Saving for a house deposit can be a daunting task, but with careful planning and execution it is definitely achievable. Follow my tips below to get started on the right foot; this is how many of my clients are able to achieve their property ownership dreams.
1) Know your numbers
Figure out how much you need to save. The average house deposit in Australia is 20%, so if you’re looking at purchasing a $500,000 home, you’ll need to save $100,000 plus the cost of stamp duty relevant to the state you live in and other purchase transaction costs such as conveyancing and government fees. However, there are first home buyer programs available that can reduce this amount, so it’s important to do your research and figure out what you’re eligible for. These programs can significantly reduce the amount of deposit you need. Similarly, many banks have policies and products that help to reduce the deposit you need to avoid mortgage insurance.
2) Make a budget
Once you know how much you need to save, sit down and figure out where your money is currently going. Track your spending for a month or two to get an accurate picture of where your money goes, then see where you can cut back in order to free up some extra cash to put towards your savings goal.
3) Have a dedicated house savings account
Open a dedicated savings account once you’ve sorted your budget. If it helps, set up multiple bucket accounts that allow you to track spending and put savings into a separate higher interest bearing accounts and call it something like “Don’t Touch” or “Dream Home” so you remember what your goal is!
4) Automate your savings
One of the best ways to ensure that you stick to your savings plan is to automate it so that a certain amount of money is transferred from your transaction account into your savings account each month. This way you won’t even have to think about it – the money will just be there when you need it.
Saving for a house deposit might seem unachievable, but with some forward planning you can make your home ownership dream a reality. If you have any questions or want to start the ball rolling on your own home loan process, book a confidential and obligation-free chat with me here.
