How to Save for a House Deposit

Saving for a house deposit feels impossible when property prices keep climbing. But with the Home Guarantee Scheme, stamp duty exemptions, and some disciplined saving, it's more achievable than you might think. Here's a realistic guide.

How Much Deposit Do You Actually Need?

The traditional advice is 20% — but most first home buyers in 2025 are not waiting that long. Here's the reality:

5% deposit ($30,000 on a $600,000 home) — available under the Home Guarantee Scheme, which now has unlimited places and no income caps. No Lenders Mortgage Insurance (LMI) required. This is the most accessible path for first home buyers.

10% deposit ($60,000 on a $600,000 home) — many lenders will approve at 10% with LMI. LMI typically costs $5,000–$15,000 and is added to the loan.

20% deposit ($120,000 on a $600,000 home) — avoids LMI entirely, gives you a lower interest rate, and puts you in a stronger negotiating position. But waiting to save 20% means spending longer renting and potentially chasing rising prices.

Don't Forget the Other Costs

Your deposit is not your only upfront cost. You also need to cover stamp duty ($0 if you qualify for first home buyer exemption, otherwise $15,000–$40,000), conveyancing fees ($1,500–$3,000), building and pest inspection ($400–$800), and moving costs. Budget 3-5% of the property price on top of your deposit for these costs.

Use our Stamp Duty Calculator and First Home Buyer Calculator to get your exact numbers.

Saving Strategies That Actually Work

Automate it. Set up an automatic transfer the day you get paid — even $200/week into a high-interest savings account (currently 5%+) adds up to $10,400/year before interest. Automating removes the decision fatigue.

Use the First Home Super Saver Scheme (FHSSS). You can salary sacrifice up to $15,000/year into super, then withdraw it (plus earnings) for your deposit. The tax benefit (15% vs your marginal rate) means you effectively save faster. Over 2-3 years, this can boost your deposit by $5,000–$10,000 compared to saving in a regular account.

Cut the big three. Housing, transport, and food make up 60-70% of most people's spending. Moving to a cheaper rental, switching to one car, or meal prepping saves far more than cancelling streaming subscriptions.

Park your money in a high-interest savings account. With rates at 5%+, your deposit savings can earn meaningful interest while you save. On a $50,000 balance, that's $2,500/year in interest — real money towards your goal.

How Long Will It Take?

Here's a realistic timeline for a $600,000 property with different saving rates:

Saving $500/week: 5% deposit ($30,000) in ~14 months. 20% deposit ($120,000) in ~4.5 years.
Saving $300/week: 5% deposit in ~2 years. 20% deposit in ~7.5 years.
Saving $200/week: 5% deposit in ~3 years. 20% deposit in ~11.5 years.

This is why the 5% Home Guarantee Scheme has been transformative for first home buyers — it cuts the saving timeline by 60-70%.

Also check your borrowing power to see what price range you can target, and run the mortgage repayment numbers to make sure the monthly commitment fits your budget. The Financial Snapshot brings everything together in one view.