Proven Tips to Save Your First Home Deposit Faster

How Much Do You Actually Need to Save?

You need a 5% deposit at minimum if you qualify for the First Home Guarantee, though most lenders will also want you to demonstrate genuine savings and cover upfront costs. Since October 2025, the First Home Guarantee has had no income caps and no place limits, which means you can purchase almost anywhere in Australia with a 5% deposit and avoid paying Lenders Mortgage Insurance.

Consider a buyer aiming to purchase in western Sydney, where the median sits around $800,000. A 5% deposit would be $40,000, but you also need to account for government charges, conveyancing, building and pest inspections, and any lender application fees. In total, expect to save between $50,000 and $60,000 to cover both the deposit and settlement costs. If you opt for a 10% deposit instead, you would need $80,000 plus those same costs, pushing the total closer to $90,000 to $95,000.

The difference between 5% and 10% is not just the deposit size. A larger deposit can open up more home loan options and give you access to better interest rate discounts, though the First Home Guarantee removes the LMI penalty that used to make 5% deposits prohibitively expensive.

Using the First Home Super Saver Scheme to Build Your Deposit

The First Home Super Saver Scheme lets you salary sacrifice into superannuation and then withdraw up to $50,000 of voluntary contributions plus earnings to use as a deposit. You can contribute up to $15,000 per financial year, and because super contributions are taxed at 15% rather than your marginal tax rate, you keep more of what you earn.

If you are earning $85,000 a year, your marginal tax rate is 32.5%. Salary sacrificing $15,000 into super means you pay $2,250 in tax instead of $4,875, saving you $2,625 annually. Over three years, that is an extra $7,875 in your deposit without changing your gross income. When you withdraw the funds, you pay a small amount of tax, but the net benefit is still significant compared to saving in a regular bank account.

You can also combine this with a partner's contributions. If both of you contribute the maximum over three years, you could withdraw up to $100,000 between you, which is often enough to meet the deposit requirement for a property in many Sydney suburbs without relying on a gift or family guarantee.

Stacking Government Grants and Concessions

Most state governments offer stamp duty concessions or cash grants for first home buyers, and these can be stacked with the First Home Guarantee. In New South Wales, eligible buyers pay no stamp duty on properties under $800,000, which saves around $31,000 on an $800,000 purchase. If you are buying a new build, you may also qualify for the $10,000 First Home Owner Grant, provided the property is valued under $600,000 for a house or $750,000 for a house and land package.

In Queensland, the government is currently offering a $30,000 grant for new homes valued under $750,000, which runs until 30 June 2026. Combined with the First Home Guarantee, this can reduce the amount you need to save substantially. A buyer purchasing a new townhouse in Brisbane's outer suburbs for $650,000 with a 5% deposit would need $32,500 for the deposit, but after receiving the $30,000 grant, their out-of-pocket deposit drops to $2,500. They still need to cover settlement costs, but the cash requirement is far lower than most people expect.

Victoria offers a stamp duty exemption up to $600,000 and a reduced rate up to $750,000, plus a $10,000 grant for new builds. South Australia abolished stamp duty entirely on new homes for first home buyers and offers a $15,000 grant, while the Northern Territory provides a $50,000 grant with no price cap, the largest in the country.

These concessions are constantly being updated, and eligibility criteria vary by state, so it pays to confirm your entitlements before you start shopping.

What Counts as Genuine Savings?

Lenders want to see that you have saved consistently over at least three months, and that the funds have come from your own income rather than a sudden windfall or loan. Genuine savings include money held in a savings account, term deposit, or managed fund that shows regular deposits over time. It can also include funds held in offset accounts or superannuation contributions if you are planning to withdraw them under the First Home Super Saver Scheme.

What does not count is a tax refund that arrived last week, a gift from a relative that appeared in your account yesterday, or a personal loan taken out to inflate your deposit. Lenders review your bank statements in detail during the home loan application process, and if they cannot see a clear savings pattern, they may decline your application even if you have the deposit amount sitting in your account.

