How to save a house deposit in 12 months

Start with the home you can afford and the buying options available to you. Then work backwards to a monthly savings target. You may need less than a 20% deposit, but you still need enough for the purchase costs, the loan repayments and some money left after moving in.

If you have $20k saved and need $50k altogether, the gap is $30k. Over 12 months, that's $2,500 a month, or about $577 a week before interest. The useful question is whether your income and normal expenses leave that much room.

We'll help you build the full target, choose changes that make a worthwhile difference and check your progress through the year. If the numbers don't fit 12 months, you can adjust the price, buying option or timetable before spending months chasing the wrong goal.

Your deposit is the cash you contribute towards the price. It is only one part of the money needed to buy. Add the costs of the transaction and the buffer you want to keep, then subtract the savings and confirmed support available for your purchase.

The right deposit also depends on the loan. A smaller deposit means borrowing more for the same home, so compare the repayments at the start. Saving $30k is little help if the remaining loan is larger than you can comfortably repay.

Here is how the deposit alone changes for a $600k home. Costs are extra, and each option needs to work with the property and your circumstances.

The government guarantee supports the lender. You remain responsible for repaying the loan. On this example, buying with 5% rather than 20% reduces the deposit by $90k but increases the loan by $90k. Compare the repayments before choosing your savings target.

Our single parent home loan guide explains the 2% option. A guarantor loan may let an eligible buyer purchase without a cash deposit, but it needs a suitable guarantee and enough income to repay the debt.

An eligible profession may also have LMI waiver options. They can be useful where a government scheme doesn't fit, including some investment purchases. The deposit, income and registration requirements vary, so establish your options before choosing a target.

Ask for actual cost estimates where you can. Stamp duty concessions can change the total substantially, so a blanket percentage for buying costs can send your savings plan in the wrong direction.

Our guide to the hidden costs of buying helps you fill in the expenses. Use the home loan deposit calculator to compare deposit amounts, then add the costs for your own purchase.

For the savings plan below, assume your deposit, estimated costs and buffer total $50k. You already have $20k available, leaving $30k to save. Divide that by 12 months to get $2,500 a month.

This is a savings example, so replace the $50k target with the total from your own purchase budget. A $600k home with a 5% deposit starts with $30k towards the price; the rest depends on your costs and buffer. A different buying option will need a different total.

Download your recent transaction history and go through a normal few months, including your credit cards. Group spending into housing, food, transport, debt payments, insurance, subscriptions, personal spending and savings. Transfers between your own accounts should not be counted as spending twice.

Then add the costs that only appear occasionally. Registration, insurance renewals, school costs, dental work and annual memberships are easy to miss in a single month. Divide the yearly amount by 12 and set it aside as part of the monthly budget.

Open Moneysmart's budget planner with your bank and card statements beside you. Enter each bill at its actual frequency, including annual insurance and quarterly bills, then allow for expenses that will change before you buy.

Put the monthly deposit target into the plan as well. If the total is more than your take-home pay, identify the amount you still need to free up. Save the budget and review it after your next pay cycle so you can compare the plan with what happened.

A budget works better when it includes some spending you enjoy and an allowance for bills. If every spare dollar is assigned to the deposit, an ordinary expense can force you to transfer money straight back out.

Suppose your take home income is $7,000 a month and your normal expenses, including annual bills, total $5,200. You currently have $1,800 available to save. Reaching a $2,500 target means finding another $700 a month through lower expenses, extra take home income or both.

Work through the largest practical changes first. A lower phone plan or unused subscription can help, but start with the changes that make the biggest difference without leaving you short for everyday life.

Use the example to identify changes that fit your own spending, then enter the amounts you can free up. If lower rent requires an expensive move or a longer commute, include those costs before counting the benefit.

Check your budget weekly for the first month. After that, a regular monthly review may be enough if the transfers are working. The aim is to spot a gap while it is small enough to adjust.

A debt repayment can improve your monthly budget or borrowing options, but it also uses cash that might be needed for the deposit. Compare both sides before paying a lump sum from your house account.

List each credit card limit, personal loan balance, car repayment, buy now pay later commitment and student debt. Include the minimum payment and interest rate where relevant. We can then compare the proposed home loan with the debts kept, reduced or repaid.

