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How You Can Increase Your Down Deposit

Buying a home is a major life decision but saving enough for a deposit can seem like an enormous task.

Putting down a substantial deposit works strongly in your favor. It ultimately means borrowing less and saving more on interest payments over the course of the loan. This is far from an easy task especially in major capital cities where median dwelling prices are significantly higher.

The good news is that every little bit saved can add up to a significant amount and put you on the right path towards homeownership. The following are practical tips for getting started with saving for a deposit.

1. Establish What You Can Afford

The first step is to establish a number.

Start by evaluating your finances to estimate how much you can realistically afford. This requires an honest assessment but is critically important to put a savings plan into motion. The amount you need to save can be estimated by deducting what you can borrow from the final purchase price including all fees.

Options are available that let you finance up to 95% of the purchase price but putting down more is beneficial for the following reasons:

  • Lower rates: Putting down at least 10% demonstrates financial discipline when it comes to saving and could qualify you for a much lower rate on your loan.
  • No LMI costs: If you borrow more than 80% of the property value, you will be charged for Lenders Mortgage Insurance. Putting down more eliminates this cost.
  • Pay less: Borrowing less also means that you pay less in interest over the lifetime of the loan. Use a mortgage calculator to see how much of a difference this makes.
  • More options: Having a larger deposit opens your options, which makes it easier to find a better deal and save even more in the long-term.

Starting small is a great start but establishing a budget and actually sticking to it will have far better results. Consider opening a separate bank account and setting up automatic transfers for each paycheck.

2. Consider Investing

According to a survey from Mortgage Choice, one in four indicated that they had saved for more than five years before buying. Putting the money away in a checking account means potentially missing out on growth opportunities.

One option is to consider opening a high-interest savings account to have your money working for you while you continue to save. Other investment options are available with a chance for a higher return but also come with a higher risk. Be sure to speak to a financial advisor to evaluate your choices.

3. Boost Your Earning Potential

Earning more means you can put away a larger amount each month.

It sounds obvious but focusing on your career ultimately equates to a higher salary. Even with a pay raise, it is important to stick with your budget. Avoid the temptation to increase your lifestyle and put away the difference into a savings account where it will be far more beneficial.

The extra cash from a higher salary is a great opportunity to fast-track your homeownership goals.


Saving for a down deposit can seem like a monumental task but is an important step to buying a property. The process can easily take several years but putting down more means paying less overall. Start by calculating how much you need to save and establish a budget to work towards those goals.

Contact Loan Monster today for more financial advice on saving for your first home.

The information contained in this website should not be taken as constituting personal advice. We recommend that you seek professional assistance before acting upon any information provided or linked on this web site.