6 tips to fast-track your first home deposit
1 Establish a budget
If you have never used a budget before, it’s a worthwhile step. It’s a simple way to get an overall view of your finances, and bring control back to money management.
Your budget should include how much money is coming in, and how much is going out over a period of time. The more detail you include, especially around spending, the easiest it is to identify areas where you can cut back and find extra savings for your first home deposit.
Plenty of apps are available that make budgeting easy. Or head to our free online Budget Planner to get started today.
2 Set a savings target
Saving is always easier when you have a clear goal to work towards really, lenders like you to have a 20% deposit. In other words, if you are looking to buy a home worth $500,000, you should aim for savings of around $100,000.
Hear from Emma in our quick Mortgage Minute video as she explains how much you need to save for your first home.
What if you don’t have a 20% deposit?
Don’t fret as other options may be available.Some lenders may lend up to 90% or even 95% of a property’s value, though, you will be required to pay Lenders’ Mortgage Insurance (LMI). Alternatively, you may be able to tap into the help of a guarantor to provide additional loan security.
A new scheme to buy with 5% deposit
The First Home Loan Deposit Scheme could be your chance to buy with a 5% deposit and avoid paying lenders mortgage insurance1. Places in this scheme are limited, so it’s best to get in touch with us sooner rather than later to know if you're eligible!
Get started here and find out in minutes how much you could be able to borrow with your deposit amount.
Calculate now3 Add any windfalls
Add any unexpected windfalls such as your tax refund, work-related bonuses or any cash gifts to your savings pool. Treat these like forced savings, and put them in your pot immediately. They can really add up in the long run!
4 Now put your money to work
Don't just save money, make it work for you. Shop around for a savings account or, maybe lock part of your funds away in a term deposit - it can mean earning a higher rate and it helps you resist the temptation to dip into your savings.
5 Put your savings on autopilot
Setting up an automatic payment to your chosen savings account will ensure your money is saved before you’re tempted to spend it. Keeping your spare cash ‘out of sight, out of mind’ makes it easier to save.
6 Reduce debts
Lenders will want to know about any other debts you have such as a car loan, as well as or credit card limits, not just the outstanding balance. If you’re looking for advice around how to pay off debt faster or to consolidate your debts, or if you just need advice on how to reach your saving goals sooner, our financial advisers can provide the support you’re looking for.
Expert advice could be the key to getting you started as a homeowner sooner
The first step towards owning your own home is exciting and maybe a little overwhelming. It's natural you'll have plenty of questions - that's where we can help!
Your local Mortgage Choice broker can look at your circumstances and your goals and help you either apply for a home loan with the savings you have.
Contact your local broker today and start putting the plans in place now for the future.
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