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Saving for Your House Deposit is Easier than You Think

September 2021

The average house price for Melbourne is now $1,004,500! If you were to attempt to save up the traditional 20% deposit (to avoid paying extra by way of Lender’s Mortgage Insurance) you’d be up for over $200,000! Of course, that sounds unachievable.


Now, you’re unlikely to be in the market for a million-dollar house; especially if it’s your first home. It pays to explore emerging residential estates across Victoria like Exford Waters in Melton.

Here, the average price for a house and land package is only $481,662. This will buy you a four-bedroom, two-bathroom, two-car garage home which may even be more than you need. A 20% deposit is now a bit less intimidating at $96,332.

With the First Home Loan Deposit Scheme (FHLDS), reaching your goals might be even closer. You may need as little as 5% for your deposit. This is because, if you’re eligible, the government will “guarantee” the extra 15% so you don’t need to pay for Lender’s Mortgage Insurance, and selected lenders are more willing to loan you money at that low deposit amount. Returning to our $481,662 house example from above; your 5% deposit is now only $24,083. Keep in mind there are only 10,000 places available in the FHLDS from July 1 2021 for the year ahead, you’d be best to apply sooner. And do note – if you’re a single parent – you may actually only need to save up a 2% deposit due to the government’s new Family Home Guarantee program.

Next, add on the $10,000 First Home Owners Grant and you’re looking at a deposit of only $14,083. With a little nip and tuck here and there to your everyday budget, doesn’t that seem far more achievable?

So the above is an idea of how much you’ll need. But how do you save for a deposit? We won’t tell you to give up smashed avo on toast.

Here are some factors you could consider when saving for a deposit on a new home:

  • If you’re currently renting, can you find a better deal locally? Or can you live with renting somewhere a little smaller, a little further away, or a little less nice if it’s only for 1-2 years while you’re in savings mode?
  • If you can’t move yet, can you get another housemate to share the cost? Is it possible to move back in with your parents or another family member for a while and pay less for room and board?
  • List out all of your power bills and loans – gas, electricity, insurances, car repayments – and ask for a better price. If not, switch.
  • You really should put yourself on a budget. It doesn’t have to be complicated. Add up how much you must spend each month to live then add a little extra for fun stuff (yes, like occasional smashed avo brunches). Then put whatever income is left over into a high-interest savings account as soon as payday comes around.
  • You should also put any extra cash you have leftover from your spending money each pay period into that savings account. A few dollars here and there really does add up.
  • Do you have any big-ticket items that you no longer use that you can sell? Think video games, gadgets, designer clothing, tools, sporting goods, jewellery, bikes and e-scooters. Sell the best stuff online and host a garage sale with your friends and neighbours for the rest (do pay to advertise it). Whatever you’ve got to get rid of, there will be someone out there who wants it.
  • It may seem obvious but it’s worth the hassle: look for a better-paying job if you can! If you don’t really want to change jobs, keeping an eye on Seek anyway won’t hurt.
  • Is it time to ask for a raise in your current career role or see if there’s a path to promotion?
  • If you’re comfortable, let your family know about your deposit goals and request money popped into your savings account instead of physical objects for your birthday or special occasions. Or at least request things for your eventual new home when they ask for gift ideas.
  • Holiday at home. Everyone needs a break, even when they’re in serious savings mode. Instead of booking expensive flights and accommodation (that’s risky at the moment anyway), explore your own backyard as a tourist would! Hiking, picnics, beach yoga, museums, art galleries, attempting an exotic new recipe at home – a lot of this is free or close to it. Check your council’s website for upcoming community events to check out.

If you find yourself with some savings, once you have spoken to your financial advisor to make sure it’s the right time to make the commitment to a new home, come and talk to us! Our Estate Managers, Brandon and Will are here to help you on your home-owning journey and are eager to help you find the best deal for your needs at Exford Waters. Talk to them today.