How to Save for a House Deposit in Australia: Practical Strategies

The traditional target is a 20% deposit, which avoids lenders mortgage insurance (LMI). For a $700,000 property, that's $140,000 — a daunting sum for many first home buyers.

However, you can buy with as little as 5% deposit ($35,000 on a $700,000 property) if you're willing to pay LMI or qualify for the First Home Guarantee scheme. A 10% deposit ($70,000) is a common middle ground that keeps LMI costs manageable. On top of the deposit, you need to budget for upfront costs: stamp duty (varies by state — potentially $0 for first home buyers, or $20,000+ for investors), legal and conveyancing fees ($1,500 to $3,000), building and pest inspection ($500 to $800), loan application fees ($200 to $600), and moving costs.

A realistic total savings target for a first home buyer on a $700,000 property in a state with stamp duty exemption is approximately $45,000 to $55,000 (10% deposit plus costs).

The time to save a deposit depends on your income, expenses, and savings rate. For a couple earning a combined $150,000 per year (take-home approximately $118,000) saving 20% of their take-home pay ($23,600 per year or $1,967 per month), reaching a $70,000 target (10% of $700,000) would take approximately three years.

Quick reality check. For a single person earning $80,000 (take-home approximately $63,600) saving 20% ($12,720 per year), the same target would take approximately 5.5 years. These timelines assume consistent saving with modest interest earnings. Accelerating your savings rate to 30% or more of take-home pay through reduced spending or increased income can significantly shorten the timeframe.

Living at home with family (saving on rent) is one of the most effective strategies, potentially saving $15,000 to $25,000 per year compared to renting. Use our Savings Goal Calculator to model your specific timeline.

Several government schemes can reduce the amount you need to save. The First Home Guarantee allows buy with a 5% deposit without LMI — the government guarantees up to 15% of the property value.

The Regional First Home Buyer Guarantee extends this to regional properties. The Family Home Guarantee (for single parents) allows buy with just a 2% deposit. The Help to Buy shared equity scheme provides up to 40% of the buy price for new homes, meaning you need a much smaller loan.

The First Home Super Saver Scheme lets you save up to $50,000 inside super at a concessional tax rate, boosting your deposit by $8,000 to $12,000 compared to saving through a regular bank account. State-level First Home Owner Grants provide $10,000 to $30,000 for new home purchases. Stack multiple schemes together — a first home buyer could combine the FHOG, FHSSS, stamp duty exemption, and First Home Guarantee to buy with minimal cash savings.

Worth knowing: Automate your savings — set up an automatic transfer of a fixed amount to a dedicated deposit savings account on payday, before you've a chance to spend it. Treat this transfer as a non-negotiable bill.

Open a high-interest savings account with bonus conditions you can reliably meet to maximise your returns while saving. Create a detailed budget that identifies every discretionary expense and evaluate what you can cut temporarily. Common high-impact cuts include reducing dining out (saving $200 to $400 per month), cancelling unused subscriptions ($50 to $100 per month), downgrading your car or using public transport ($200 to $500 per month), and finding cheaper accommodation ($200 to $600 per month through sharing or moving to a less expensive area).

Direct all windfall money — tax refunds, bonuses, birthday money, second-hand sales — straight to the deposit fund.

Cutting expenses has limits, but increasing income has no ceiling. Side hustles and freelance work can add $500 to $2,000 per month to your savings rate.

Popular options in Australia include freelancing in your professional skill set, tutoring, Uber or DoorDash driving, weekend market stalls, pet sitting, and content creation. Asking for a pay rise or changing jobs for a higher salary is often the single most impactful financial move — the average pay increase from changing employers is 10% to 20% higher than staying in your current role. Consider salary sacrificing into super through the FHSSS to gain a tax advantage on your deposit savings.

Bottom line? If you're part of a couple, set a combined savings target and hold each other accountable. Many couples achieve a 40% to 50% savings rate during their deposit-saving period by combining two incomes and sharing living costs. Pretty straightforward once you know.

Use our Savings Goal Calculator to model exactly how long it will take to reach your deposit target at different savings rates and interest earnings. Combine this with our First Home Buyer Grant Calculator to see which government grants and schemes you qualify for, effectively reducing the amount you need to save.

Our Stamp Duty Calculator shows whether you're eligible for a stamp duty exemption in your state, potentially removing $10,000 to $30,000 from your savings target. Our LMI Calculator helps you understand the trade-off between a smaller deposit (with LMI) and saving for longer to reach 20%. And our Borrowing Power Calculator shows how much you can borrow based on your income, helping you determine the right property price range for your budget.