home deposit

It’s not easy saving for a home deposit! A report by Domain revealed that saving for an entry-house for a couple aged between 25 and 34 will now take 11 months longer annually across capital cities, taking a total of 5 years and 8 months. 

Saving enough for a home deposit may seem out of reach for many, but we know you can get there with the right strategy. Here are our tips for turning your savings into a home deposit!

Understand how much you will need to save for a home deposit

The first step is understanding how much you need to save by determining your goals for the purchase. Are you looking for a home that will last you a lifetime, or are you looking for something small to get your foot in the door? Is location important to you, or are you willing to move so that you can afford your ideal home?

Research property prices in the area you are looking for and for the type of home that you would like to purchase. From there, you can estimate your deposit. 

Although it is possible to purchase a home without a 20 per cent deposit, it will mean that you are forced to pay extra with Lender’s Mortgage Insurance. Alternatively, you may be in a position to seek family support through a guarantor. Parental contribution is on the rise, with parents contributing around $90,000 per child on average, a 20 per cent increase compared to 2021. The ‘Bank of Mum and Dad’ has become Australia’s ninth biggest mortgage lender.

Create a savings plan

Now that you know how much you need to save, it is time to create a savings plan to help you reach your goals. Look at the amount that you need to save for your home deposit and decide roughly when you want to purchase. From there, you can work backwards to see how much you need to save each week. If this amount is not achievable, you will need to make some adjustments. This may include readjusting your budget or extending your timeframe.

Grow your home deposit in a high interest savings account

The best way to see your savings grow faster is through a high interest savings account. If your savings are sitting in an everyday bank account, you’ll barely see growth on top of your personal contributions. APS offers high interest Term Investments to help you grow your savings at a faster rate, and hopefully, allow you to reach your home deposit goals sooner.

savings home deposit

Be patient and stay consistent

Saving for a home deposit is a slow process. It can take years of hard work and it may seem impossible at times. We encourage you to be patient and stay consistent with your savings strategy to see your efforts pay off in the long term.