How to Save for a House Deposit Faster: 4 Effective Strategies

If you’re dreaming of buying your first home, the average saving time for a deposit in Australia is a hefty five to six years. But let’s be real—who has that much time to wait in today's fast-paced market? Luckily, there are a few ways you could speed up the process. Let’s explore four strategies that could help you get the keys to your new home much sooner.

1. Buy with Less Than 20% Deposit

The common advice is to aim for a 20% deposit, but that’s not your only option. Some lenders are willing to accept deposits as low as 10%, or even 5%.

The trade-off is that if you put down less than 20%, you’ll likely have to pay Lenders Mortgage Insurance (LMI)—unless you qualify for the scheme in strategy 3.

LMI protects the lender (not you) if you can’t make your loan repayments, but the downside is that it can be expensive, potentially adding more than $10,000 to your upfront costs. However, some lenders allow you to add this cost to your home loan, so you can spread it out over time. Keep in mind this will increase your repayments and overall interest.

The upside? You could enter the property market sooner, before prices increase even further. We’re happy to chat about whether paying LMI could be the right move for you.

2. Ask a Guarantor for Help

Got supportive parents or relatives? A guarantor might be your ticket to home ownership. A guarantor provides extra security for your loan, often using their own home equity. This doesn’t mean they hand over cash—they simply back part of your loan, helping you to borrow a higher percentage of your home’s value.

In some cases, with a guarantor in place, you may be able to borrow up to 100% of your home’s value without needing LMI. However, lenders still like to see that you’ve got some savings history, usually with at least a 5% deposit of your own.

Think a guarantor could help your situation? Let’s explore what home loan options might be available.

3. Leverage the First Home Guarantee Scheme

If a family guarantor isn’t an option, don’t stress. With just a 5% deposit, you could still qualify for the First Home Guarantee (FHG) scheme. Through the FHG, the federal government guarantees up to 15% of your loan, allowing you to buy with a smaller deposit and skip paying LMI.

It’s important to note that spaces in this scheme are limited, and there are eligibility criteria to meet. Contact us, and we can walk you through whether this scheme could help make your dream home a reality.

4. Boost Your Savings with the First Home Super Saver Scheme

Another smart way to build your deposit is through the First Home Super Saver Scheme (FHSS). According to the federal government, this could speed up your savings by 30% compared to a regular savings account.

The scheme allows you to make voluntary contributions to your super, up to $15,000 a year. These contributions are taxed at just 15%, which is often lower than your income tax rate, and your super account generally offers better returns than standard savings accounts.

When you're ready to buy, you can withdraw up to $50,000 in voluntary contributions, plus earnings. If you’re buying with a partner, you could withdraw up to $100,000 between you.

Why Acting Quickly Matters

Here’s the kicker: the average five to six years needed to save a 20% deposit assumes today’s median home prices. But property prices are likely to rise in the years ahead. The longer you take to save, the larger your deposit may need to be.

By using one or more of the strategies above, you could save time—and potentially money—by getting into the property market sooner rather than later.

Ready to take the next step?

At Osinski Finance, we specialise in helping first-time buyers navigate the often complex home-buying process. Our team will guide you through all the options, so you can find the fastest route to homeownership. Let’s chat about your unique situation and how we can help you secure your dream home sooner. Reach out today!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.