How to save for a house deposit faster

Saving a deposit can feel like the hardest part of buying your first home. The good news is it’s probably a smaller number than you think, especially once you factor in the government schemes available. The trade-off is that these schemes come with conditions, caps and a bit of fine print, so it’s worth going in with eyes open.

Here are some simple ways you can speed up the savings process.

First, know your real number

Forget the old “$250,000 deposit” number. Most first home buyers today are working with a much smaller target, often somewhere between $35,000 and $75,000, depending on your state and which scheme you use.

A full 20% deposit on the national median home ($937,722) is $187,544. At an average savings rate, that takes a typical household around 10.6 years.

A 5% deposit, is just $46,861 using the First Home Guarantee, shrinking your savings timeline by at least 2 to 3 years.

That gap is huge, and it’s genuinely good news. But it’s worth being realistic too: a smaller deposit usually means a bigger loan, higher repayments, and less buffer if interest rates move or your circumstances change. It’s worth running the numbers on repayments, not just the deposit, before deciding which path to take.

Step 1: Use first home buyer programs and schemes

These can cut years off your timeline, but each one has eligibility rules and price caps that are worth checking before you lock in a savings goal.

First Home Guarantee. Buy with just a 5% deposit, no Lenders Mortgage Insurance. Places are now unlimited, with no income caps, and it works just as well if you’re buying on your own as it does for couples. On a $600,000 property, this alone can save $15,000 to $20,000. Just note it applies to properties under a set price cap, which varies by location.

Family Home Guarantee. If you’re a single parent or legal guardian, you may only need a 2% deposit. You don’t need to be a first home buyer to qualify, which makes it useful if you’re rebuilding after a separation, but you do need to be the sole name on the loan and title. Places are capped at 5,000 for the 2025–26 financial year, so it’s worth applying through a broker sooner rather than later.

Help to Buy. A shared equity scheme where the government contributes up to 40% of a new home’s price, or 30% for an existing home. There are only 10,000 places a year, and because the government holds a share of your home, you’ll owe them a proportional share of any gain (or loss) if you sell or refinance later.

State grants and stamp duty concessions. These vary by state and can be worth tens of thousands of dollars. Deadlines and amounts do shift, Queensland’s $30,000 grant, for example, drops to $15,000 after 30 June 2026, so it’s worth checking the current dates for your state rather than relying on older figures.

Step 2: Boost it through your super

The First Home Super Saver Scheme (FHSSS) lets you save part of your deposit inside your super, where it’s taxed at 15% instead of your normal income tax rate.

You can contribute up to $15,000 a year, and $50,000 in total.

Because super often earns better returns than a savings account, this can genuinely speed things up, and it works just as well if you’re saving solo as it does for a couple splitting the load.

It takes a bit of planning ahead, since you need an ATO determination before you sign a contract. Get the timing wrong and you risk losing the tax benefit entirely, so this isn’t one to leave until the last minute.

Step 3: Put your savings somewhere that works harder

A basic transaction account earns you next to nothing. In 2026, a good high-interest savings account pays over 5% p.a.

Keep it completely separate from your everyday spending account.

Look for no monthly fees, and bonus interest for regular deposits and no withdrawals, though check what triggers the loss of that bonus rate, since a single withdrawal can sometimes drop you back to a much lower base rate for the month.

If you’re saving $1,500 to $2,000 a month, the difference between a 5%+ account and a 1% account is genuinely thousands of dollars over a year or two.

Step 4: Automate it so it’s not a decision every week

Set up an automatic transfer straight after payday, weekly or fortnightly, so the money’s gone before you can spend it.

Break your total goal into smaller milestones. Hitting a mini goal every few months keeps you motivated far better than staring at one huge number.

A consistent savings pattern also matters to lenders later. It’s what they call “genuine savings,” and most lenders want to see at least three months of it before they’ll approve your loan, so it’s worth starting this habit early rather than trying to fake momentum right before you apply.

Step 5: Grow your income, not just cut your spending

Cutting expenses only gets you so far. The buyers who save fastest usually work on both sides at once:

Extra shifts, freelance work, tutoring, or a side hustle can add up fast, especially if you send that money straight into your deposit account rather than letting it blend into everyday spending.

Selling unused items (old electronics, furniture, clothes) is a quick, easy top-up. Aim for a specific number, like $500, rather than a vague “sell some stuff.”

If it’s been a while since you asked, a pay review or renegotiation is worth considering too. Income growth tends to make the single biggest difference to how fast people reach their goal, more than any single spending cut.

Step 6: Tackle your biggest expense: housing

This is the one change that moves the needle more than almost anything else.

Moving to a cheaper rental, sharing with housemates, or moving back home temporarily during your savings sprint can free up more money than months of “no coffee” ever will.

If you’re not ready to compromise on location, consider whether a regional area or outer suburb might get you into the market sooner, even if it’s not your forever home. Just weigh that against ongoing costs like commuting, since a cheaper property in the wrong location can eat back some of what you saved.

Step 7: Clean up debt and unused credit

Credit card debt and personal loans reduce how much you can borrow later, not just how much you can save now.

Close unused credit cards and Buy Now, Pay Later accounts a few months before you apply for a loan. Lenders like to see a “clean” credit picture for at least 90 days.

If you have HECS debt, ask a broker whether it affects your borrowing power. Some lenders now treat it more favourably if it’s close to being paid off, but rules vary between lenders, so don’t assume it’ll be treated the same everywhere.

A $600k example – how government schemes can help

Say you’re saving solo for a $600,000 property in a state without a stamp duty exemption.

Full 20% deposit: $120,000. At an average single income, that could take several years.

5% deposit via the First Home Guarantee: just $30,000, with no LMI on top. Combine that with a high-interest account and FHSSS contributions, and a realistic timeline is closer to 2 to 3 years.

Same goal, very different timeline, depending on which schemes and accounts you actually use. It’s also worth remembering that a smaller deposit means a bigger loan and bigger repayments, so it’s worth checking your borrowing power and comfort with those repayments before committing to the faster path.

Who can help you get there faster

A mortgage broker can check which schemes you actually qualify for and how much they could save you, and flag any price caps or conditions that might catch you out.

A financial adviser can help you weigh up FHSSS contributions against other savings options, and check the trade-off between a smaller deposit and higher long-term repayments.

A conveyancer or solicitor can flag other upfront costs, like stamp duty and legal fees, so your savings target is realistic from day one.

You don’t need to have it all mapped out before you start. Getting the right advice early usually saves more time, and helps you avoid a costly mistake, than any budgeting app ever will. Connect with a trusted expert now, in the Penny app.