Saving a house deposit is one of the most significant financial challenges in Australia in 2026. With the national average property price above $700,000 and rents consuming over 33% of income for many households, finding money to set aside feels impossible. But it is achievable — with the right target, the right structure, and the right savings vehicles.
The first decision is whether to aim for 5% (using the First Home Guarantee) or 20% (the traditional approach). This choice dramatically changes your timeline and your total cost.
5% deposit ($35,000):
Deposit required: $35,000
Loan size: $665,000
LMI: $0 (waived under First Home Guarantee)
Monthly repayment at 6%: ~$4,280
Time to save on $2,000/month savings: ~18 months
20% deposit ($140,000):
Deposit required: $140,000
Loan size: $560,000
LMI: $0 (no LMI at 80% LVR)
Monthly repayment at 6%: ~$3,600
Time to save on $2,000/month savings: ~6 years
Difference in monthly repayment: $680/month more on 5% deposit loan.
Difference in total interest over 25 years: approximately $70,000 more on the 5% deposit loan.
The 5% route gets you into the market 4+ years sooner — which, in a market where property prices have risen 55% above pre-COVID levels, may be the financially superior decision if you can service the larger repayments.
Work backward from your target:
Monthly saving required: $35,000 ÷ 18 = $1,944/month
With 4.5% interest on savings: approximately $1,800/month required
Annual income needed to save $1,800/month (20% savings rate): $108,000 gross
Annual income needed at 30% savings rate: $72,000 gross
The simplest and most accessible option. Australian HISAs are currently paying 4.5–5.5% in 2026 on promotional rates — check comparison sites regularly as rates change. Keep your deposit savings entirely separate from your everyday account to reduce temptation to dip in.
This is the most tax-effective savings vehicle available to first home buyers and is significantly underused. The FHSS allows you to make voluntary contributions to your superannuation account and then withdraw them (plus associated earnings) for a first home deposit.
A person earning $90,000 can make $15,000 in voluntary concessional (pre-tax) super contributions per year. At their marginal tax rate of 34.5% (including Medicare), those contributions are taxed at 15% instead — saving $2,925 per year in tax. Over 2 years saving $30,000, tax savings are approximately $5,850. The FHSS allows withdrawal of up to $50,000 in total contributions plus earnings for a first home deposit.
If your purchase timeline is 12+ months away and you won't need to access the funds, term deposits currently offering 5.0–5.5% for 12-month terms can slightly outperform at-call HISA rates while still being government-guaranteed (APRA guarantee up to $250,000).
Enter your deposit target and monthly savings amount in Finrivo's Savings Goal Calculator to see exactly when you'll reach your goal — with compound interest included.
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