Most of us have saved up for something in our life – a holiday, some new clothes, maybe a used car.
But then when we reach adulthood, we hit the big time – the grand-daddy of all savings goals – your home loan deposit. As a rule, it’s generally considered that the minimum deposit for home loans should be about 20% of the purchase price. Do the math – that usually tops out between 30 and 100 grand. No small change, right?
When up against such a massive savings goal as your down payment, it’s easy to get disheartened. That’s why we’ve put together some simple tips to help you stay in control and save your home loan deposit sooner.
Know what you need
First things first - know what you’re up against. Determine the price range of properties you’ll be realistically looking to buy. The easiest way to do this is by using the online tools available:
- Use a Repayments calculator to figure out what size loan you are going to be able to service
- Use a Deposit calculator to give you a baseline target for your savings
- Use a Savings goal calculator to help you track your savings journey
For more in depth financial guidance for first home buyers, check out our range of property How-To guides HERE.
Set your budget
You may already have a budget in place, but if you’re looking to save as much as you can for your housing deposit, now might be the time to review it.
If you’re new to budgeting, start reading up, kid. A great place to start is our How To Guide to Budgeting.
You’ll need to look carefully at all your current expenses and see where the opportunities to trim the fat lie. It might be hard to hear, but now is not the time for luxuries. Sure, it might hurt now, but it’ll be worth it when you’re sitting on a nest egg for your first place!
It’s also important to think beyond the purchase of your first place – plan your budget for after your move-in day, taking expenses like mortgage repayments, rates and maintenance into account.
Look, the last thing you need once you have mortgage repayments to consider is nagging personal loan or credit card debt.
Paying down your existing debts now will not only save you interest in the long run, but you’ll be a more attractive home loan candidate with less debt hanging over your head.
Work hard for your money
It may not be something you’ve considered before, but if your family life and schedule allow it, a sure-fire way to grow your home loan deposit sooner is to have more money coming in.
Taking on extra work, whether in the form of a second job, or freelance work can boost your saving power. If this is something you’d consider, you could set yourself a rule that all income from your extra stream goes directly towards your deposit.
If you haven’t already, you should consider opening a High Interest Savings Account to make your money work as hard as you do. These accounts reward good savings habits with higher interest, meaning that your balance grows quicker.
And, if you’re worried that temptation will be an issue for you, why not use Internet Banking or your Banking App to set up scheduled payments to ensure your savings are regularly deposited into the right account without you having to worry.
If you’re interested in finding out more about a Home Loan, it always helps to speak with an expert. You can start a conversation with a Greater Bank lender anytime online – click here to get started.
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