How To Save For A House Deposit Quickly & Smartly 💸

Q: What is the 50/30/20 rule in Australia?

The 50/30/20 rule is a budgeting method.50% covers needs like rent and bills.30% covers wants like entertainment.20% goes to savings and debt reduction.It helps structure your deposit savings plan.

Q: How much deposit do you need for a $600,000 house in Australia?

A 20% deposit equals $120,000.A 10% deposit equals $60,000.A 5% deposit equals $30,000.Smaller deposits may trigger Lenders Mortgage Insurance unless government schemes apply.

Saving for a house deposit isn’t just about hitting a dollar figure — it’s about building the financial profile lenders trust and choosing smart places to grow your money while you wait. Beyond budgeting and cutting costs, understanding borrowing criteria, government schemes and the real trade-off between waiting and buying now can fast-track your path to home ownership.

In this guide, written by an expert mortgage broker in Brisbane, we tell you everything you need to know about how much to save for a house deposit.

Let’s dive in…

Step 1: Decide A Purchase Price

This may sound too obvious but stay with us…

If you want to buy a home, you need a deposit, and for you to know how much deposit you need, you need to know what you will spend on that home.

In other words, deciding your purchase price is the first step in determining how much you need in savings.

As Tony Robbins says, setting goals is the first step in turning the invisible into the visible.

When deciding your purchase price, it is a good idea to decide on a lower price and work your way up. This will allow you to have a smaller deposit and get into the market much faster. Follow these steps to determine your purchase price:

Define the criteria for your ideal home. Note down everything—the number of bedrooms, bathrooms, yard and even the type of home. Make your list as detailed as possible.
Shortlist up to 3 suburbs you would like to live in. Then visit realestate.com.au and search each suburb based on your criteria. It will show you the median sale price over the past 12 months. Now take the highest median sale price and use it as your guideline of the purchase price.

When choosing a purchase price, remember to set a realistic target. Look at whether or not you can afford the property. As we said above, it is a good idea to decide on a lower price and then work your way up from there.

Step 2: Choose A Deposit %

You might not know this, but you don’t need a 20% deposit when you buy a home.

Times have changed, and you can now buy a house with as little as an 8-10% deposit.

On the other hand, if you have less than a 20% deposit, you will have to pay Lenders Mortgage Insurance (LMI). LMI can add up to thousands of dollars. But the upside is that it allows you to buy your home sooner.

In my case, I bought my first home with the minimum deposit necessary, so I could get into the market faster than waiting to save up a 20% deposit. That’s why I decided to raise an 8-10% deposit.

Step 3: Set A Deposit Goal

Like anything in life, having a dream is good, but making it a reality through goal setting is key. In fact, your Deposit Goal is 10 times more important than anything else. Once you have decided on the deposit percentage (8, 10 or 20), it’s now time to set a deposit goal and work back from there.

Here’s the approach that worked best for me:

I wanted to buy my first home for $330,000 and needed to save an 8% deposit. My deposit goal would be $330,000 x 0.08 = $26,400.

On the other hand, if you wanted to buy a $550,000 house and save a 20% deposit.

Your deposit goal would be $550,000 x 0.20 = $110,000.

Purchase Price	x % Deposit	= Deposit Goal
$330,000	8%	$26,400
$550,000	20%	$110,000

Read More: How much home can I afford?

Step 4: Calculate Stamp Duty & Other Costs

Here there is good news and bad news.

The good news is that if you are a first home buyer, you do not need to pay Stamp Duty in most states.

The bad news is that you do still need to pay transfer fees and other government charges. You can quickly calculate what these look like by talking to your Mortgage Broker or using this calculator.

Since I was looking at buying a home for $330,000, I would need to factor in $872 in government fees.

Realistically, as a first home buyer, you should factor in an additional 1% in other expenses, which is $3,300. This $3,300 would cover things like: government fees, solicitor fees, bank fees, building and pest and other costs.

Step 5: Work Out Your Savings Goal

Now it’s time to put it all together.

Add the deposit goal to the stamp duty and other fees to determine your total saving goal!

In my case, it would be $26,400 plus $3,300 to make a total savings goal of $29,700!

*Deposit Goal*	*+ Stamp Duty & Other Fees*	*= Total Saving Goal*
*$26,400*	*$3,300*	*$29,700*

Now I have a total savings goal of $29,700 to get me into my first home!

