Tips for saving your home deposit

Saving for a deposit is often the biggest hurdle to home ownership. 

At Keystart, we offer home loans with deposits from as low as 2%, to help you get into your own home sooner. 

Creating a plan and implementing savings strategies can help you achieve your deposit requirement. We’ve put together some savings tips to help you on your journey. 

1. Set a savings goal and budget

Determine how much money you need to save for your home deposit. You can use our How much can I borrow tool to calculate your borrowing power. If you have a preferred suburb in mind, get an idea of how much house or land prices are and calculate how much your repayments would be. You may also qualify for the first home owners grant which is currently valued a $10,000 and at Keystart you can put it towards your deposit. There is also a government initiative called the First Home Super Saver Scheme, allowing you to save for the deposit for your home within your super.

2. Pick an app and track your spending

Work out how much you spend each week, including rent, food, gas, water, power and phone bills, credit card and other debt payments, clothes, petrol, insurance, entertainment, and an amount for unexpected bills. Deduct this amount from your wage and the rest can be your savings. There are some excellent budgeting apps out there to help you track your spending habits. Seeing your spending trends can be a big eye-opener to find out where your money is really going. Canstar's review of budgeting apps.

3. Make changes that’ll have a big impact

Some changes to your usual spending habits will make a bigger difference than others. For example,

• Write out a meal plan for the week and your grocery list. This will help you avoid buying random items and reduce the chances of impulsive spending on takeouts.
• Shop around and buy in bulk, saving you a substantial amount of money. With the help of the internet, it’s easier than ever to shop around.  
• If you have space, grow your own vegetables and herbs.
• If possible, move back in with your parents, house share with friends, or rent a cheaper place.
• make the most of what you’ve got and buy second-hand if you really need something.

4. Open a separate bank account

Having a separate savings account for your deposit means you can clearly see how you’re progressing. Set up a direct debit to transfer a set amount into this account after every paycheck. If you like to get more bang for your buck, consider opening a savings account that pays a higher interest rate.

5. Get on top of your debts

Have you opened 'spare' credit cards for travel, online shopping, or 'just in case'? Credit cards make spending very easy - and you'll be paying a lot of interest and fees to go with it. Work at paying off your debts as soon as possible or on time to avoid extra fees and charges. The amounts you were paying in repayments can become savings. 

6. Sell things you don’t need

All of us have things in our homes that we no longer need. Can any of these be sold? Consider a garage sale or selling online to create some extra savings and also declutter your space.

7. Shop around for the best deals

Leverage the many options in the market to your advantage by exploring better deals or renegotiating with your current providers for services such as insurance, utilities, phone, and internet plans leaving you with more savings towards your deposit. 

As well as a deposit, there are some upfront costs you need to cover when buying or building a home. Costs may include loan establishment fees, transfer (stamp) duty, settlement agent fees, shire costs, and any moving expenses. Depending on your individual circumstances, you may need around $5,000 set aside to cover these costs.

Share your home buying dreams with your friends and family, so they can support you.

Even if you only follow a handful of these suggestions, you’ll be that much closer to saving for your dream. Keep looking ahead and never give up.

You may find it valuable to investigate your options with home loan lenders. Find out the deposit requirements and then you can weigh up your choices.

If you want to find out if you would qualify for a Keystart loan, head to Do you qualify and complete a five-minute pre-qualification.

Keystart's low deposit helps you start your home ownership journey sooner, however, if you have a substantial deposit saved or you're happy to wait, you may find a more suitable home loan with another lender.