Tips for saving a deposit

Buying a house was once considered to be the great Australian dream, but is now more difficult to make a reality.

Here are a few tips and tools to help you save a home deposit so you can enjoy your own slice of paradise in Queensland.


When you’re saving for a home deposit it can be helpful making a budget to achieve your goal quicker. When you make your budget, think about your short-term and long-term goals. By identifying weekly goals (such as cutting back on takeaway coffee or packing your lunch) you’ll have more money at the end of the week to put straight into that home deposit. Your long-term goal will be the deposit you’ll need to save based on the loan to value ratio of your new home. If you need any help there’s some tips and tricks on ways to become a better budgeter  and there’s plenty of online calculators that let you see how much you can save to meet your goals.

Catch up on your credit score

There are plenty of online tools which can provide your credit score, for free. All you need is identification (like a Queensland driver’s licence) to source your most up-to-date score. Just remember, every request can have an impact so try to do it just once or twice.

Ditch the debt

If you have credit cards or a personal loan, try to clear them as fast as possible. Although it may delay you a few months, clearing your debt will enable you to save a bigger home deposit in the long-run. If you have a couple of credit cards or different loans, it can make sense to consolidate your liabilities into one. If you’re looking for ways to achieve this, speak to a lending professional who can give you options to get back in the green. 


Take a quick check of what you’re spending and where. Look through your bank accounts and see if you can make changes in your spending habits. This can help you cut back in some areas so you can put that money towards your home deposit. If you look at incoming money versus outgoing money, you’ll be able to see how much you can save each month, which will give you a clear savings goal. Better still, knowing what you can afford to save can help you plan on saving the right size deposit for the home you want.

Loan to value ratio

Your loan to value ratio is the amount you will put in (your deposit) and the amount you will be getting finance for (your mortgage). If your new home is $500,000 and you’ve got a deposit of $50,000, your loan amount will be $450,000 making your loan to value ratio, 90%. Knowing this percentage can really help you save a little extra money when it comes to getting your loan. Usually any loan amount above 80% will require lenders mortgage insurance (LMI). If you save up enough money to avoid LMI, you can take advantage of more lending options and secure a better deal on your mortgage. Plus, it’ll give you more equity in your home.

Smart saving skills

When saving for a home deposit, every little bit helps. There are ways you can save more, by simply:

  • Limiting extras like takeaway coffee or bought lunches.
  • Making short-term goals that you can stick to which will save you money each week.
  • Moving in with your friends or family and splitting the costs of living.
  • Investing in a high interest savings account or using a term deposit to maximise your interest.

Banking and loan products issued by Members Banking Group Limited ABN 83 087 651 054 AFSL/Australian credit licence 241195 trading as RACQ Bank. Terms, conditions, fees, charges and lending policies apply. This information does not take your personal objectives, circumstances or needs into account. Read the disclosure documents for your selected product or service, including the Financial Services Guide and the Terms and Conditions, before deciding.