How to Save a House Deposit in Australia: A Step-by-Step 2026 Guide

How Much Deposit Do You Actually Need?

The standard rule you'll hear is 20%. On a $700,000 home, that's $140,000. That figure avoids Lenders Mortgage Insurance (LMI) — an extra cost charged by the lender to protect themselves when your deposit is under 20%. LMI is not cheap: on a $700,000 purchase with a 10% deposit, LMI can add $12,000 to $18,000 to your loan.

But 20% is not the only path. Many first home buyers purchase successfully with 10% or even 5%, particularly when using the federal government's First Home Guarantee. The key is understanding the full upfront cost — not just the deposit itself.

The True Upfront Cost Breakdown

When lenders and government schemes talk about a "deposit," they mean the portion of the purchase price you're contributing. But the real cash you need to have ready on settlement day is higher. On a $700,000 purchase, a 10% deposit comes to $70,000. On top of that, you'll typically need to budget for stamp duty (which varies by state and can be zero if you qualify as a first home buyer in NSW for properties under $800,000), conveyancing fees of around $1,500–$2,500, building and pest inspections at $400–$800, and loan application or settlement fees. All up, the "extras" beyond your deposit typically run $3,000–$25,000 depending on state and purchase price.

Use CalcPhi's First Home Buyer Calculator to get a precise breakdown of stamp duty, FHOG eligibility, and total upfront costs for your state and purchase price in seconds.

Step 1 — Set a Real Target, Not a Round Number

The first mistake most aspiring home buyers make is saving towards a vague goal like "enough for a deposit." That's not a plan — it's a wish. You need a specific dollar target, a specific property price range, and a specific timeline.

Start with the property price that's realistic for where you want to live. Research median prices in your target suburb using CoreLogic or Domain. Then work backwards: how much is 10% (or 20%) of that figure? Add your estimated stamp duty and costs. That total is your savings target.

For example, if you're targeting a $650,000 unit in Brisbane, a 10% deposit is $65,000. Add estimated stamp duty for a first home buyer in QLD (likely around $3,850 with concessions on an existing property at that price), plus $3,000–$4,000 in other costs. Your target is roughly $72,000–$73,000. That's a concrete number you can plan around.

Step 2 — Calculate Your Savings Rate and Timeline

Once you have a target, divide it by the number of months you're willing to wait. If your target is $72,000 and you want to buy in three years, you need to save $2,000 per month. Is that realistic on your income after tax?

Use CalcPhi's Salary Take-Home Pay Calculator to see your exact net monthly income after tax and Medicare levy. If you're earning $85,000 gross, your take-home is approximately $65,000 per year — about $5,400 per month. Saving $2,000 of that (37% of take-home) is aggressive but achievable with a tight budget. Saving $1,500 per month extends your timeline to four years and requires less sacrifice.

Knowing these numbers exactly — rather than guessing — is what makes the difference between a plan that works and one that falls apart at the first unexpected expense.

Step 3 — Where to Park Your Deposit Savings

Not all savings accounts are equal. In 2026, the best high-interest savings accounts in Australia are offering between 5.00% and 5.50% per annum for new customers — but most of these come with conditions. Common conditions include depositing a minimum amount each month (often $1,000–$2,000), making no withdrawals in the calendar month, or growing the balance by at least $200.

High-Interest Savings Accounts

HISAs from banks like ING, Macquarie, Ubank, and MOVE Bank are currently among the top performers. The bonus rate typically applies for the first few months or permanently if conditions are met. These accounts keep your money accessible, which matters if you need to move quickly when you find the right property.

Term Deposits

If your purchase is 12–24 months away and you have a lump sum saved, a term deposit can lock in a guaranteed rate — sometimes 4.80% to 5.10% for 6–12 month terms in mid-2026. The trade-off is that your money is locked away, and breaking the term early usually means forfeiting a significant portion of the interest.

For most first home buyers actively building their deposit, a HISA is the better vehicle because you're adding to it regularly. A term deposit makes more sense for a stable lump sum you won't touch.

Step 4 — Government Schemes That Can Accelerate Your Timeline

First Home Guarantee (FHG)

The federal First Home Guarantee allows eligible buyers to purchase with just a 5% deposit — without paying LMI. The government guarantees the remaining 15% to the lender, meaning the lender treats it as an 80% loan-to-value ratio (LVR) loan for LMI purposes. In practice, this can shave one to three years off your savings timeline and save you $12,000–$20,000 in LMI costs.

To be eligible in 2026, you must be an Australian citizen or permanent resident, earn under $125,000 (single) or $200,000 (couple), and be buying as an owner-occupier. Property price caps apply by location — $900,000 in Sydney and NSW regional centres, $800,000 in Melbourne and Victoria, $700,000 in Brisbane and QLD. There are 35,000 places available per financial year, allocated by participating lenders.

First Home Owner Grant (FHOG)

The FHOG is a state-funded cash grant for first home buyers purchasing or building a new home. The amount varies significantly by state: $10,000 in NSW (new builds only), $10,000 in VIC ($20,000 in regional Victoria), $30,000 in QLD (temporarily for new builds — confirm current amount at time of purchase), $10,000 in WA, and $15,000 in SA.

Note that the FHOG is generally not available for established (second-hand) properties in most states. If you're buying an existing home, you likely won't receive a cash grant — but stamp duty concessions still apply.

First Home Super Saver Scheme (FHSS)

The First Home Super Saver Scheme allows you to make voluntary concessional (before-tax) contributions to your superannuation and later withdraw them — along with associated earnings — for a house deposit. These contributions are taxed at only 15% going in (versus your marginal rate), and the earnings are taxed at only 15% inside super.