Read More: Deposit calculator: How much deposit do I need for a home loan?

Step 6: Set A Monthly Target.

A goal of $29,700 seems like a mammoth task.

But, as the saying goes—How do you eat an elephant? One bite at a time.

How do you save for a home? One dollar at a time.

Take your total Saving Goal and set a monthly Saving Target to make it much more achievable. Determine the number of months you want to have achieved your goal and then divide your saving goal by those months.

For example, if you want to have raised $29,500 in 12 months (1 year), then your saving goal would be $29,500 divided by 12 to give you a monthly saving goal of $2,475.

Saving Goal	/ Months Remaining	= Monthly Saving Goal
$29,700	12 Months (1 year)	$2,475
$29,700	24 Months (2 years)	$1,238
$29,700	36 Months (3 years)	$825

If this Monthly Saving Goal seems too high, consider giving yourself more time. So, rather than 12 months, you can make it 24 months.

Another alternative is to jump back to Step 1 and look at a cheaper property to reduce the deposit required.

If you prefer to set weekly savings targets, just divide by the number of weeks instead of months.

Saving Goal	/ Weeks Remaining	= Weekly Saving Goal
$29,700	52 Weeks (1 year)	$572
$29,700	102 Weeks (2 years)	$292
$29,700	156 Weeks (3 years)	$191

We find matching how you are paid to your savings goal works best. So if you are paid weekly, use the weekly savings goal. If you are paid monthly, use the monthly savings goal.

Check to see if you are eligible for a home loan

Step 7: Pay Yourself First

This involves having your employer pay you directly to an account that is separate from your day-to-day account. So your money goes straightaway into your savings before you even get paid. After that, you transfer the money you have budgeted to use for living expenses into your day-to-day account., It’s really easy to do. These days, you can jump online and have a new account in minutes, thanks to a lot of online banks. If not, there are other banks that actually let you split your account.

A couple of years ago, I set up a House Savings account which was separate from my day-to-day account. I got my money paid straight from my pay into that account. In effect, I was quarantining my Monthly Savings Goal.

If you do that, you won’t even realise it’s gone, and you will keep living your life and spending (the remaining) money as you wish.

Step 8: Keep Your Accounts Separate

This might sound redundant, considering Step 7, but it is extremely important that you remember this.

Keep your savings in a separate account from your spending account. This is because it is extremely difficult to keep spending and savings separate.

I made that mistake when I was trying to buy a place. I put it all in one account and began to feel a little rich, forgetting that it was money I could not touch.

There are a few banks out there that have reward savings accounts. You put the money in there every month, and they actually penalise you with interest if you take it out. It gives you a disincentive to take the money out, and as you continue to deposit, it grows.

Do whatever it takes to stop yourself from spending your savings.

Step 9: Save On The 1%’ers

100% is made up of a total of 1%’s. If you look at it that way, you will see the importance of saving up on the 1%’ers.

What does that look like?

We can definitely tell you it doesn’t look like eating two-minute noodles. But, instead of buying the super fancy $10 cheese from Woolies, you could buy the $5 one from ALDI. If you cut down like that a little bit, you might be able to save up to $50 each week, which can add up to $200 every month and up to $2400 per year! You see how quickly it adds up?

You can cut back on so many things—the type of tomato sauce, jam, or toilet paper.

Remember, It’s the 1%’ers that can really add up and snowball to help you save with that deposit super fast.

Read more: Positive credit reporting.

Step 10: Cut Back On Your Rental Expenses

We have found that rent is the biggest expense for many of our clients. Rent can be 30% to 40% of your total income, so you need to find a way to cut down on this.

Here are a few ways you can cut on rental expenses:

Try to negotiate for a lower rental with your landlord.
If you have a spare bedroom, you can rent it out to friends or family or anyone you know.
You can Airbnb your spare bedroom. It makes good money.
If renting out your spare bedroom is not an option, you can downsize to a one-bedroom or even a studio.
Look for rental properties offering free or discounted amenities like parking spots or Wi-Fi.
If push comes to shove, you can move back in with your parents. This might now be your first choice, but if you’re renting for $700 a week, moving back home would mean $36,000 in savings in one year!

Step 11: Celebrate The Milestones.

