Saving a deposit for your first home can be a rewarding achievement. It may take a while, and will probably involve making some sacrifices, but the moment you get the keys to your very own front door can make it all worthwhile.
Here are a few tips to help you reach your savings goals as quickly as you can.
Work out a budget
It pays to fully understand your incomings and outgoings and work out where you can save money. Create a budget with our step-by-step guide.You’ll also find links to budgeting calculators to help you do the sums.
Work out what you can afford
It’s important to be realistic when you start hunting for your first home. Use our home loan calculator to work out how much you can afford to spend on a property and what your repayments will be.
Factor in all the costs
When you’re doing your sums, make sure you include all the costs of buying a home. There’s more to it than just the sale price. Pest and building inspections, legal fees and government taxes are among the costs of becoming a homeowner.
Aim for 20%
Ideally, you’ll be able to provide a deposit that’s 20% or more of the property’s sale price. If your deposit is less than that, you may still be able to get a loan to buy the property, but you will need to pay a Low Deposit Premium or Lenders’ Mortgage Insurance, a one-off cost that’s added to your home loan.
Don’t forget to factor in an additional savings buffer on top of your deposit, to make sure you have enough money to cover any unexpected expenses you may have missed during your calculations.
Can you get a grant?
If you’re buying your first home you may qualify for a First Home Owner Grant, which would be a welcome boost to your savings. Rules vary from state to state so take the time to do your research.
Start a savings plan
How long will it be before you’re opening the door to your new home? After you’ve set a goal and come up with a plan, use a savings calculator to work out how long it will take. Then start ticking off the days.
Speak to one of our Home Lending Specialists about saving for your first home.