A lender may assess a credit card using its available limit, even when the balance is zero. Reducing an unnecessary limit or closing an unused account can therefore help without using your deposit to repay a balance you don't owe.

Keep confirmation of the change and tell your broker. There is no universal rule that every buyer needs to close accounts 3 months before applying. What matters is the actual commitment, the lender's requirements and evidence that the change has happened.

Your HECS debt and home loan options deserve a separate comparison. The remaining balance, expected repayment timing and how each lender counts the repayments can change whether paying it out helps your purchase.

For example, using $10k of savings to clear a debt leaves $10k less for the transaction. Even if borrowing capacity improves, you could still be short of the cash required. Ask us to compare the complete purchase position before transferring the money.

Set up a separate deposit account and arrange the transfer for payday. If your target is $2,500 a month, match the transfer to your actual pay cycle. For fortnightly pay, $30k over 26 pay periods is about $1,154 each pay; a calendar month doesn't always contain exactly 2 fortnightly payments.

Keep everyday spending and bills in separate accounts if that helps you see what's available. Reserve money for annual expenses before treating the remaining balance as deposit savings.

Compare the interest you expect to earn after checking the account's conditions. A higher advertised rate may require balance growth, a minimum deposit or limits on withdrawals. An introductory rate can change before your 12 months are up.

A term deposit might fit money you won’t need until a known date, but check early access conditions before locking it away. You may need part of the house deposit soon after signing a contract, well before settlement. Keep that timing in mind when choosing where to save.

The Financial Claims Scheme covers eligible deposits up to $250k per account holder per authorised deposit taking institution. If you spread larger savings across brands, check whether they share the same banking licence.

Small transfers, lump sums and the First Home Super Saver scheme can support the main plan. Work out what each adds and when the money becomes available, rather than relying on several optimistic estimates to reach the target.

If your bank rounds purchases up into savings, keep the money in the deposit account and include it in your actual monthly total. Don't add an assumed round up amount on top of a $2,500 transfer if both are coming from the same spare cash.

For a purchase planned within 12 months, think carefully before putting the required deposit into investments that can fall in value. A share portfolio or cryptocurrency balance could be worth less just when the contract deposit is due. Moneysmart's saving for a house deposit guide covers ways to build the money for a near term purchase.

The FHSS scheme can allow eligible first home buyers to release certain voluntary super contributions for a home. The eligible contribution limits are $15k per financial year and $50k overall. Compulsory employer contributions don't count towards the amount you can release through the scheme.

The amount available for release depends on the contribution type. It can include 100% of eligible contributions made from after tax money and 85% of eligible concessional contributions, plus associated earnings calculated under the scheme. Contribution caps and tax rules also apply, so check your position before setting up salary sacrifice or making a contribution.

Get an ATO determination before ownership transfers, usually at settlement. Depending on the determination date and rules applying to you, a release request may be possible before signing or within 90 days afterwards. Start early so you're ready for a contract deposit due soon after signing.

For determinations made from 15 September 2024, you must also notify the ATO within 90 days of signing the contract. That notification is a separate step from requesting the release.

Read the ATO's FHSS guidance and confirm the timing with your adviser. The home must meet the scheme's residence requirements. There is no general requirement to save for a full 12 months before you can request a release.

A $3,000 tax refund and $2,000 after tax bonus would add $5,000 to the deposit. If that money is available on top of your normal savings, it can reduce the remaining amount or leave a larger buffer.

Wait until the amount and timing are clear before making it essential to the purchase. A bonus subject to performance, an expected refund or an item you hope to sell should not be treated as money already in the account.

If the budget still needs another $300 a month, start with work you can realistically fit around your existing commitments. An extra shift, overtime or a small freelance job may help. Calculate the take home amount after tax, travel, equipment, childcare and other costs.

An extra $300 a month adds $3,600 over a year. That is the amount to put in the savings plan if it can be maintained. Avoid building the whole plan around shifts you can’t reliably obtain or hours that will leave you exhausted.

Selling items you no longer need can provide a one off boost. Record the amount you receive, after any selling fees or postage, and transfer it to the deposit account. It helps the deposit but isn't ongoing income for repaying a mortgage.

A new second job can build your savings before a lender is ready to use all that income in its loan assessment.

Keep payslips and employment records, and tell us about your industry experience and working arrangement. We can check how the extra income may be considered without assuming every bank needs the same history.

