Saving for your deposit

Saving for a deposit is a key step in home ownership. You will need some savings – usually at least 5% of your home's purchase price (also referred to as your Loan-to-Value Ratio or  LVR).

How to save for a home loan deposit

Advantages of a larger deposit

A bigger deposit gives you big advantages

Building a good deposit shows that you have a strong saving history, something lenders like to see.

Save on monthly repayments and interest

The bigger your deposit, the less you have to borrow, and that means lower monthly repayments. You'll also pay less in long term interest charges - money you could use to invest or renovate your home.

Better choice of lenders, lower rate

Some lenders will want to see more than a 5% deposit, so having a bigger deposit gives you a wider choice of lenders and could help you to negotiate a lower interest rate.

Reduce Lenders Mortgage Insurance

If your deposit is worth less than 20% of the property’s value, you have to pay Lenders Mortgage Insurance which adds to your repayments and interest bill.

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How much do you need to save?

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Fast-track your deposit


Establish a budget

This will help you see where you can cut back. Try saving the difference between your rent and your estimated future mortgage repayment so you know it's manageable.


Set a savings target

Saving is always easier when you have a clear goal. Check out our ‘Achieve my Savings Target’ calculator.

Use our calculator


Add any windfalls

Add your tax refund, work-related bonuses or financial gifts to your savings pool.


Now put your money to work

Don't just save money, make it work hard in a high interest savings account.


Set up an automatic payment to your savings account

This will ensure your money is saved before you’re tempted to spend it.


Reduce debts

Lenders will want to know about your other debts (e.g. car loan) as well as your credit card limits, not just the outstanding balance. Paying off other debts or reducing your card limit can improve your chances of loan approval.

Mortgage Choice broker
budgeting tips

FHBsavingB1150x.jpgUse our Budget Planner to draw up a personal budget, or check out our Financial Planning Savings tool to tally up your potential savings.

Write down everything you spend over a couple of months. Be honest about your expenditure and what things cost. Always overestimate rather than underestimate so you don't get caught short.

Take a list when you go to the supermarket, don't buy on impulse and use the internet to compare prices when buying big ticket items. Separate needs from wants. Take-away, a daily coffee and your gym membership can quickly add up.

Finally, check your bank records and regularly review your strategy to make sure you're meeting your financial goals.

We can help you get your savings on track. Contact Mortgage Choice today.

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