Saving can be very daunting, especially if you are sitting there with a goal of $50,000.

But the fact is, if you want to buy a house, you have to save the deposit. You can’t run away from it.

So how do you make the journey a little more bearable? Once you hit a milestone, celebrate It! If your ultimate goal is $50,000, break it up into 10 bite-sized pieces of $5,000 and reward yourself every time you get to $5,000.

But don’t reward yourself financially for achieving your goal! One thing to avoid on your savings journey is to reward yourself with purchases. While it’s important to celebrate the Milestones, linking pleasure with spending can lead to problems down the road. Instead of buying yourself a gift, create an experience with a loved one.

Celebrating doesn’t need to cost you money. For example, in Brisbane, you can take the family out to South Bank and have a swim – it doesn’t cost anything. You might go to Mount Nebo, Mount Coot-tha—any of those places for a picnic. That’s all very cost-effective.

Do it. It’s Awesome.

Bonus: What Lenders Actually Look For (Beyond Your Deposit)

Genuine Savings: What It Means and How Banks Verify It

When lenders ask for genuine savings, they mean money you’ve built up yourself over time — not a last-minute gift or windfall. According to many lenders, this must be held or accumulated in your name for at least 3 months.

Typical sources include:

Savings or transaction accounts
Term deposits
Shares or managed funds held for three months or more
Equity in property (if owned)
First Home Super Saver Scheme (FHSSS) funds

Many lenders require genuine savings when your Loan-to-Value Ratio (LVR) is high. For example, if you borrow more than 90% (i.e., you have less than a 10% deposit), you often need to show at least 5% of the purchase price in genuine savings.

How Long Do You Need a Savings History?

Most banks want to see 3 months of bank statements to confirm genuine savings.
These statements help lenders verify:

Your regular income deposits (e.g., salary)
Whether you save consistently, not just deposit a lump sum just before applying

In some cases, lenders may even ask for 6 months of history — especially for applicants with irregular income or high LVR.

Credit Score, Income Stability & Employment

A strong credit score signals to lenders that you’re a low-risk borrower. Lenders also check:

Whether you have steady employment (full-time, part-time, contract)
The consistency and stability of your income over time
Your existing debts or financial obligations

Stable income and good credit help convince lenders that you can make regular mortgage repayments.

Gifts, Grants & Guarantors: What Lenders Think

Gifts

Some lenders accept gifts (e.g., from parents), but they often need to remain in your account for at least 3 months before applying.
You may also need a written “gift letter” confirming it’s not a loan.

Grants

Government grants (like the First Home Owner Grant) may help with buying costs, but don’t always count as genuine savings.
Each lender has its own policy on how much grant money they will recognise.

Guarantors

A guarantor (e.g., a parent) can back your loan, reducing risk for the bank.
The guarantor must provide income, employment, and financial details — just like any borrower.
However, using a guarantor might carry personal risks. If you default, it could affect your relationship.

By understanding what lenders actually look for — beyond just your deposit — you can present a stronger, more credible loan application. And at Hunter Galloway, we guide our clients through each of these steps, so they maximise their chances of approval.

Would you like to learn about your situation?

Bonus: Tips To Reduce Your House Deposit Amount

Short of begging, borrowing or stealing, there are a few other ways you can approach buying a home by getting help from the people around you.

Look at your brothers, sisters, relatives or friends: If you can’t get in yourself, look at partnering with friends or family.
Enquire at the Bank of Mum and Dad: Parents are usually always keen to help their children and can help you by being guarantors. Guarantor loans are on the rise, and according to figures from ANZ, the number of parents guaranteeing their kids home loans has increased from 5% to 20% since 2013. Guarantor loans may also help you borrow more than 100% of the purchase price without having to pay LMI.
Think about Rentvesting: Rentvesting is about living where you want and investing where you can afford. If you can’t afford the dream house or suburb you want, then continue to rent or live there and invest the difference in a property further out. Once you have built equity with that property, you can then use it to buy the property you want.

