How to Start Saving to Buy a House

How to Start Saving to Buy a House

If you’re saving up to buy a house, every cent that you can save makes a difference. Here are some ways to save smarter to get you into your first home as soon as possible.

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There’s no doubt about it – in this era of soaring house prices and rising interest rates, first-home buyers have it tough. The first and most important step that expectant home buyers can make is to start saving for a deposit to buy a property as soon as possible. Here are some tips to help you save up on a house deposit sooner.

Define your goal

Are you planning to buy a house? An apartment? Will it be a forever home, or an interim home? Buying a property is a big commitment, both financially and emotionally. Having a goal to work towards can make it easier to stick to a savings plan.

Decide how much you will need to save

It’s a common misconception that you will pay 10% of the sale price as a deposit, but this is often no longer the case. While many lenders may be willing to fund up to 95% of the property price (depending on your financial circumstances), many will be unwilling to lend more than 80%, meaning you’ll need to save up to 20% of a property’s sale price to secure a loan. And if you do borrow anything over 80%, you’ll have to pay the lender’s mortgage insurance, which can add a significant amount to your loan.

A good strategy is to aim to save up to 20% of the final sale price as you’ll not only save on lenders’ mortgage insurance but also bring down your monthly repayments by borrowing less.

Make a weekly savings goal to match your mortgage repayments

Now that you know how much you need to save up, you can make a weekly savings goal, ensuring you put this sum aside first before you start spending.

A great idea is to make your savings goal a sum equal to what you would expect to pay back on a mortgage. This will look good for lenders to show them you can save consistently, but it will also get you used to surviving on that amount of income once you are paying off a mortgage.


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Make big changes

Putting proverbial pennies aside is one way to do it, but are there any big changes you could make that would significantly impact your financial situation? If you’re having trouble making savings, consider whether any of the following options is viable for you:

Move back in with your parents: Think about all the money you could save on rent if you were to move back in with your parents! Or by asking a sibling if you could crash at their house for a while. The average rental price across Australia is around $440 per property or $220 per room. Without those costs, you could save between $11,440 and $22,880 every year. Imagine how much faster you could get into your own home with those savings in your bank account!

Sell your car: It’s true that public transport can get expensive if you’re using it every day. But if you live around the corner from work, or if you work from home, could you get by without a car? If you have a partner, could you manage with only one car between the two of you? By removing the ongoing costs of petrol, general maintenance, insurance, and yearly registration fees from the equation, you could save up to $20,000 per year. If your lifestyle permits it, why not?

Get a second job: Put yourself to work in your spare time. Could you manage a couple of casual shifts a week at your local grocery store or cafe? Alternatively, assess your skills and see if there’s potential for a small side business that you could run in your spare time. Could you grow houseplants and sell them at a market, or could you do some extra bookkeeping after hours? Do you have a skill that people would pay you to teach them?

If you can work a second income into your lifestyle, ensure you put all the extra funds straight into your savings account.

Make small changes

There are so many small changes that go a long way to helping you save money. You’ve probably heard them all before, but are you actually putting them into practice? While these savings may only save you $5 or $10 here and there, those small amounts can add up to thousands of dollars over the course of a year, all of which could be going straight into your savings account. Here are just a few:

  • Rotate your streaming services so you’re only paying for one at a time;
  • Limit yourself to eating out once per week;
  • Take only cash when going out with friends to avoid overspending;
  • Buy everything you need second-hand;
  • Stop habitually buying your daily coffee – make it at home;
  • Assess your energy usage to save on bills – unplug unused devices, lower your heater temperature, turn off lights when you leave a room, take shorter showers and only run full loads of washing (and run them on cold);
  • Price match your purchases where you can;
  • Spend your own money instead of putting everything on a credit card; and
  • Switch to home brands.


If you need to sell your property in a hurry, planning and preparation are crucial to success. By taking the time to plan and prepare and ensuring that you are surrounded by the right professional team to assist you during the early stages of selling your property, you are more likely to be able to achieve a great sales figure and a speedy sale.


Get rid of debt if you can

Paying off debts as soon as possible helps you save on interest payments and will help you secure your home loan when you’re ready to apply. If you’re juggling credit cards or paying off a car loan, you might be better off focusing on paying those off before you begin saving for your home.

And if you find that you rely on your credit card more than you should, it could help to get rid of it altogether to help reduce reckless or unnecessary spending.

Boost your savings

Make your savings work for you! Go and speak to your bank about high-interest savings account to keep your deposit in. These savings accounts often come with a “no redraw” stipulation, which will only encourage you further not to spend what you’ve put aside.

When your savings reach a sizable amount, you could consider transferring it to a term deposit to earn even more interest and reduce the temptation to spend it.

Saving for your deposit is not easy. It requires sacrifice and hard work and can take years before you get to the reward. If homeownership is your dream, you’ll find the reward well worth the hard work it takes to get there. The first step is just getting started.

If you are in the process of buying your first home, always seek the assistance of a reliable property conveyancer. Jim’s Property Conveyancing has offices in Australia and can provide you with comprehensive advice and assistance moving through your property transaction.



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