There is no getting around it.  As a first homebuyer you are likely to need a deposit to secure finance for your home.  Saving enough for a deposit can be tricky, but with our plan you will find saving much easier.  

1) Reduce Your Debt
The interest that you are paying on your credit cards, car loan, personal loan or store cards is almost certainly too high.  Some credit card rates can be as much as 20 per cent.  Pay down debt and reduce the amount of interest you are paying.  Pay off this debt faster to increase your chances or securing a mortgage.  When you reduce your debt, put any extra money into a savings account and accumulate the interest for yourself.  After a year, your savings could have grown considerably faster.  

2) Savings Plan
It may sound boring but it must be done.  Set up a regular payment so that part of your income automatically goes into a savings account.  Any bonuses or tax returns you receive should go straight into savings.  This is an important piece of first home buyer advice, take it on board and consider how much you could save.

3) Review Your Expenses
Take a look at your spending.  Your $3.50 morning coffee habit adds up to a whopping $900 per year, think how useful that would be if you are saving for a deposit.  Look for ways to save on your mobile phone bill, living arrangements, insurance policies or groceries.  Sometimes you can receive discounts for paying your power bill by direct debit, or perhaps you could switch to a cheaper plan with your gym membership. Use your budget to boost your savings and demonstrate your ability to successfully save money and meet your mortgage repayments.

4) Government benefits and grants
A range of government grants and discount schemes are available for eligible buyers buying first homes. These schemes can increase your borrowing capacity and, in some cases, your grant can be included as part of your deposit. The First Home Owners Grant was increased in 2008 but is now due to be reduced as of 31 December 2009.  The original first home owners grant of $7,000 is still available to eligible first home buyers after December 31. 

The First Home Owner Grant and the First Home Builders Grant can go along way toward your deposit and in addition, many state and territory governments offer discounts and exemptions on stamp duties. Check with the relevant state or federal authority for details and eligibility, and you may be on your way to buying your first home.


5) Investments
Get your savings earning money - either in a high interest savings account, a term deposit or a First Home Saver Account. Look for ways to invest that you feel comfortable with.  Weigh up the pros and cons and look the risks involved.  All investments carry some element of risk, but some are better than others.  A First Home Saver Account or other high interest account is relatively low risk. Shares may grow your money fast, but also come with many risks.  Talk to an independent financial advisor about your options.




6) Earn Some Extra Money
If reviewing your budget and spending still doesn’t give you the money you require, then consider ways to increase your income.  Perhaps you could find a second job, organise a garage sale to sell all the things you no longer use, or use a lump sum gift from generous parents.  Get creative and look for ways to boost your income and savings.


Maximising your deposit can get your into your first home sooner, and also demonstrates to lenders that you can save responsibly, putting you in a better light when applying for finance.  Your mortgage broker may have some other ideas and useful ways to maximise your deposit for a first time mortgage.  Call and find your local broker on 1300