Bonus: Fast Tips To Increase Your Income

Make some fast money on Gumtree or eBay: Have a look around the house and sell any old computer gear, phones, or junk you have lying around. You could make a few hundred dollars quite easily!
Get a side hustle: We all know buying a home costs lots. If you’re finding it hard to save with your current income or living from hand to mouth in your daytime job, think about getting a side hustle like Uber or working at a cafe at night. When I was saving for my first home, I did some website work on the weekends to help bolster my cash savings faster.
Sell your car. Cars are a depreciating asset and sometimes one of the biggest expenses most first-home buyers have. Do an audit to see if you are really using it that much and if you can consider downgrading to a scooter or looking at public transport or Uber to get around.

Bonus: Suburbs Where You Can Get A Home With Just A 5% Deposit

The federal government’s expansion of the Home Guarantee Scheme is welcome news for aspiring homeowners. The scheme allows first-home buyers to purchase a property with just a 5% deposit, while avoiding the extra cost of Lenders Mortgage Insurance (LMI).

From 1 October 2025, major changes make the scheme more accessible than ever:

No income thresholds apply (previous limits of $125,000 for singles and $200,000 for couples have been removed).
Unlimited places are available, so there’s no risk of missing out once annual allocations run out.
You must be buying a home to live in, not an investment property.
Higher property price caps apply across Australia, making it easier to buy in capital cities and regional centres.

For example, in Brisbane, the cap has increased from $600,000 to $1,000,000. This higher cap opens up far more options across inner and middle-ring suburbs than were previously available.

Read more: First Home Guarantee Scheme

How To Save For House Deposit- FAQs

What is genuine savings?

Genuine savings means money you build yourself over time, usually across three to six months. It proves consistent saving behaviour, not a last-minute lump sum. Funds from loans or credit cards don’t qualify. Gifts may count, but lenders require written gift declarations and clear transaction history.

Is a 5% deposit a bad idea?

A 5% deposit is not automatically bad. Schemes like the First Home Guarantee allow eligible buyers to avoid or reduce LMI. However, smaller deposits increase loan size and long-term interest. Always check repayment comfort and future risk.

Can I use super to save for my first home?

Yes, through the First Home Super Saver Scheme (FHSSS). It allows voluntary super contributions to be withdrawn for a first home. Tax benefits can accelerate savings. However, strict eligibility rules and release timing apply.

What is the 50/30/20 rule in Australia?

The 50/30/20 rule is a budgeting method.

50% covers needs like rent and bills.
30% covers wants like entertainment.
20% goes to savings and debt reduction.
It helps structure your deposit savings plan.

How to save for a house deposit while renting in Australia?

Start with automatic weekly transfers into a high-interest savings account.
Set a realistic savings goal and timeline.
Reduce discretionary spending where possible.
Track progress monthly to stay motivated.
Consider rentvesting if saving feels slow.

How much deposit do you need for a $600,000 house in Australia?

A 20% deposit equals $120,000.
A 10% deposit equals $60,000.
A 5% deposit equals $30,000.
Smaller deposits may trigger Lenders Mortgage Insurance unless government schemes apply.

Is a bigger house deposit always better?

Generally, yes. A larger deposit reduces loan size and interest paid. It also lowers LMI and improves approval chances. However, waiting too long can expose you to rising property prices.

How to save for a house in 2 years

Set a strict savings target and break it into weekly amounts.
Automate deposits and lock funds in a savings account.
Boost income through side work if possible.
Cut unnecessary subscriptions and lifestyle inflation.

What is the average time to save for a house deposit?

In Australia, the average time ranges from five to ten years. This depends on income, location, living costs, and property prices. Couples often reach their goal faster than single buyers.

What is the best savings account for a home deposit?

Look for high-interest savings accounts with bonus rates and no monthly fees. Focus on accounts with consistent interest, not short-term promotions. Offset accounts can also support deposit building once pre-approved.

How do I save for a house deposit whilst renting?

Create a separate deposit account and treat it like a bill.
Automate transfers immediately after payday.
Use budgeting apps to control spending.
Increase savings when rent or expenses decrease.

Talk With An Experienced Broker To See What You Can Afford.

Not sure how much home you can afford or how to go about saving for a deposit? Or do you need an expert to walk you through the whole home buying process? Our team at Hunter Galloway is here to help you buy a home in Australia.

Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts to help make your home loan journey as simple as possible.

If you want to get started, please get in touch here, and we can book a phone call information session or a face-to-face meeting at no cost to you. Give us a call on 1300 088 065 or book a free assessment online to see how we can help.

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