How Can First-Time Home Buyers Save for a Deposit Faster?

Key Takeaways

• Setting a clear savings target and breaking it into smaller goals makes saving for your deposit less daunting.
• Using a dedicated savings account, automating deposits, and reviewing your budget can help you save faster.
• Government schemes, side hustles, and creative living arrangements can all boost your deposit.
• Reducing high-interest debt and making the most of windfalls will help you reach your goal sooner.
• Expert advice and flexibility in your property search can make the journey smoother and less stressful.

Your Guide to Saving for a Home Deposit in Australia

Saving for your first home deposit can feel overwhelming, but with the right strategies and support, you can turn your dream of home ownership into a reality sooner than you think.

Buying your first home is a major milestone, but for many Australians, the biggest hurdle is saving for that all-important deposit. With property prices rising and the cost of living stretching budgets, it can feel like an uphill battle. The good news is, there are practical strategies and smart habits that can help you reach your savings goal sooner, without sacrificing your lifestyle or peace of mind.

At Mountway Finance, we understand the challenges first home buyers face. We’re here to guide you through every step, from your first savings plan to the moment you get your keys. Here’s our comprehensive guide to saving for a deposit faster, so you can move into your dream home sooner.

Set a Clear Savings Target

Before you start, it’s important to know exactly how much you need. Most lenders require a deposit of at least 5 to 20 per cent of the property’s purchase price. For example, if you’re aiming for a $600,000 home, a 10 per cent deposit would be $60,000. Don’t forget to factor in extra costs such as stamp duty, legal fees and moving expenses.

Once you have a target, break it down into monthly or fortnightly goals. This makes the process less daunting and helps you track your progress. There are plenty of online calculators that can help you work out how much you need to save each pay cycle.

Create a Dedicated Savings Account

Keeping your deposit savings separate from your everyday spending money is one of the simplest ways to avoid temptation. Consider opening a high-interest savings account or an offset account linked to your everyday banking. Some accounts even offer bonus interest if you make regular deposits and avoid withdrawals.

Automate your savings by setting up a direct debit on payday. Treat your deposit like a non-negotiable bill, pay yourself first, then budget with what’s left.

Review Your Spending and Make a Realistic Budget

It’s easy to underestimate how much you spend on little things, like takeaway coffees, streaming subscriptions or spontaneous online shopping. Take a close look at your bank statements and identify areas where you can cut back, even if only temporarily.

A realistic budget doesn’t mean cutting out all the fun. Instead, prioritise what matters most and look for small changes that add up over time. For example, swapping a few dinners out for home-cooked meals or switching to a cheaper phone plan can make a noticeable difference.

Take Advantage of Government Schemes

There are several government initiatives designed to help first home buyers get into the market sooner. The First Home Super Saver Scheme (FHSSS) allows you to make voluntary contributions to your superannuation, which you can later withdraw to use as a deposit. This can offer significant tax benefits and boost your savings.

Other schemes, such as the First Home Owner Grant and the Home Guarantee Scheme, can reduce the amount you need upfront or help you avoid costly lenders mortgage insurance. Eligibility criteria vary by state and territory, so it’s worth checking what’s available in your area.

Consider a Side Hustle or Extra Income

If your current income isn’t enough to reach your savings goal in your desired timeframe, consider ways to earn a little extra. This could be anything from freelancing, tutoring or rideshare driving to selling unused items online.

Even a few hundred dollars a month can make a big difference over a year or two. Just remember to keep your extra earnings in your dedicated savings account, so you’re not tempted to spend them.

Reduce or Eliminate High-Interest Debt

Credit card balances and personal loans can eat into your ability to save. High-interest repayments not only reduce your borrowing power but also make it harder to build your deposit.

Focus on paying down these debts as quickly as possible. If you’re struggling, consider consolidating your debts or speaking to a financial adviser for support. Once your debts are under control, redirect those repayments straight into your deposit fund.

Get Creative with Living Arrangements

Many first home buyers choose to move back in with family or share with housemates to reduce living expenses. While it might not be your long-term plan, even a year or two of lower rent and bills can supercharge your savings.

If moving isn’t an option, consider renting out a spare room or listing your property on short-term rental platforms. Every little bit helps, and the extra income can go directly towards your deposit.

Make the Most of Windfalls

Tax returns, work bonuses and gifts from family can all give your deposit a healthy boost. Rather than spending these windfalls, deposit them straight into your savings account. It’s a quick way to get ahead without changing your day-to-day habits.

Some first home buyers also receive financial help from parents or relatives. If you’re lucky enough to have this support, make sure you understand the implications for your loan application, lenders may require a “genuine savings” history, so it’s important to show consistent saving as well.

Shop Around for the Best Savings Products

Not all savings accounts are created equal. Compare interest rates, fees and bonus conditions to find the best home for your deposit. Some banks offer special accounts for first home buyers, with features designed to help you reach your goal faster.

It’s also worth reviewing your everyday banking products. Switching to a no-fee account or negotiating a better deal on your credit card can free up more money for your deposit.

Stay Motivated and Celebrate Milestones

Saving for a deposit is a marathon, not a sprint. It’s normal to feel discouraged at times, especially if your goal seems far away. Set smaller milestones along the way and celebrate your progress, whether that’s reaching your first $5,000 or sticking to your budget for three months straight.

Share your goal with friends or family who can support and encourage you. Some people find it helpful to create a vision board or use a savings tracker app to stay focused.

Seek Expert Advice Early

The home buying process can be complex, and every buyer’s situation is unique. Speaking to a mortgage broker or financial adviser early on can help you understand your options, avoid common pitfalls and create a tailored savings plan.

At Mountway Finance, we’re here to answer your questions and guide you through every step. We can help you assess your borrowing power, explain the latest government schemes and connect you with the right lenders for your needs.

Be Flexible with Your Property Search

Sometimes, adjusting your expectations can help you get into the market sooner. Consider looking at different suburbs, property types or even smaller homes as a stepping stone. Getting your foot on the property ladder is often the hardest part, once you’re in, you can build equity and upgrade over time.

Keep an open mind and focus on what’s most important to you. Remember, your first home doesn’t have to be your forever home.

How Mountway Finance Can Help

Saving for a home deposit can feel overwhelming, but with the right plan and support, it’s absolutely achievable. By setting clear goals, making smart choices and taking advantage of every opportunity, you can reach your target faster and start your journey to home ownership with confidence.

At Mountway Finance, we’re passionate about helping first home buyers succeed. If you’re ready to take the next step, or just want some friendly advice, get in touch with our team today. We’re here to help you every step of the way.