Top Tips To Saving For A House In Australia
So, you’re looking to buy a house in Australia but you’re not sure the ways to save up enough money. It’s a big step to take for anyone, especially with property prices being what they are and the current cost of living. Whether you’re buying your first place or simply looking to upgrade, here are some tips to help you save up for your dream home.
Figure Out Your Savings Goal
The first step to take is deciding on how much you need for a deposit. In Australia, it’s common to aim for a 20% deposit to dodge Lenders Mortgage Insurance (LMI). For a $600,000 home, that’s $120,000. Using online calculators can help you get a sense of what you need based on where you’re looking to buy. Having a clear target helps keep you on track when saving each month.
Make a Budget and Stick to It
Budgeting requires commitment even if at times it does make your life slightly more restrictive, but it’s key. Check out your income and expenses to see where your money’s going. Set aside a chunk of your income for savings each month. It is also best to make a list of your monthly non-essential costs each month to see what you can reduce. The money you save can then be placed into a high-interest savings account or a special savings fund for your house.
Pick the Right Savings Account
Not all savings accounts are created equal. It is key to look for a high-interest savings account to grow your savings faster. Compare different accounts to find one with a good interest rate and low fees. Some even offer bonus interest if you meet certain conditions. Wondering how you can find the best savings account for you? Here at GLOSS Vault we can show you the highest interest savings account for your location in just 30 seconds! Head here to see just how much more you could be making from a higher interest savings account.
Use Government Schemes
The Australian Government provides some very useful schemes to help first-time buyers get onto the property ladder. The First Home Owner Grant (FHOG) gives a one-off payment if you’re buying a new or renovated home. The First Home Loan Deposit Scheme (FHLDS) lets you buy with just a 5% deposit without Lenders Mortgage Insurance. Check if you’re eligible and see how these can help you in the process of building up your savings.
Work on Your Credit Score
A good credit score is key in the process of getting a mortgage. It’s important to pay off any high-interest debts and make sure you’re keeping up with loan repayments. Regularly check your credit report for any errors that could impact your borrowing capacity.
Automate Your Savings
Setting up automatic transfers from your main account to your savings account helps you consistently saving without having to even think about it. Most banks let you set up regular transfers, which helps keep your savings on track.
Keep an Eye on the Property Market
Stay in the loop about property market trends where you want to buy. Research current prices, trends, and economic factors that might affect the market. Visiting open houses and talking to local real estate agents can also give you valuable insights and knowledge on how the system works.
Think About Shared Ownership or Co-Buying
If saving for a full deposit feels overwhelming, consider shared ownership or co-buying with family or friends. Shared ownership lets you buy a portion of a property and rent the rest, with the option to buy more later. Co-buying can also help reduce the deposit burden. Just make sure you have clear agreements and legal arrangements to avoid any issues.
Stay Motivated and Flexible
Saving for a house is a marathon, not a sprint. Celebrate your progress along the way and keep your end goal in mind. Be ready to adjust your plan if your financial situation changes. Staying flexible will help you stay on track toward homeownership.
Summary
Saving for a house in Australia might seem like a big task, but with some planning and discipline, it’s totally doable. Set clear goals, budget wisely, choose the right savings tools, and take advantage of government schemes. Keep an eye on the market, improve your credit score, and explore alternative buying options. With persistence and a solid strategy, you’ll be well on your way to owning your dream home
Here at the GLOSS Vault, we have made it our mission to help as many people like you across Australia and New Zealand feel in control of your money and ensure you’re getting the most out of it. To find out more about us and what we do click here. If you’d like to see our app in action for yourself head here!