Tips for saving your first home deposit

Published Mon 27 Feb 2017

Now you’ve decided you want to buy your first home, it’s important to look at how much deposit you will need, and how you’re going to make it happen. When you apply for a home loan, banks generally prefer if you have saved 20% of the purchase price, plus costs. By doing this, you avoid paying lenders mortgage insurance, and most banks have a little more flexibility in their credit policy. While this is great in theory, the reality is saving a full deposit while maintaining your lifestyle is difficult to do. Here are our top 3 tips to make it easier.

Tips for saving your first home deposit
  1. Save 10% of each paycheque
While this is not new advice, it really works. It’s important when you’re doing this to ensure you’re using a high interest savings account. Setting up an automatic direct debit makes this easy, and most importantly, you’re paying yourself first!
  1. Eliminate unnecessary expenses
While you don’t want to spend your whole life eating tuna and drinking instant coffee, getting that first deposit requires some sacrifice. Easy steps we’ve taken to save some additional money include:
  • Cutting out the morning coffee. $4.00 every day really adds up, and making coffee at home only takes an extra 5 minutes. Bonus points if you buy yourself a keep cup – saving the planet as well.
    • Extra funds saved: $1500pa
  • Cancel your Pay TV, and sign up for Netflix instead. A standard Pay TV subscription is roughly $80pm, with Netflix being about $12.
    • Extra savings: $800pa
  • Take lunch to work every day. Sushi and a can of drink is easy, but it’s also $10 per day. Pack you lunch instead, not only saving money, but your health.
    • Extra funds Savings: $2400pa
  1. Get a part time job
Now that you don’t have pay TV, and an abundance of extra energy from your healthy lunches, it’s time to boost the income.
There are several flexible jobs you can pick up that will give your savings that extra boost. Some examples:
  • Uber driving – put that car to good use. You choose the hours that suit you. Big plus, busiest times are Friday and Saturday night, meaning you’ll save further money by skipping a night out with friends.
  • Tutoring – there is a growing market for tutoring high school students in a variety of subjects.
  • Stacking shelves at the supermarket. Not the most interesting job, but hours are abundant and you can listen to music.
If you have any questions about this, or would like some helping working out how much you need to save, you can contact one of our brokers here

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