How long will it take me to save for a house deposit?

The current average house deposit in Australia is $119,560. This makes saving for a home difficult for first-home buyers. But how long does it take?
Dawn Teh
Written by
Dawn Teh
Imogen Baxter
Reviewed by
Imogen Baxter
Last updated
May 17, 2024
0 minute read
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Father and daughter painting on a cardboard house.

The current average house deposit in Australia is $119,560. This makes saving for a home difficult for first-home buyers. But how long does it take?

Saving for a house deposit is often one of the most significant barriers Australia's average house deposit home buyers encounter when trying to break onto the property ladder.

Recent reports state that Australia's average house deposit is $119,560. That's an 11% increase compared to a year ago in 2021. This continues to be a runaway goal for first-home buyers across Australia.

How much do I need to save?

While the current average house deposit in Australia sits at $119,560, this will greatly differ on a case-by-case basis and the cost of the home you are looking to buy.

Your Lender or Mortgage broker will be able to help you find out the deposit you would need for the house price you can afford.

The typical house deposit in Australia equates to roughly 20% of the cost of your home - a loan-to-value ratio (LVR) of 80%. This excludes other upfront costs like stamp duty, legal fees and building reports.

Some other options include:

Deposit boost with OwnHome:

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With an OwnHome Deposit Boost Loan, we loan you the 20% deposit for a 2.2%* Low Deposit Premium, and - with the help of our expert team of Buyer's Agents - you get into your own home today.

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Get a discount for your 10% deposit.

While no deposit contribution is required, customers who contribute to their deposit will have a smaller Low Deposit Premium. For example, if a customer contributes 5%, their Low Deposit Premium will be just 1.65%.

Also, you could consider:

  • ‍Getting a home loan with lenders mortgage insurance (LMI): This is insurance paid by the borrower to protect lenders against loss if a borrower defaults on their home loan. LMI is typically required when a borrower has a deposit of less than 20% of the property value - or an LVR higher than 80% - which is considered a high-risk loan. This can often mean you will only need a 10% deposit.
  • Using all applicable first home owner grants (FHOG) to get benefits like a stamp duty waiver or smaller deposits.
  • Using a guarantor
  • Other low and no deposit options

What are the costs?

Unfortunately, there are more costs involved in the journey to homeownership that you will have to save for. Here are some of the costs involved in purchasing your dream home that you may not expect and how much to budget for them:

Stamp Duty‍:

Stamp duty is one of the highest costs of buying a home after the deposit. Stamp duty is also known as transfer of land duty, a tax payable in Australia on any property purchase. Each state and territory has rules for calculating stamp duty, some being more expensive and complex than others. Some states have stamp duty waivers for First Home Buyers.

At the time of writing, stamp duty on a $700,000 home is $27,000 in NSW, $25,000 in QLD and $37,000 in Victoria.

Financing Costs:

Most lenders or mortgage brokers charge a loan approval fee to cover the costs of preparing security documents, application, and loan establishment costs. You'll find these fees in the product disclosure statement of the loan you are taking out. Loan applications can cost around $500-$1000 but include your application fees and valuation costs.

Lenders Mortgage Insurance:

Lenders Mortgage Insurance is required if you have less than a 20% deposit. Lenders Mortgage Insurance protects the lender if you default on your loan. LMI is designed to help them recoup some of their losses if they sell their property to repay the loan.

If you're taking out a $40,000 loan on a $500,000 home (90% of the property value), you need to pay LMI.

Conveyancing fees and legal fees:

Buying a home is made easier if you have a great conveyancer. The role of conveyancing will depend on the purchase complexity and the chosen provider. You must find a good conveyancer and one that is well-trusted to ensure the process of purchasing your home goes smoothly.

A conveyancer typically costs $1000-$2000 when purchasing a home.

How long will it take me?

It is well known that the Australian housing market is a runway market that is tough to crack into. There is no denying that if having a home is your goal, you will need to become a savvy saver.

How much you need to save up for your house deposit and how long it takes you to save will depend on many factors, including:

  1. Your deposit size and amount, which you can find out by calculating 20% of the value of the home
  2. Current earnings and future earnings
  3. Daily expenses and how much you have left over to save

As a general guide, 50% of your earnings should go to necessities like rent, utilities, and transport.

25% can go towards entertainment, and 25% should be added to savings. Also, 15% of your savings amount should be for your deposit.

Is saving for a deposit possible?

While it is possible, saving for a housing deposit in Australia is becoming a larger hurdle for first-time buyers.

The 2023 CoreLogic Housing Affordability report found that it is harder than ever to save for a deposit. Nationally, a whopping 30.8% of income is required to service a new lease nationally, for a median income household.

How are you meant to save when close to a third of your annual income is just going towards rent? Especially as both rents and housing prices increase, while wages stagnate.

Many Australians currently servicing leases would also be in a position to service an equivalent mortgage. So, why are so many people struggling to get on the property ladder? The issue is not a lack of income, but rather the inability to save the 20% required while renting.

Do interest rates affect my savings?

Interest rates will affect your savings plan and your journey to home ownership. This will mostly happen in two ways:

1- Your savings account rates will likely go up, meaning you are spending a little bit extra on your monthly savings. This is also a great time to check around and ensure you get the best savings rate from your bank.

2- If you currently have a loan or credit card, your interest rates may rise, meaning your monthly repayments will too. This will tell you will have less cash flow to add to your monthly deposit.

What is the quickest strategy?

There are many ways you can be motivated to save for a house deposit or work on building up money to add to your savings account. You can check out our blog on the top 10 ways to save for a house deposit for some of our best tips.

Some tips for saving include:

  • You were creating a budget and sticking to it. Make sure to include all of your income and expenses to get a clear picture of where your money is going each month. You can complete an end-of-month scan to see what you bought that wasn’t essential that month and cut back.
  • Refinancing any of your loans or credit cards to an interest-free provider and ensuring you pay those off in the interest-free period. Make sure you check the refinance's terms and conditions before doing so.
  • Ensure you know the interest rates on the accounts where you save money. Ensuring your money is in an excellent term deposit, high-interest savings account or in an offset for another mortgage will ensure you get the best deals on your cash.
  • Look for more ways to reduce your spending and free up cash for savings. Are you spending too much on entertainment and unnecessary items? How can you cut down utility usage or ask for a better deal?


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This article is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation, or needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS), or other offer documents before making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold).
Prepared by OwnHome Services Pty Ltd ACN 664 492 059. This information does not take your personal objectives, circumstances or needs into account. Always read the disclosure documents for products and services before deciding on a product or service, and consider seeking independent legal, financial, taxation or other advice for your unique circumstances.

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