From 1 July 2022, you can withdraw up to $50,000 under the FHSS. If you're contributing $500 per month in voluntary super contributions, and you're in the 32.5% tax bracket, you save roughly $87 per month in tax versus saving the equivalent after-tax. Over four years, the tax saving alone adds up to over $4,000. The FHSS is an underutilised strategy that many first home buyers overlook entirely.

Step 5 — Cut the Biggest Drains on Your Savings Rate

A savings plan lives or dies on execution. The strategy isn't complex — the hard part is maintaining it month after month. The highest-impact areas to address are typically rent (often 30–40% of income for renters in capital cities), dining out and food delivery, and subscription services. But rather than prescribing a generic budget, the most effective move is to run your own numbers.

Track your spending for one month across every category. Most people are surprised to find $300–$600 per month going to things they couldn't account for before seeing the data. Even redirecting $400 per month extra into savings shortens a 3-year timeline by about eight months.

Some first home buyers also make a meaningful dent by moving back with family for a period, even at a nominal "board" contribution — the rental savings can be $1,500–$2,500 per month, dramatically accelerating the timeline.

Step 6 — Model Your Mortgage Before You Buy

A deposit is just the beginning. Before you commit to a purchase price, you need to know what the repayments will look like — and whether they're sustainable on your income.

At a 6.24% variable rate (approximately where major banks sit in mid-2026 following RBA movements), a $630,000 loan ($700,000 purchase minus 10% deposit) over 30 years costs approximately $3,876 per month in principal and interest repayments. That's before rates move, before strata or council rates, and before maintenance costs.

It's also worth modelling how making small extra repayments each month — even $200 or $300 extra — can cut years off your loan and save tens of thousands in interest. CalcPhi's Extra Repayment Calculator shows you the full impact instantly.

Step 7 — Know Your Borrowing Power Before You Start Making Offers

There's a hard limit on how much a bank will lend you, regardless of how much deposit you have. Lenders are required by APRA (the banking regulator) to assess your ability to service the loan at 3 percentage points above the current rate. This is called the serviceability buffer. So if the advertised rate is 6.24%, the bank tests your repayments at 9.24%.

On a $90,000 gross income, your maximum borrowing power is typically around $450,000–$520,000 depending on your existing debts, expenses, and the lender's own credit appetite. On a dual income of $160,000 combined, borrowing power typically climbs to $750,000–$850,000.

Use CalcPhi's Borrowing Power Calculator to estimate your maximum loan size with the APRA buffer already applied — so you're shopping in the right price bracket from day one.

A Realistic Savings Scenario: Sarah and Tom

Sarah earns $82,000 per year and Tom earns $75,000. Combined take-home is approximately $10,500 per month after tax. They're targeting a $750,000 townhouse in Brisbane's inner ring.

Their target: 10% deposit ($75,000) plus stamp duty with QLD first home buyer concession on an existing property (approximately $12,000 at $750,000) plus $5,000 in costs — total $92,000.

They currently save $3,200 per month combined. At that rate, they'll hit $92,000 in just under 29 months — about 2 years and 5 months. By also making $400 per month each in FHSS contributions, they can redirect some of that saving into super at a lower tax rate, effectively accelerating the after-tax value of their deposit savings.

If they qualify for the First Home Guarantee, they could enter the market at $75,000 saved (5% deposit on a $750,000 property within the QLD cap), potentially buying 8–10 months earlier without paying LMI.

Frequently Asked Questions

• How much deposit do I need to buy a house in Australia in 2026?

  The minimum deposit accepted by most lenders is 5% of the purchase price, though you'll usually pay Lenders Mortgage Insurance (LMI) on anything under 20%. With the federal First Home Guarantee, eligible first home buyers can purchase with a 5% deposit and avoid LMI entirely. On top of the deposit, budget an additional $3,000–$20,000 for stamp duty (which may be zero with first home buyer concessions), legal fees, inspections, and settlement costs.

• How long does it take to save a house deposit in Australia?

  It depends on your income, existing savings, savings rate, and target property price. On a combined household income of $150,000, saving $3,000 per month towards an $80,000 target takes about 27 months. Solo savers on median incomes typically take 3–5 years for properties in capital cities. Government schemes like the FHSS and First Home Guarantee can meaningfully shorten the timeline.

• Is the First Home Super Saver Scheme worth using?

  Yes, for most people in the 32.5% or higher tax bracket, the FHSS is one of the most tax-effective ways to build a house deposit. You make voluntary super contributions taxed at 15% instead of your marginal rate, then withdraw up to $50,000 (plus earnings) when you're ready to buy. The difference in tax treatment can add thousands to your real savings over 2–4 years.

• What government grants are available for first home buyers in 2026?

  First home buyers in 2026 can potentially access the First Home Owner Grant (cash grant from state governments, typically $10,000–$30,000 for new builds), the First Home Guarantee (5% deposit, no LMI, via federal government), stamp duty concessions (which vary significantly by state — zero duty in NSW for existing properties up to $800,000), and the First Home Super Saver Scheme (tax savings on super contributions used for a deposit).

• Does the First Home Guarantee affect your interest rate?

  No. The First Home Guarantee does not increase your interest rate. The government guarantees the lender's risk (replacing the need for LMI), but you still borrow and repay at the standard variable or fixed rate offered by the participating lender. Some participating lenders may have slightly different rate offerings, so it's worth comparing options.

• What is the best savings account for a house deposit in Australia?

  In mid-2026, the best high-interest savings accounts for first home buyers are offering 5.00%–5.50% p.a. on balances when conditions are met (regular deposits, no withdrawals). Providers like ING, Macquarie, Ubank, and MOVE Bank consistently rank among the leaders. Term deposits can also be worth considering for stable lump sums with a defined purchase timeline of 6–12+ months.