times you go out each month
  • make the most of what you’ve got and don’t shop for as many new things
  • go on a road trip instead of flying interstate or overseas for a holiday
  • tip any work bonuses or other windfalls straight into your savings account.

You should also see if you’re eligible for the First Home Owner Grant and first home buyers stamp duty concession (although availability will vary depending on your state or territory).

And, remember, you’re not alone when it comes to saving for a house deposit. There are a lot of people in the same situation.

To sum up

  • To save up for a house deposit, you need to be clear about how much you need to save.
  • Do a thorough budget to identify ways you could save more.
  • One way to save could be setting up a high interest savings account and make regular payments to this account.
  • Consider paying off all other debts if you can.
  • Consider taking bigger steps to save money, like moving in with your parents.

Calculators to help you plan

Savings Calculator

See how long it'll take to save up for your first home.

Home Loan Deposit Calculator

Estimate how much you’ll have for a deposit once upfront costs are deducted.

Repayments Calculator

Estimate what your home loan repayments could be.

Find a First Home Coach to support you

Connect with a First Home Coach who'll guide you through the process of buying your first home ­­ from start to finish.

Talk to a First Home Coach on the phone, or drop in for a chat at one of our ANZ branches.

Find a branch near you1300 295 951

Our First Home Coaches can also come to you, at a time and place that’s convenient.

Any advice does not take into account your personal needs and financial circumstances and you should consider whether it is appropriate for you and read the relevant Terms and Conditions, Product Disclosure Statement and the ANZ Financial Services Guide (PDF, 104kB) before acquiring any product.