What should I consider when saving for a deposit on a property?


Some of the main things you’ll want to consider are:

  • How serious you are about getting into the property market
  • How much you’re able to spend, save and potentially borrow
  • Whether you’ll have any assistance along the way.

We take a look at these points in a bit more detail, as well as some of the ways you may be able to save for a deposit on a property sooner.

5 things to think about

Your aspirations

You might have multiple goals and lots of big-ticket items on your future shopping list, which is why it’s important to prioritise your needs and wants, and where a property purchase might rank on your list.

It’s also important to note, the most common loan terms in Australia are generally 25 and 30 years1. And, a mortgage is likely to be the biggest debt you’ll ever take on.

Another thing to think about is whether you plan on being an owner occupier, or someone who rents their property out, as this could affect what you pay over the short and long term.

What you’re looking to spend

The purchase price of the property you’re looking to buy will often determine the deposit you need. That’s why it’s a good idea to work out how much you can realistically afford.

You’ll also need to factor in other costs, such as stamp duty, legal fees and what you’ll pay in interest, noting the possibility that interest rates may rise and fall, which can have a big impact on your repayments.

If you want a snapshot of the upfront and ongoing costs you’re likely to come across, check out our article – How much does it really cost to buy property?

How much you can save

How much money you’re able to put away will come down to how much is coming in and going out, which is when drawing up a budget could come in handy. This way you can more quickly identify areas where you could be saving.

If you want to save for a deposit sooner, it might be an idea to first concentrate on reducing any money that’s owing, as well as any unnecessary spending.

Another tip—if you’re able to save a deposit that’s equal to or more than 20% of a property’s purchase price, you’ll generally be able to avoid paying lender’s mortgage insurance. This is a type of insurance that protects the lender from borrowers who can’t repay the loan.

How much you can potentially borrow

The amount of money you can borrow will come down to what you earn, owe on existing debts, and spend day-to-day.

Another thing to remember is the bigger the deposit you have, the more likely a lender will be willing to take you on as a customer.

Typically, lenders will require a minimum deposit of 10% to 20% of the purchase price, but others may lend to you if a family member pays the deposit, signs as guarantor or buys with you as a co-owner.

Will you have help?

If your family is willing to help, it’s a good idea to discuss early on how and when the money will be provided, and when and if they want the money back.

Having an agreement in place can go a long way to ensuring everyone is on the same page, and you may even consider writing down what you’ve agreed, so there’s no confusion down the track.

There could also be risks, benefits and tax implications if financial help is given, so it may be worth talking to the family’s financial adviser.

Meanwhile, if you’re buying property with a partner, it’s important to discuss both parties’ financial goals beforehand, and whether an agreement will be put in writing.

For more information on what you may want to put into writing, check out our article – Top tips when buying a property with your partner.

Ways you could get there faster

Get on top of your existing debts

Whether it's a credit card, personal loan, student tuition or car loan you’re paying off, there are many ways you can pay off your debts sooner. Check out our tips on how to control debt so it doesn’t control you.

Check out your credit record

If you’ve got a credit card, personal loan, mobile phone plan or utility account, there’s probably a credit reporting agency out there that has a file with your name on it.

Credit providers will use this information to assess whether they want to lend to you, so it’s worth getting a copy of your report to see if there are any surprises.

Track your spending

Knowing exactly what money is coming in and going out could help you to stay on top of your bills, eliminate any unnecessary fees and charges, and put more of your money where it matters most.

If you’re an AMP customer, see how you can view all your AMP and non-AMP accounts in the one place and categorise your transactions.

Consider moving back home to help you save

More than one in four Aussies aged 18 to 34 receive financial support by living at home2. If you’re in a situation where this is possible, talk to your parents about their goals as well as your own, and set up an agreement—for instance how you’ll contribute, if not financially—so everyone can live in harmony.

Invest your money to make a return

A recent study by the Australian Securities Exchange (ASX) revealed shares, along with other on-exchange investments* were the most popular retail investment choices among Aussies3.

Like with most things, if you are considering investing your money to potentially make some kind of income to put toward a deposit on a property, keep in mind there are always risks involved, so it’s important to do your research and know what you’re getting yourself into.

Need more info?

For more information check out our 9 tips for first home buyers. And, if you’d like to speak to an AMP home loan specialist, you can request a call back via our online tool.


* On-exchange investments refer to listed investments and other financial products available on a financial exchange and held through unlisted managed funds, such as shares, derivatives, and other products such as bonds and exchange traded funds.

1 Finder – How long should my home loan be? paragraph 12
2 ABS Social Trends – Young adults: Then and now paragraph 8
3 ASX Australian Investor Study 2017 pages 1, 2, 20, 40, 41, 42, 43

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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information hasn’t taken your circumstances into account.

This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.