Entering the property market is an exciting milestone, but it can also feel overwhelming—especially when it comes to saving for a deposit.
With the average first-home buyer’s deposit ranging between 5% and 20% of the purchase price, it’s no surprise that this is often the biggest hurdle for aspiring homeowners. According to Domain, in Canberra, it takes an average of five years and nine months for a couple aged 25-34 to save a 20% deposit for an entry-priced home.
With the average first-home buyer’s deposit ranging between 5% and 20% of the purchase price, it’s no surprise that this is often the biggest hurdle for aspiring homeowners. According to Domain, in Canberra, it takes an average of five years and nine months for a couple aged 25-34 to save a 20% deposit for an entry-priced home.
While saving such a significant amount may seem daunting, smart budgeting habits can make a big difference. With a few strategic changes, you can speed up the process and get onto the property ladder sooner. Here’s how:
The 50/30/20 Budgeting Rule
A tried-and-tested approach to money management is the 50/30/20 rule. This method divides your after-tax income into three categories:
- 50% for essentials – rent, bills, groceries, transport, and insurance.
- 30% for discretionary spending – entertainment, dining out, shopping, and holidays.
- 20% for savings and debt repayment – including your home deposit.
One way to stick to this rule is by setting up separate bank accounts for each category. Automating transfers after payday means less temptation to overspend, making it easier to stay on track.
Cutting Costs Without Compromising Quality of Life
Saving for a deposit doesn’t have to mean sacrificing everything. Instead, consider small adjustments that add up over time:
- Reassess your living situation – If possible, moving back home with family or opting for a house share can free up a significant portion of your budget.
- Be mindful of grocery spending – Shopping with a list, buying in bulk, and choosing supermarket home brands can lead to substantial savings.
- Reduce non-essential expenses – Cutting back on takeaway coffee, streaming services, or impulse purchases can make a surprising difference. A daily $4 coffee adds up to nearly $1,500 a year!
- Rethink transport costs – If you have access to reliable public transport, it may be worth reconsidering whether you need a car. Carpooling or cycling can also save on fuel and maintenance costs.
Managing Credit and Debt Wisely
Lenders assess your financial history when you apply for a mortgage, so keeping debt under control is crucial. High-interest credit card debt can be a major drain on your finances. The average credit card interest rate in Australia sits at around 18%, making it important to pay off balances in full each month. If you’re considering a major purchase, try waiting 24 hours before deciding—it might help curb impulse spending.
Maximising Income and Savings
If your current budget leaves little room for savings, exploring ways to increase your income can be beneficial:
- Side hustles – Freelancing, tutoring, or selling unused items online can provide an additional income stream.
- Negotiating a pay rise – If you’ve been excelling in your role, now might be the right time to discuss a salary review with your employer.
- Taking advantage of government grants – First-home buyers in the ACT may be eligible for assistance schemes such as stamp duty concessions or saver schemes. We at Dream Catchers Lending can help you navigate these options.
Doing Your Research
While saving for a deposit, it’s a good idea to familiarise yourself with the Canberra property market. Attend open homes, track auction results, and compare different suburbs to understand where your budget can stretch further. Being informed can help you avoid unnecessary costs such as multiple building inspections in areas that may be out of reach.
Final Thoughts
Creating a solid budget and sticking to it takes discipline, but the reward—your own home—is worth the effort. By making smart financial choices, cutting unnecessary expenses, and maximising your income, you can reach your deposit goal sooner than you think. A mortgage broker can be a valuable resource in this journey, helping you understand your borrowing capacity and the best loan options available.
Looking for expert guidance? Get in touch with Dream Catchers Lending today, and let’s take the next step towards your first home together!