The same applies to overtime, commissions and self employed work. Use the income you reasonably expect to receive in the household plan, then have the proposed loan assessed under the relevant lender's requirements.

Government support can change how much you need to save. The rules differ between a guarantee, a cash grant and a duty concession, so check each separately rather than treating them as one first home buyer benefit.

Eligible first home buyers, or people who haven't owned property or land in Australia in the last 10 years, may be able to buy with a minimum 5% deposit and no LMI. The scheme has no income caps or annual place limits, but the participating lender must approve the loan.

You need to be at least 18, an Australian citizen or permanent resident and buying an eligible home to live in within the location's price cap. Check the official scheme information and have the lender confirm the cap for the actual property. Its location can change the maximum price.

Use our 5% deposit scheme guide to work through the buying process. If you're a single parent or legal guardian, ask about the separate 2% deposit pathway described in our single parent home loan guide.

Queensland's grant is $30k for eligible contracts signed on or after 20 November 2023. The new home must be valued below $750k, including land and relevant variations. It is not available for an established home.

Other eligibility rules cover matters such as age, residency, previous grants and property ownership, including your spouse's position. You generally need to move in within 1 year of the completed transaction and live there continuously for 6 months. Check the current QRO eligibility requirements before adding the money to your plan.

Ask when the grant will be paid for the purchase or build. It may help complete the transaction without being available for the initial deposit. Our Queensland first home owner grant guide explains the application steps.

A duty concession reduces the tax payable on the purchase. It doesn’t put that amount into your savings account. Your eligibility depends on the applicable state's rules, price, property and intended use, so have the calculation confirmed for the home you're considering.

If you're using more than one form of support, check that you meet each set of rules. In particular, move in dates and ownership tests may differ. Don't assume being eligible for a grant automatically establishes eligibility for a guarantee or duty concession.

If family can help with a gift, establish whether it is non repayable and what evidence the lender requires. Some options can accept a properly documented gift without the same holding period as ordinary savings. If the money is a loan, disclose the repayment obligation so it can be included in your borrowing assessment.

A guarantor home loan is a different arrangement. It can use a family member's property as additional security, which places that security at risk if the loan isn't repaid. Work through the guarantee amount, release requirements and independent legal advice together before deciding it suits the family.

Put a monthly review in the calendar and compare the actual balance with the target. You want to know whether the savings are building as planned and whether your intended price, costs or loan options have changed.

With $20k at the start and $2,500 saved each month, the milestones below exclude interest, grants and any extra lump sums.

At $1,800 a month, you'll have $41,600 after 12 months, starting from the same $20k. That leaves an $8,400 gap to the $50k target. You could save another $700 a month to keep the original timetable, reduce the required amount or allow about 17 months altogether to reach the target before interest.

Choose the change that suits your household. If the extra $700 would depend on skipping essential costs or using credit for normal bills, adjust the timetable or purchase plan. The budget also needs to work once rent is replaced by mortgage repayments and ownership costs.

An unexpected repair or period away from work can interrupt even a careful plan. Decide which money is reserved for emergencies and keep it out of the available deposit figure. If you need to use it, update the plan with the new balance rather than borrowing to keep the savings graph looking on track.

As you get closer, organise payslips, savings statements, identification and evidence of other funds. Keep the trail clear if savings are spread across accounts or include a gift, grant or FHSS release. Tell your broker about changes to work, debts or expenses before relying on an earlier borrowing estimate.

Some loans require genuine savings: evidence that you've saved or held an amount over the required period. The lender's rules decide whether gifts, rental history or other funds can meet that test, so we'll check before you move money around.

Ask when to arrange home loan pre-approval. There is little value in getting it too early and assuming it remains current for the whole savings year. The right timing depends on how soon you expect to make an offer and the lender's process.

You might widen the search area, consider a different property type or save for longer. Compare the ongoing costs too: a cheaper apartment with large levies or a distant home with a much longer commute may not improve the household budget as much as the price suggests.

Rentvesting means continuing to rent where you live while buying an investment elsewhere. That requires a separate investment budget, including vacancies, management, repairs and your own rent. The 5% Deposit Scheme is for a home to live in, so it won't support a property bought as an investment.

If you decide to buy with someone else, discuss ownership shares, contributions, repayments and what happens if one person wants to leave. Get the agreement and legal structure sorted before making an offer together.