In a scenario where a buyer has saved $25,000 over 18 months through regular payroll deposits, but also receives a $15,000 gift from their parents, the lender will treat the $25,000 as genuine savings and the $15,000 as a gifted deposit. Most lenders will accept a combination, but some require a minimum percentage of genuine savings, typically around 5% of the purchase price. If the property is $700,000, you would need at least $35,000 in genuine savings, and the gift could make up the remainder.

How an Offset Account Helps After You Buy

Once you have purchased your first home, the way you manage your loan can determine how much interest you pay over the life of the loan. An offset account is a transaction account linked to your home loan where the balance offsets the interest charged on your loan. If you have a $500,000 loan and $20,000 sitting in your offset account, you only pay interest on $480,000.

This becomes particularly useful for first home buyers who continue to save after settlement. Rather than paying down the loan directly, you can park surplus income in the offset account, which reduces your interest while keeping the funds accessible. If you are on a variable interest rate, you retain full flexibility to redraw or access those funds without restriction. Fixed interest rate loans rarely offer offset accounts, so this is one of the trade-offs to consider when deciding between rate types.

Some lenders also offer partial offsets, where only a portion of your balance reduces the interest, or they charge a monthly fee for the offset facility. It is worth comparing these features during the application process, as the difference between a full offset with no fees and a partial offset with a $15 monthly fee can add up over time.

When Pre-Approval Makes Sense

Pre-approval gives you a conditional commitment from a lender before you start shopping for a property. It confirms how much you can borrow, what deposit you need, and whether you meet the lender's criteria. This is particularly useful in Sydney's western suburbs and other areas where properties move quickly, as it allows you to make an offer with confidence.

Pre-approval is typically valid for three to six months, depending on the lender. It is not a guarantee, as the lender will still need to assess the property you choose and review your financials again at settlement, but it does give you a clear budget and speeds up the process once you find the right place.

If your circumstances change during the pre-approval period, such as switching jobs, taking on new debt, or having a drop in income, the lender may reassess or withdraw the approval. For this reason, it is worth holding off on major purchases or credit applications until after settlement.

Deciding Between 5% and 10% Deposits

The First Home Guarantee allows you to buy with a 5% deposit, but that does not mean it is always the right choice. A larger deposit can unlock better interest rate discounts, reduce your loan size, and give you more equity from day one, which matters if property values dip or if you want to refinance later.

A buyer purchasing a $750,000 property with a 5% deposit will borrow $712,500, while a buyer with a 10% deposit will borrow $675,000. The difference in repayments depends on the rate you secure, but a smaller loan also means you pay less interest over time and reach equity milestones sooner. If you plan to hold the property long term, the extra time spent saving for a 10% deposit can pay off in lower borrowing costs.

That said, if property values are rising faster than you can save, or if you are currently paying rent that exceeds what your mortgage repayments would be, buying sooner with a 5% deposit can make more financial sense. The decision depends on your income stability, how quickly you can save, and what the market is doing in the area you want to buy.

Why Timing Your Purchase Around Government Deadlines Matters

Several state grants and concessions have expiry dates, and buying before those deadlines can save you tens of thousands of dollars. Queensland's $30,000 grant for new homes is scheduled to end on 30 June 2026, and Tasmania's stamp duty exemption for established homes also expires on that date. If you are close to being ready, it is worth accelerating your timeline to take advantage of these programs before they lapse or are replaced with less generous schemes.

Even if a program is extended, the eligibility criteria or caps may change. South Australia's decision to abolish stamp duty on new homes for first home buyers was a significant shift, but it only applies to purchases after a certain date, meaning buyers who settled just before the change missed out. Staying informed about policy changes and timing your purchase accordingly can make a material difference to your upfront costs.

If you are unsure whether you will qualify or how the timelines work, speaking with a broker who understands the current landscape can help you plan your purchase around these deadlines rather than rushing in unprepared.

Buying your first home involves more decisions than most people expect, and the options available now are more varied than they were even two years ago. If you are ready to move forward or want to understand where you sit, call one of our team or book an appointment at a time that works for you.

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