Tips on Saving for a House Deposit
Tips on Saving for a House Deposit
The Great Australian Dream! With rising house prices and the cost of living, having a well-thought-out deposit strategy is essential. Here are some tips to help you save effectively for your dream home.
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To buy a $500,000 house, a 20% deposit means you’ll need $100,000. If you qualify for the First Home Loan Deposit Scheme, you may be able to purchase a home with as little as a 5% deposit.
Two Ways to Save for Your Deposit
- Save More
- Spend Less
Both are equally important but easier said than done.
Assess Your Budget
Budgeting and controlling spending require systems, not guesswork. Without discipline, there will be no success. Do you really know how much money you waste on things that add no value? For example, just one coffee a day at $4 adds up to $1,460 a year.
Start by working out your monthly income and expenses. Include all regular expenses and any debts you have (e.g., credit cards, car loans, Afterpay, etc.). You’ll likely find areas where you can cut unnecessary expenses. Ensure your budget is achievable and realistic.
Get on Top of Your Debts
Too much debt will break your budget and make it extremely hard to achieve your saving goals. Credit cards are the most common debt trap. Cut down or eliminate credit card purchases and the resulting interest and debt.
You simply can’t save effectively if you are paying off large debts. Consider consolidating your outstanding debts into a low-interest loan and keep only one credit card with a small limit for emergencies.
Cutting down on unnecessary spending and debts will save you a fortune in interest, and your bank will look more favourably on you when it’s time to apply for a home loan.
Talk to Your Bank
Discuss different account options with your bank and see how they can help you maximize your interest earnings and reduce your temptation to spend. Make sure you have a demonstrated savings history, as lenders need to see that you are responsible with your finances.
Welcome Home
At JKL, we’re here to support you on your journey to homeownership. By following these tips and creating a solid savings strategy, you’ll be one step closer to achieving your dream.
Experience our JKL real estate family. We’ll put the welcome mat out for you!