Saving Up for a Home Loan Deposit

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  • 15 May 2017

Saving Up for a Home Loan Deposit

Trying to buy your first home? If you're like other first-time home buyers, you've been saving for that home loan deposit for ages. There is so much to learn and understand around buying your first home, but for most of us, the biggest hurdle is saving enough for the deposit. A deposit will be anywhere from 5% of the total price of the home through to 20% depending on the loan, the bank and the property.  A larger deposit may mean a lower interest rate, so in the long-run its best to save as much as you can. Is this task insurmountable? No, it'll just take some thought and tenacity like everything else worth having. Here are a few tips to help you pull together the deposit you need.

How to Save for your Deposit

The first step towards saving for your deposit is to create a budget that you can live with.

The Budget

Preparing a budget is not as tricky as it sounds.  The best place to start is to record all of your income as well as all of your spending--every last cup of tea and pack of gum. If you're like most people, you'll quickly notice that you spend money on items you could easily live without. Often the little items that we are unconsciously spending money on and they are also the easiest to either give up or cut down on.

Break Down Your Spending into Categories

Next you need to break down your spending into categories.  For instance:

  • Household essentials: rent and utilities
  • Phone and internet
  • Transportation
  • Food
  • Clothing
  • Entertainment

Most of what you spend will fall into one of these categories. How much do you realistically need to spend on each? The last three are the ones you can likely tweak the most.  Most of us are unaware of exactly how much we spend on take away dinners or that cheeky coffee on the way to work.  Just by using the coffee machine at home or work instead of the morning trip for a latte can save you over $1,000 a year.


Your Credit Rating

As you'll be applying for a loan, your credit rating is extremely important. If your score is bad, spend some time repairing it. If your score is on the lower side, you're less likely to convince a lender to do business with you--even if you have a sizeable home loan deposit. Credit scores can be repaired, but like budgeting, this takes time, patience, and perseverance. 

Here are a few ideas to get you started:

  • Either put your payments of regular bills on auto pay--that is, they'll come directly out of your bank account as soon as they're due, OR set up auto reminders so you don't forget.
  • Work to pay down your debt faster than the suggested minimum payments allow.
  • Contact your creditors or a credit counseling service for assistance.


Good news and bad: The Queensland First Home Owners' Grant (FHOG) has been boosted to $20,000, but only until 30 June 2017. According to the Queensland government website, you may qualify for $15,000-$20,000 of assistance on the home you're interested in buying, as long as you are buying or building a brand new home and it's not over $750,000.

You Can Do It!

Start logging your earning and spending. Create a budget. Request your credit report. Call your mortgage broker to find out if you qualify for the First Home Owners' Grant--but do it now. Get out there and find a home you love.

If you're looking to buy a home, contact us. Our homes are completed, landscaped and ready to move into!