Saving For A Deposit

February 09, 2016
Vikki Hanning

SAVING up for a house deposit can seem like a daunting and seemingly impossible feat for many renters trying to break in to home ownership.

With a little planning and foresight though, it is achievable.

Here are a few ideas of how to start building those funds for your deposit.


If you have champagne tastes but are living on a beer budget you may want to adjust your expectations for your first home.  Don’t forget there’s plenty of time to work towards upgrading to your dream home. 

Have a look at the areas you are interested in, surrounding areas may be slightly more affordable but get you a foothold in the area you wish to be in.

Take an honest look at unnecessary expenses, your morning take out coffee, buying lunches, paying for parking when you could catch the train.   The amounts will add up quicker than you expected. 

You could consider sharing with a friend if you are in rented accommodation to share the burden of your current outgoings on rent.


If you are carrying credit card debt you may want to think about paying this debt off first so you have more cash flow to use towards savings.  Or make the portion of debt you pay off, be it personal loans or credit cards, higher than your savings.  With interest rates around 20% on credit cards that all adds up to a good sum of money you could instead be putting towards your savings.

Paying off your debt can also help establish the routine of a savings pattern.


Starting by setting aside 10% of your take home pay is a good place to start.  Pay yourself this 10% first when you get your pay cheque and you won’t be as likely to fritter it away on things you don’t really need. 

Put your savings away into an account that isn’t easily accessible, for example into an online savings account that you can’t access with a debit card.


In an ideal world a 20 per cent house deposit means you will escape hefty lenders mortgage insurance (a fee that covers the lender, not the borrower, in case of default on the loan)

As an owner occupier, the bigger the deposit, the better.

Of course there are other ways to avoid this cost, such as having a parent guarantor your loan to avoid mortgage insurance.

 As always, it’s a good idea to talk to your Mortgage Choice South Perth broker on 9472 0211, and we can steer you in the right direction to help you reach your goal. 

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Posted in: Tips

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