Saving for a deposit is the biggest hurdle for first home buyers. According to a recent ANZ CoreLogic report, it takes 11.4 years to save a 20% deposit in Australia.
While the outlook may appear grim, buying your first home or investment property isn’t out of reach. Here are our tips for reaching your goal sooner.
Set a savings goal
A savings goal will give you a target to work towards. A common goal is 20% of the purchase price, which avoids lender’s mortgage insurance. To work out your target amount, you’ll need to know how much you can borrow. You can get an estimate by using our borrowing calculator.
Work out how much you can save each month
You’ll need to work out how much you can afford to save each month to reach your goal. Our savings calculator help you. Remember to be realistic with your budget and timeframes to avoid stretching yourself.
Get rid of your debt
If you have ongoing debts, such as personal loans, car loans or credit cards, focus on paying these off as soon as possible. Consider consolidating your loans into one to make them manageable. Avoid increasing debt by removing credit cards.
Look for ways to cut back on spending
Look at your bank transactions from the last three months and look at expenses to cut or reduce. These include memberships or services that you no longer use or need. Consider changing your spending habits, such as eating out less.
Open a high interest savings account
Set up a separate account for your savings and choose one with a high interest rate and no monthly fees. Transfer money into your saving account as soon as you get paid or set up automatic transfers.
Reduce your accommodation expenses
Saving for a deposit and renting can make it hard to achieve your goal. If it’s possible, think about moving back home with your parents, or moving to a share house.
The process of saving for a first home can seem overwhelming. We can help you by looking at your situation and goals and creating a savings plan to get onto the property ladder. Call our team today.
Contact us to find out how we can help. We’d love to hear from you.