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Top Tips for Saving for a House Deposit - February 2016
Are you trying to save for a deposit on your dream house? A bigger deposit can make it easier to obtain a loan and will obviously reduce your monthly mortgage payments. You'll have more equity in the property straight away too.
If you’re trying to save for a deposit, consider these strategies:
1. Set a deposit goal. It’s easier to save if you have a clear goal for your deposit. Look at houses in your price range and talk to real estate agents to get an estimate of how much money you’re looking at to buy your home. A minimum of 20% of the cost is a good goal. If you can wait and save more - even just another 5%, you'll save thousands in interest and time and own your property sooner.
2. Use traditional savings accounts. A traditional savings account at a bank has both advantages and disadvantages.
· One of the benefits is being able to withdraw and use your money quickly. Another advantage is that there aren’t any fees for withdrawing the savings. You have instant access to the account and can use it.
· The downsides of traditional savings accounts are the possibility of monthly fees and low interest rates, so your money doesn’t earn much.
3. Try the $5 note savings plan. The $5 note savings plan is a simple process to reach your deposit savings goal more quickly.
· In addition to your regular savings routine, this plan involves saving a $5 note every time you get one from a bank, friend or store. If you get a $5 note or multiple $5 notes as change, then you save them. Deposit them on a regularly to earn interest.
4. Take advantage of automatic savings transfers. It’s easy to forget to add money to your savings accounts. If you’re worried this will happen to you, set up automatic transfers from your pay to your savings account.
· You can choose the amount and frequency of the automatic transfers.
· One of the advantages of this strategy is that you can choose an amount you wouldn’t really miss from your pay. What you never see, you can’t spend, either. Your savings will grow automatically.
5. Apply for the First Home Owner Grant (FHOG). This is a national scheme for first home buyers. Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria. Check for state funded schemes too and apply for them if you qualify. Find out more here: http://www.firsthome.gov.au/
If you’re trying to save for a deposit, consider these strategies:
1. Set a deposit goal. It’s easier to save if you have a clear goal for your deposit. Look at houses in your price range and talk to real estate agents to get an estimate of how much money you’re looking at to buy your home. A minimum of 20% of the cost is a good goal. If you can wait and save more - even just another 5%, you'll save thousands in interest and time and own your property sooner.
2. Use traditional savings accounts. A traditional savings account at a bank has both advantages and disadvantages.
· One of the benefits is being able to withdraw and use your money quickly. Another advantage is that there aren’t any fees for withdrawing the savings. You have instant access to the account and can use it.
· The downsides of traditional savings accounts are the possibility of monthly fees and low interest rates, so your money doesn’t earn much.
3. Try the $5 note savings plan. The $5 note savings plan is a simple process to reach your deposit savings goal more quickly.
· In addition to your regular savings routine, this plan involves saving a $5 note every time you get one from a bank, friend or store. If you get a $5 note or multiple $5 notes as change, then you save them. Deposit them on a regularly to earn interest.
4. Take advantage of automatic savings transfers. It’s easy to forget to add money to your savings accounts. If you’re worried this will happen to you, set up automatic transfers from your pay to your savings account.
· You can choose the amount and frequency of the automatic transfers.
· One of the advantages of this strategy is that you can choose an amount you wouldn’t really miss from your pay. What you never see, you can’t spend, either. Your savings will grow automatically.
5. Apply for the First Home Owner Grant (FHOG). This is a national scheme for first home buyers. Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria. Check for state funded schemes too and apply for them if you qualify. Find out more here: http://www.firsthome.gov.au/