Home ownership is the dream of most Australians. The first step in reaching your goal of owning your own home is saving enough for a deposit. It sounds easy, but rarely is.
So here are a few simple tips to help you save a deposit, while still having funds to have a life.
Review your current financial position and establish a budget.
Understand your current financial position and spending habits. Often you will be competing with other demands on your salary like credit card or car payments, phone bills and other expenses.
You can use our simple and easy Budget Planner calculator to input details of all your expenses and receive an easy to read summary for your own use.
You’ll be able to see;
- what money is coming in and going out each month;
- how much you can afford to save regularly for your deposit; and,
- where you might be able to cut back.
Use our Budget Planner calculator.
Open a savings account.
Transfer your savings amount into a separate savings account that you won’t access as soon as you’re paid.
Make sure you put your deposit savings into a high-interest savings account or Max e saver or term deposit. You'll earn a lot more interest compared to a transaction account.
Establish a savings plan.
A great way to boost your savings is to transfer money to a savings account as soon as you're paid. Ask your work to send part of your pay directly to a savings account or set up an automatic transfer from the account your wage is paid into.
Automatic transfers let you 'set and forget'. You can grow your savings without having to worry about transferring money each pay.
Set up Round Ups on your transaction account.
Save as you spend by setting up Round Ups on your everyday transactions. Every little bit counts.
It’s an optional feature that rounds up the value of certain transactions debited from your everyday access account and automatically transfers the amount from your transaction to the nearest $1, $5 or $10.
You can choose to add Round Ups at any time via mobile banking.
Find out more about Round Ups.
Work on your genuine savings.
Genuine savings is a term used to describe funds that borrowers have saved gradually by themselves.
When assessing a mortgage application, a lender will want to see that you have regularly saved money over time in order to evaluate whether you have the capacity to make your monthly repayments.
Every lender has its own definition and requirements for genuine savings, which will depend on the amount that you borrow, and some may not even require it at all.
As a general rule, lenders will accept as genuine savings any funds that amount to 5% or more of the purchase price.
These include:
- Savings held or accumulated over at least three months.
- Term deposits held for at least three months.
- Shares or managed funds held for at least three months.
- Cash gift held for at least three months.
- Inheritance funds held for at least three months.
- Contributions from the First Home Super Saver Scheme.
On the flip side, the following will not be considered genuine savings:
- Monetary gifts.
- Inheritance.
- Tax refund.
- Bonuses from work.
- Profit from the sale of an asset other than property, such as a vehicle.
- First Home Owners Grant.
- Borrowed funds.
- Short-term cash savings.
The reason why they are not accepted by lenders is that they do not demonstrate good saving habits.
Find out more about genuine savings.
Actively manage your money.
Stay in control of your money. Using our award-winning mobile app and online banking you can set up free SMS or email notifications for things like:
- When a debit or credit transaction is processed through your account.
- When a balance or transaction threshold limit is reached.
- Receive an alert 5 days before a selected payment is due.
Need to talk to someone?
When you begin to think about purchasing your home, talk to one of Defence Bank’s home loan consultants. They can;
- talk through your options and inform you of any government support or incentives currently available;
- help you structure your savings to help you achieve your goal; and,
- outline which home loan is suitable for you.
Find a Defence Bank Home Loan Consultant near you.
Important note: This information is of a general nature and is not intended to be relied on by you as advice in any particular matter. You should contact us at Defence Bank to discuss how this information may apply to your circumstances.
