How To Save For a Home Deposit

September 20, 2021
outdoor area of tropical blue and white house

Have you decided you want to invest in property? The big Australian dream may require saving for a home deposit! And sometimes, it’s not as easy as you may think. There may be times of trial and error just to get yourself off the ground, but investing in property takes thorough research, knowledge, and advice but most importantly it takes money, and that is the most vital factor in getting yourself through the door. 

How much money do you need to buy a house? Well, there are multiple costs involved when it comes time to purchase a property, one of which will be the initial deposit of the property. 

As a first time homeowner, you would want to get all the help you can, this can be by loans, mortgages or a first homeowner’s grant. But we recommend the first step when investing is enquiring an independent property valuer to conduct a comprehensive property valuation, whether for pre-purchase or pre-mortgage purposes. A team of industry experts will help you determine what valuation would best benefit your requirements as well as finances.

A property valuation is a process of developing data analysis and research to determine the true value of the property. There are various valuations to consider, pre-purchase or pre-mortgage are the most popular when you are wanting to invest and purchase a property. The type of valuation service you choose will depend on the requirements you have asked for to be completed by an independent property valuer. 

Once you have decided on the type of valuation that would best benefit your circumstances, you will receive a comprehensive report detailing all the information of the value of the property as well as the local market area and any external factors that may come into effect for the value of the property.

Knowing the true value of your property gives you a better understanding and insight into your finances, no matter the property a home deposit is required for, the amount calculated for your deposit is determined as a percentage of total value of the property you are buying.

Most lenders ask for at least 5% deposit, however if less than 20% of the loan is worth nothing. If you are below the 20% deposit amount, you may need to pay a lender’s mortgage insurance, and this may result in a higher interest rate. 

Depending on the type of property you are interested in will determine the percentage amount for the deposit required. To give yourself a greater chance of building a larger deposit amount, it’s suggested that planning a couple years beforehand and deciding on an average house price you are willing to pay will give you a direction to work towards. 

We all have our own personal ways to save money but when it comes to saving for a house or car, there are a few strategies to consider that could help you save up for the deposit of your dream house, by planning ahead of time and following these strategies, you could be well on your way to owning your first property sooner than you think. 

6 Home Deposit Strategies to consider:

  • Budgeting (trying using budgeting apps)
  • Open a savings account (better interest rates)
  • Reduce living costs
  • Find a second source of income
  • Check eligibility for government grants 
  • Simplify your life


You guessed it, budgeting is on the top of the list! When you break down what your expenses are each month, this will give you a better insight into your finances and where the majority of your money goes, this will give you the opportunity to reduce spending that isn’t necessary. 

While you can’t buy a house with no money, you can make changes to your daily habits which could eventually get you closer to entering the property market.

By setting yourself a target each month, you will be slowly cutting down on unnecessary expenses, which at the end of the day add up. For example, eating out or take away, maybe taking that down to just once a week or weekends, the daily coffee from your favourite café and your streaming subscriptions, maybe joining with a family member or friend. 

By starting off with a small target each month, you are starting to build a habit of savings which will later on become part of your everyday life and not feel like you are trying.

Opening a savings account 

takeaway boxes on counter

It’s all well and good increasing and adding to your savings, but where you put the extra savings is important as this can influence how quickly your savings will grow. Finding a savings account that can offer higher interest rates with minimal to no fees, that is purely for the home deposit.  Setting up online access to keep track of the account and you may even want to set up an automatic transfer into the savings account every fortnight or every month. 

A good tip would be the day prior to payday, the amount left in your account or even half the amount can be transferred straight into the savings account. 

Reduce living costs 

If you are renting this can take a huge chunk out of your money every week or month, if you have the option to negotiate lowering the rent then it’s worth a try, if not you may want to move to a property offering lower rent as well as negotiating part or all utilities to be included.  If you have enough space to have a housemate which will help reduce costs of rent as well as utilities and if possible, maybe even moving back in with your parents. Although this may not appeal to everyone, this could be the best way to save more money and not worry about the extra expenses of electricity and water. 

Yes, you would be contributing to living with family or sharing a house, but the cost compared to living alone to sharing can increase your savings quicker which in turn will have you buying your property in a shorter period than planned. 

Find a second source of income 

woman working at night

Nowadays, people are finding ways to make a little extra cash. The internet is one of the most popular for any side gig, with various opportunities to freelance, such as blogging, online teaching, copywriters or photographers the ideas are endless. 

Airtasker is a great way to advertise your skills or trade for hire. It’s easier to get involved in more traditional jobs, like gardening, cleaning, dog walking and nanny’s. A simple weekend job could also be the option. And at the end of the day, you are expanding your skills and experience. 

Check your eligibility 

In Australia, as a first homeowner, you may be eligible for the first homeowner’s grant. Depending on the state or territory you reside in there are conditions that must be met. As requirements vary, generally you need to be a permanent resident or citizen of Australia and are purchasing the property as an individual not a corporation. 

Another option to consider would be the first home super saver, this allows first home buyers to save a home deposit within their super fund. Speak with a professional, research your options and weigh up the pros and cons that you would have to consider helping determine whether you are eligible for any of these options and if not what would they suggest to help get you on the right path of owning a property. 

Simplify your life

As they say every little bit helps. Take a look at your lifestyle and expenses you incur on a daily, weekly or monthly basis that may not be necessary and is costing you your savings. Cutting back now will help increase your chances of purchasing a property quicker and then slowly you will be back to enjoying that daily coffee, or unlimited streaming subscriptions.

Being mindful as a consumer in your home and when at the shops. Look for ways to reduce your living expenses by switching off heaters and air conditioning and hanging your clothes out to dry rather than using the dryer, when grocery shopping, creating a weekly/monthly budget and finding bargains or specials and buying bulk where possible.

You will slowly see a change in your account at the end of every month, whether you are saving $50 at the end of each week or more, it will eventually start adding up and you will eventually be transferring more money at the end of every week or month. 

Applying these strategies and learning how to save will not only get you one step closer to your dream home but will result in some important lifestyle changes that could benefit you in the long run. Taking these strategies into account will give you a better understanding of your lifestyle and what is important and what has no value to your life.

mother and daughter in a happy home

When it comes time to apply for a property, we recommend speaking with experts to determine what valuation service would be benefit your property requirements and financial situation. You will be assigned a senior independent property valuer who will inspect the property you are interested in as well as the local market area and any external factors involved, you will receive a comprehensive report detailing the true value of the property and the local area analysis, which you will then use to determine the amount you require to get you started on the journey as a first home buyer or investor. 

If you haven’t found your dream home yet, we can also help you out in that department. Browse our search page to check out some amazing listings available right now. But don’t just stop there, download our app to get the full Soho experience. Just remember to shortlist or swipe left on our listings so we can send you others that better match what you’re looking for.

Daniel Miller
Daniel Miller is an extensively experienced Senior Property Valuer who has been with WC Valuers for a decade. He has expert skills in property valuation across all types and purposes, including the preparation of reports that ensure compliance with taxation, superannuation and litigation requirements. Daniel is continually enhancing his industry knowledge through career development opportunities and further education, both as an attendee and presenter.
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