How to Save for a House Deposit in Australia (2026)
Saving a home deposit is the biggest financial challenge for most Australian first home buyers. Depending on the city and target property, a 20% deposit can require $100,000–$290,000 in savings — typically taking 5–15 years at average income and savings rates.
The good news: a combination of smart savings strategies, government schemes and tax-efficient tools can significantly reduce the time required.
How Much Do You Need to Save?
5% Deposit (using First Home Guarantee)
| City | Median Property Price | 5% Deposit | Est. Other Upfront Costs | Total Savings Target |
|---|---|---|---|---|
| Perth | ~$780,000 | $39,000 | ~$5,000 | ~$44,000 |
| Adelaide | ~$770,000 | $38,500 | ~$5,000 | ~$43,500 |
| Brisbane | ~$900,000 | $45,000 | ~$5,000 | ~$50,000 |
| Melbourne | ~$940,000 | $47,000 | ~$5,000 | ~$52,000 |
| Sydney | ~$1,450,000 | $72,500 | ~$5,000 | ~$77,500 |
First Home Guarantee price caps apply — a Sydney median property is above the NSW cap of $900,000. See First Home Guarantee eligibility. Stamp duty excluded where FHB exemptions apply.
20% Deposit (standard — avoids LMI)
| City | Median Property Price | 20% Deposit | Total Savings Target (incl. costs) |
|---|---|---|---|
| Perth | ~$780,000 | $156,000 | ~$165,000 |
| Adelaide | ~$770,000 | $154,000 | ~$163,000 |
| Brisbane | ~$900,000 | $180,000 | ~$190,000 |
| Melbourne | ~$940,000 | $188,000 | ~$200,000 |
| Sydney | ~$1,450,000 | $290,000 | ~$310,000 |
How Long Will It Take?
Based on saving $1,500/month after tax — a realistic target for a single person on $80,000–$90,000 after rent:
| City | 5% Deposit Target | Time to Save | 20% Deposit Target | Time to Save |
|---|---|---|---|---|
| Perth / Adelaide | ~$43,000 | ~2.4 years | ~$163,000 | ~9 years |
| Brisbane | ~$50,000 | ~2.8 years | ~$190,000 | ~10.5 years |
| Melbourne | ~$52,000 | ~2.9 years | ~$200,000 | ~11 years |
| Sydney | ~$77,500 | ~4.3 years | ~$310,000 | ~17 years |
Assumes $1,500/month savings at 5.00% interest. For joint savers ($3,000/month combined), halve the timeframes.
Strategy 1 — Use the First Home Super Saver (FHSS) Scheme
The FHSS scheme allows you to make voluntary contributions to your superannuation and later withdraw them (up to $50,000 total, $15,000/year) to put toward a home deposit. The benefit is a tax saving:
- Contributions are taxed at 15% inside super (instead of your marginal rate, which may be 32.5%–47%)
- On a $15,000 contribution at a 32.5% marginal rate, the tax saving is approximately $2,625 per year
- Over 3 years at $15,000/year: $50,000 withdrawn, with a tax saving of ~$7,500–$9,500 vs regular savings
FHSS contributions are best made through salary sacrifice (concessional contributions) for maximum tax efficiency. See FHSS guide for first home buyers for the full mechanics.
Strategy 2 — High-Interest Savings Account
In April 2026, the highest savings account rates in Australia are approximately 5.00–5.50% p.a. for balances under $250,000. Compare offers from ING, Macquarie, UBank, HSBC and various credit unions.
Impact of interest rate on savings growth:
| Monthly Savings | Rate | After 3 Years | After 5 Years |
|---|---|---|---|
| $1,500 | 2.00% (old low-rate era) | $56,100 | $95,500 |
| $1,500 | 5.00% (current high-rate) | $58,900 | $102,000 |
| $2,500 | 5.00% | $98,200 | $170,000 |
Earning 5.00% on savings adds approximately $5,000 over 3 years compared to a low-rate account — essentially a free year of saving.
Tips for maximising savings rate:
- Many high-rate accounts require monthly deposit and transaction activity — read the conditions
- Term deposits lock in a rate for a fixed period — useful if you’re 1–2 years from buying
- Savings account interest is taxable income; factor this into your net return
Strategy 3 — Budget to Maximise Monthly Savings
The single biggest lever is how much you save each month. A detailed budget often reveals $300–$600/month in spending that can be redirected to the deposit fund.
Common areas where savings can be found:
- Dining out and takeaway — the highest-discretionary spend category for most Australians
- Subscriptions — streaming, gym memberships, software
- Car costs — consider whether a car is essential; public transport may free up $500–$800/month in loan/insurance/fuel
- Rent — moving to a cheaper area, getting a flatmate, or moving home temporarily
The “savings first” approach: Transfer the target savings amount immediately on payday. Treat it like a bill. What remains is available for spending. This is more effective than saving “what’s left over.”
Strategy 4 — Use the First Home Guarantee to Buy Sooner
Rather than saving toward a 20% deposit, consider whether buying sooner with a 5% deposit (using the First Home Guarantee) makes more sense financially.
Trade-off analysis:
| Approach | Time to Buy | LMI Cost | Extra Years of Rent Paid |
|---|---|---|---|
| Save 20% deposit (Melbourne median) | ~11 years | $0 | ~11 years |
| Buy with 5% via FHBG (within cap) | ~3 years | $0 (scheme) | ~3 years |
If Melbourne property appreciates at 4% per year, a $800,000 property bought 8 years earlier avoids approximately $260,000 in foregone capital growth — far exceeding the extra loan interest from a higher LVR. This is not a guarantee — property values can also fall.
Strategy 5 — Family Assistance
Parents can help accelerate deposit savings through:
- Cash gift — many lenders require evidence that gifted funds are unconditional; see gifted deposit guide
- Guarantor arrangement — parents use equity in their home to guarantee part of your loan, avoiding LMI without the full deposit; see going guarantor risks
- Family pledge/equity guarantee — a common lender product that uses parental property as additional security
Frequently Asked Questions
How long does it take to save a home deposit in Australia? At $1,500/month saved, a 5% deposit for a median-priced property takes approximately 2.5–4.5 years depending on the city. A 20% deposit takes 9–17 years. Using the FHSS scheme and a high-interest savings account can meaningfully reduce these timeframes.
What is the fastest way to save for a house deposit? The fastest legitimate strategies are: (1) maximise savings rate with a high-interest account or term deposit; (2) use the FHSS scheme for the tax efficiency boost; (3) consider buying sooner with a 5% deposit via the First Home Guarantee rather than waiting years for 20%.
Can I use my superannuation for a house deposit? Only through the FHSS scheme, which uses voluntary contributions you make — not your compulsory employer super. You cannot access your compulsory superannuation for a house deposit.
How much should I save each month for a house deposit? It depends on your target. As a rough guide: to save $50,000 in 3 years, you need to save approximately $1,300/month (at 5.00% interest). To save $150,000 in 5 years, you need approximately $2,200/month.
Related Guides
- How Much Deposit Do I Need?
- FHSS Scheme — Using Super for Your Deposit
- First Home Guarantee Explained
- First Home Buyer 5% Deposit Options
- First Home Buyer Hub
This article provides general information only. Savings projections are estimates based on assumed interest rates and savings amounts. Actual results depend on individual circumstances. For advice tailored to your situation, speak with a licensed mortgage broker or financial adviser. Find one through MoneySmart.