How to Save Your Deposit Faster

Saving for a house deposit can feel like a marathon, with the national average sitting at 5–6 years. But who has that kind of patience in today’s competitive housing market?

If you’re eager to beat the average and get into your first home sooner, here are four strategies that could help fast-track your journey.

1. Buy with less than a 20% deposit
Did you know you don’t need a 20% deposit to buy a home? Many lenders accept deposits as low as 10%, and some even go as low as 5%.

The trade-off? You may need to pay Lenders Mortgage Insurance (LMI) if your deposit is less than 20%. LMI is a one-off premium that protects the lender if you’re unable to make repayments.

While it adds to your upfront costs, LMI is a common choice for many first-home buyers because it allows you to get into the property market sooner—potentially saving you from having to save a larger deposit while prices continue to rise.

Better yet, many lenders allow you to add the LMI premium to your home loan, spreading the cost over time. This way, you can start building equity in your home sooner rather than later.
We can help you explore whether this option suits your financial situation.

2. Have a guarantor in place
A guarantor, typically a close relative like a parent, can provide extra security for your loan using their home equity. This support may allow you to borrow up to 100% of the property’s value without needing LMI.

Guarantors usually don’t need to provide cash and can specify the portion of your loan they’re willing to secure. Most lenders still prefer you to show a solid savings history, ideally with at least 5% of the property’s value saved.

If you’re considering this option, we can guide you and your guarantor through the process.

3. Tap into the First Home Guarantee scheme

No guarantor? No worries. With the First Home Guarantee (FHG) scheme, the federal government guarantees up to 15% of your loan amount. This means you can purchase a home with as little as a 5% deposit and avoid paying LMI.

This scheme can significantly reduce the upfront cost of buying your first home, but places are limited, and eligibility criteria apply.

Talk to us today to see if you qualify and how the FHG could help fast-track your path to homeownership.

4. Use your super to boost your deposit
The First Home Super Saver Scheme (FHSSS) can supercharge your deposit savings. According to the federal government, this scheme could grow your savings by 30% compared to a regular bank account.

Here’s how it works:

• Make voluntary super contributions (up to $15,000 per year).
• These contributions are taxed at just 15%, often lower than your marginal tax rate.
• Your super account generally offers higher investment returns than regular savings accounts.

When you’re ready to buy, you can withdraw up to $50,000 of your voluntary contributions (or $100,000 if buying with a partner), plus any earnings.

Why time is of the essence
The national average of 5.6 years assumes a 20% deposit based on today’s median property prices. However, property values often rise over time, meaning your target deposit could grow the longer you wait.

In short: the sooner you act, the better your chances of securing your dream home before prices climb further.

If you’d like to discuss your options, reach out to Kerry today who can help you navigate these strategies and find the right path to home ownership for you.