- How to Save For a Home Deposit Faster
- Tip #1 – Review Your Bank Account
- Tip #2 – Create a Separate Savings Account
- Tip #3 – Take Advantage of Deals
- Tip #4 – Open a Term-Deposit
- Tip #5 – Sell Any Unwanted Items
- Tip #6 – Track Your Spending
- Tip #7 – Ask For Discounts
- Tip #8 – Review Your Memberships
- Tip #9 – Review Your Insurances
- Tip #10 – Keep Petrol Vouchers and Use Them
Rising property prices across Australia are forcing first home buyers to save for longer, and this makes it difficult for many to reach their savings goal. But, if you know how to save for a home deposit, then this doesn’t need to be the case. All you need is a strategic plan and then to stick to your strategy.
According to a recent first-home buyer survey conducted nationwide, which canvassed thousands of first home buyers, on average, it took these buyers between 2 to 4-years to save a 10% home deposit before they could afford to buy. This, said those surveyed, was due to escalating property prices. Property experts say this comes as no surprise, as home prices have jumped over the last 10-years, which means first home buyers must save for longer.
In comparison, a similar survey conducted in 2017 found that innovative first-home buyers looked at more affordable suburbs or buying an apartment instead of a house. This strategy meant these home buyers shaved a year off the time it took to save for a home deposit.
Of course, the good news on the property price front for those looking to break into the market is that home prices are falling. In fact, CoreLogic RP Data research indicates that property prices in Australian capital cities have dropped by 0.8% over February 2018 with them looking to fall further.
Although home prices in Australia are still steep. Therefore, first home buyers feel like the donkey with the ever-elusive carrot dangling before them, where buying their first home is within sight, but they can never quite reach it and sink their teeth into it. This situation occurs because what they’ve saved for a deposit is never quite enough to buy a home.
The best way to beat home price rise is to save for a home deposit faster. Let’s look at how to save for a home deposit, so you too can save faster.
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So, if you’re looking to buy a home, but feel like it’s taking you forever to save, here are a few tips to help you save faster:
Okay, so you’ve had the same bank account since you were in primary school, but is it still giving you a competitive rate of interest? Many banks these days offer you several incentives to use their services. So, make sure you shop around and compare savings account interest rates and fees. Find an account that offers you the highest rate of interest and lowest costs.
By having a separate savings account to your everyday account, you’re ensuring you stay on top of your savings goal and you’re giving yourself the incentive to achieve your goal. You’re also reducing the temptation to spend the money you’ve saved.
Some lenders offer new account holders a higher rate of interest if they deposit a certain amount into their account each month or withdraw a set amount from an ATM. If your lender has these types of incentives in place, then make sure you use them, so you earn more.
Some banks have accounts that enable you to deposit money into them for a set term. These accounts are term deposits and typically attract a high rate of interest. Some of these accounts allow you to make a withdrawal once a month, without incurring a penalty, while others are term locked with you then unable to access your money until the term’s end.
Go through your old clothing, furniture and even appliances and work out what you don’t use. Put these items aside, and then have a garage sale, sell them on eBay or even at a local trash and treasure market. You’d be surprised at how much money you can make. The money you raise can then go into your savings account.
It is difficult to save and very easy to spend. There are free budget planners and spending trackers that you can download online. These will allow you to figure out what you are spending where and how you can reduce your costs so that you can save more.
If you are a regular at a store or gym, then ask them how you can receive customer loyalty rewards. But, only ask for a discount if you feel comfortable.
We often take out gym and club memberships with good intentions of using them, but usually find that these typically end-up costing us more than we originally thought, and we never actually use them. If this is the case, then it’s time to cancel your unused memberships and to put the money you save into your bank account.
Most of us have a set and forget mindset when it comes to vehicle, life, and income protection insurance. We often take out a policy with a company and then just renew it annually without thinking about the cost. If this sounds like you, then it’s time to review your insurance policies. Do some research and compare the rate you are currently paying, to other insurance providers. Then ask yourself, Can I save by changing to another insurance provider? If you can, then make the switch, and put what you save into your home loan deposit savings account.
Often when we do our grocery shopping we receive a shopper voucher for cheaper fuel. Many of us don’t use these, and yet, these vouchers can shave hundreds off your annual fuel costs. So rather than throwing these vouchers out, start using them.
Are you looking to buy your first home and trying to save for a home deposit but don’t know where to start? Then contact eChoice and find the right home loan for you today.