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Savings tips for first home buyers

True, saving for a home deposit can be challenging, but that doesn’t need to put you off. Here are some tips that can help you get you first home savings started.

Know what you’re saving for

It’s important to know what your end goal is. At the most basic level, you know you’re saving for a home. But it’s a good idea to get more specific – get a good indication of what your borrowing capacity is and what size deposit you’ll need. There will also be a range of other expenses to cover, such as stamp duty and legal fees. Get a clear idea of what the total is you’re looking at and you’ll be in a good position to get started.

Create a budget

This doesn’t have to be a drag. A good budget is essentially a tool to show you how much money you have coming in and what expenses you have going out. When you have a clear idea of your incomings and outgoings, you’ll be in a better position to see where you might be able to cut back on expenses and find extra savings.

Be realistic about what you can save

It stands to reason that the more you save for a deposit, the less you’ll need to borrow and therefore the less interest you’ll pay. But it’s also important that you don’t set yourself up to fail. Having your budget in order will give you a good indication of what you can realistically afford to save on a regular basis. Our savings calculator can help you work out how long it will take you to save.

Have a dedicated savings account

A savings account isn’t just necessary for the obvious reason that you’ll need somewhere to save for a deposit – your lender will also want to see an established savings history to give them comfort about your ability to service a mortgage. Consider putting your savings into an account such as our Westpac Life account - you can find out more here.

Boost your savings with any extra cash

If you get a lump sum of money such as a tax return or perhaps a bonus from work, think about sticking it straight into your home deposit savings account.

Already got savings? Consider locking them away in a term deposit

As your savings grow, you might want to consider locking them away in a term deposit. A term deposit lets you lock your savings away for a set period of time (the ‘term’) at a fixed rate of interest. This gives the certainty of knowing exactly what the return on your money will be at the end of the term. Aside from benefiting from earning interest on your money, term deposits can be a good way to help steer clear of the temptation to dip into your savings because your money is locked away until the end of the term deposit length you’ve selected. Find out more about term deposits

Things you should know

1.      Bonus interest: payable each month that you: make a deposit to the account, ensure the account balance is higher at the end than the beginning of the month, and keep the account balance above $0. For bonus interest qualification, a month is the period from close of business on the last business day of the prior month to close of business on the last business day of the current month.

This information does not take into account your personal circumstances and is general in nature. It is intended as an overview only and it should not be considered a comprehensive statement on any matter or relied upon as such.