How to grow your home loan deposit  

When it comes to deposits, bigger is better. 

father and son sitting in lounge looking at saving for deposit

It’s a no-brainer that your first home is likely one of the biggest purchases you’ll ever make, so you want to make sure you do it right.  You’ve worked hard to save your money, so you’ll want to stretch it as far as possible. Luckily, there’s a range of options out there to help you both grow your deposit and make the most of what you have. 

Why is a bigger deposit better for first homebuyers? 

As a first homebuyer, saving up as much as possible will benefit you both now and in the future. With a larger deposit, you can; 

  • Negotiate a lower interest rate: the larger your purchase deposit, the less risk you represent to lenders. This gives you real bargaining power 
  • Pay less in the long run: with less to borrow, your repayments will be smaller, and you’ll pay less in interest over the lifetime of the loan. We have a Home Loan Repayments Calculator to help you see the difference 
  • Avoid paying Lenders Mortgage Insurance (LMI): if your deposit is 20% or more, you can don’t have to pay LMI  
  • Choose from more loans: a larger deposit gives you more options to get a good deal on the right loan and save more in the long term  

The good news is, there is a generous selection of financial support options available to first home buyers to boost your deposit and savings.  

Using superannuation for a first home deposit 

You probably know that super is money set aside for your retirement. But in 2017, the Federal Government introduced the First Home Super Saver Scheme (FHSS), which allows first homebuyers to use superannuation for a first home deposit.  As a first homebuyer, you can make voluntary super contributions of up to $15,000 per year (and $30,000 in total) to put towards the purchase of first home. When you’re ready to buy, you can withdraw these contributions — plus the returns the government estimates you have earned — and use them for your deposit.  

One of the advantages of using super to buy your first home is that your contributions are taxed at a lower rate. Essentially, more of your money goes towards growing your deposit.  

Could a Deposit Bond help you?  

A deposit bond, sometimes referred to as a deposit guarantee, is an insurance policy that is used in place of the cash deposit required between signing the contract of sale and settlement.   

Just like a cash deposit, a deposit bond guarantees your commitment to an unconditional contract of sale.   

The main benefit of using a deposit bond, is that you can defer paying the deposit until settlement. Your Aussie Broker can help with more information and assess whether a deposit bond might help you to make an offer on your chosen property. 

First homebuyers save on stamp duty 

Most states and territories have schemes available to first homebuyers to help them save money on stamp duty. You can have a look at our state-by-state breakdown of stamp duty savings or use Aussie’s Stamp Duty Calculator to see how first homebuyer incentives can help you save on stamp duty. 

Speak to an Aussie Broker 

Keep learning

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