According to data released by ABS, the mean price of Australian dwellings was $631,000 in September 2016. This means, on average, you need to save $126,000 for a 20% deposit to purchase your own home. Of course, there are lenders who will lend with only a 10% deposit backed by a good credit score or a parent guarantee, but that also translates into savings of minimum $63,000 to put down as deposit on your first home and another 5% of the purchase price to cover the accessory costs such as stamp duty, conveyancing fee, lender’s fee, etc.

Sounds like a tall order, isn’t it? Especially with the average full time earning in Australia estimated to be $78,832 at the end of the second quarter in 2016. In fact, in December 2016, ABS further revealed that the year-on-year increase in average salaries from Dec 2015-16 was marginal – 1.8% for the private sector and 2.3% for the public sector. Compare this to the surge in property prices over the year and you won’t be surprised that first home buyers find the Big D to be the biggest hurdle keeping them away from the property market.


In a survey published by First Home Buyers Australia in 2016, 41% of the participants cited accumulating a deposit as the biggest problem in obtaining their first loan.”

However, if you also dream of owning some real estate, here’s how you can quickly build up your deposit and get closer to the dream:

1. Ask your parents – Inviting much criticism, Australian PM Turnbull had suggested in his election campaign that young buyers could turn to their parents for monetary assistance to purchase their first home. Indeed, if your parents have cash or equity in their property and agree to help you, here are your options:

  • Gift deposit – It is not uncommon for parents to gift their children cash to put towards their home loan deposit. However, banks are strict when it comes to gift deposits and the money must stay in your account for at least 3 months before you get approval.

“The banks are cautious when it comes to gifted cash. Along with the cash, don’t forget to ask your parents for a gift declaration stating that the gift is unconditional and its purpose to substantiate the gift,” informs [Collins Mayaki], a mortgage broker at HashChing. “In addition, some lenders may ask for proof of genuine savings for at least a few months to assure themselves that you can afford to service the loan,” he adds.

Do you know that a younger first home buyer is more likely to receive parental assistance?

  • Parent Guarantee – Another way your parents can help you is by using their property to guarantee your home loan. However, this means you are putting two properties on line – yours and your parents – in case you are unable to service the loan. Know more about parental guarantee loans.

2. Government assistance – Apart from their parents, the government also has several plans in place to assist first home buyers. Different States in Australia offer grants (FHOG) to first home buyers that can be applied towards their home loan deposit. Apart from this, stamp duty exemptions and tax rebates are also available in several states according to the type of property you are purchasing.

3. Plan and save – Apart from enlisting help from your parents and the government, take the matter in your own hands and save in a planned manner to build your home loan deposit faster:

  • Review your expenditure – The first step towards saving more is spending less. Often, we don’t realise how much we are spending unless we sit down and take stock of our expenditure. Make a list of all your expenses and see where you can cut down. Could you swap the morning cup of Joe for a homemade cuppa and some extra savings in your kitty, daily?

We tell you few simple tips to maximise your savings.

4. Set a budget – Saving is not as effective as saving for a goal. Set a savings target and create a powerful budget to meet your saving target for a home loan deposit. “However, keep the budget realistic and review it every few months as long term saving is more effective than few days of scrunching,” warns Katherine, who plans to buy her first home by the mid of this year and has already saved $30,000 in a high interest rate savings account she chose after comparing interest rates on several savings accounts online. “Small changes go a long way. I am committed to buying my home soon. Every month, my husband and I put away 10% of our income in a high interest rate savings account even before we start paying our monthly bills. This habit has made us more organised and we are finally getting ahead with our financial goals,” she says.

Saving for a home loan deposit may seem a deterrent due to the constantly rising property prices but savvy first home buyers know their options – apart from building up your deposit, it is also possible to take a low deposit home loan by paying lenders mortgage insurance that can be added to your loan amount and paid over the life of the loan. At HashChing, we have a panel of expert brokers who have helped hundreds of first home buyers break into the property market with competitive home loan deals and expert guidance. Get in touch with a broker to buy your first home sooner.

By Vidhu Bajaj



HashChing is helping Australians by providing access to pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.

We already have your details. Please click here to login.