An average first time home buyer in Australia is finding it even more difficult to break into the real estate market, let alone save for house deposit. With the current cash rate sitting at 3.6% as of this writing, home loans have become more expensive to attain and service.
To help folks obtain for a first home buyer loan, we have compiled a list of tips for saving for your first house deposit. We’ve included sharing houses to cutting back on expenses to exploring government incentives, we’ll provide you with practical and witty advice to help make your dream of owning a home a reality. So, grab a pen and paper and let’s get saving!
How much deposit do you need for a house?
So how much for a house deposit, exactly?
Rule of thumb is that you need at least 20% of the property price as house deposit to avoid paying Lenders Mortgage Insurance. It can be less than 20% when you apply and qualify for certain first home buyer grants — but we’ll get to that later.
According to CoreLogic, the recent median house price is $501,439 in Australia’s capital cities and $575,916 in Australia’s combined regional areas.
This means that getting a home loan would require you to provide a minimum deposit for house worth $100,000 to $115,000! That’s a LOT of money
How to save for house deposit in 8 ways
Saving for a deposit for a house has never been tougher in this economy, but not entirely impossible. Reviewing every dollar you spend your money on and identifying where you can cut back your costs are a good place to start.
Below are 8 ways to effectively save for house deposit for first time buyers.
1. Downsize your lifestyle
You could start reducing your expenses and living within your means. This could mean cutting out expensive habits or purchases, like eating out, buying designer clothes or taking luxury vacations.
2. Give up your car
Cars can be a significant expense, especially when you factor in petrol, insurance, maintenance, and registration fees. Giving up your car can be a drastic but effective way to save money. You can consider using public transport or walking/biking instead.
3. Share a house with family or friends
Sharing a house with family or friends is a cost-effective way to split rent and utilities. You could also share meals, which can be a great way to save money on groceries and meal prep.
4. Downsize to a smaller house
Isn’t it the dream to live in a four-bedroom house with space for a big backyard? However, properties like this are guaranteed to be pricey especially if they’re located in rich post codes.
As a first time buyer, you may want to consider downsizing to a smaller house or to a less expensive location. Most people actually consider their first house as a step on the property ladder rather than their forever home.
5. Increase your income
A little more takehome pay never hurt. You could take on a second job, ask for a raise or promotion, or find ways to earn money on the side, like freelancing or starting a small business.
6. Reduce your energy and gas consumption
Reducing your energy and gas consumption can lower your utility bills and help you save money. This can include things like turning off lights and appliances when not in use, taking shorter showers, and installing energy-efficient appliances.
7. Consolidate your debts
Consolidating your debts can help you save money on interest and make your payments more manageable. You can do this by transferring your credit card balances to a lower-interest loan, like a personal loan or balance transfer credit card.
8. Take advantage of first home buyer grants
There are many government incentives you can leverage to help you save for house deposit. You can apply for the First Home Buyer Choice scheme that allows you to skip paying stamp duty altogether!
Visit this page for a complete directory on all NSW First Home Buyer Grants.
Buy your first house with a Stryve Finance mortgage broker
When you’ve saved enough money for your first house deposit, feel free to reach out to us! Stryve Finance is an award-winning team of lending specialists in the country.
With over 130+ 5-star reviews from our happy clients, rest assured that our goals are aligned with yours.
