According to new research, it is taking young couples approximately five years on average to save for a 20% home loan deposit. 

It has never been tougher to save a deposit for your first home. In Sydney, the average timeframe is 8+ years, and in Melbourne, the average timeframe is 6.5 years. And in most other places across the country it is between 4 to 6 years.

That is unless you know a finance professional who can help first home buyers purchase a home with just a 5% deposit, and not pay any lender’s mortgage insurance in the process.

So, how do we do that? Well if you are eligible, we can hook you up with the First Home Guarantee (FHG) scheme, which will release 35,000 places from 1st of July. By getting in early on this scheme and reserving a spot, you can quarter the amount of time it takes to save up for your first home deposit.

Check Out These Stats

Here you will see how long it is currently taking first home buyers to save for a 20% home loan deposit (according to Domain data), compared to saving just 5%

Sydney: 8 years 1 month (20%), down to 2 years (5%).
Melbourne: 6 years 6 months (20%), down to 1 year 7 months (5%).
Brisbane: 4 years 10 months (20%), down to 1 year 3 months (5%).
Adelaide: 4 years 7 months (20%), down to 1 year 2 months (5%).
Perth: 3 years 7 months (20%), down to 11 months (5%).
Hobart: 5 years 10 months (20%), down to 1 year 5 months (5%).
Darwin: 4 years 3 months (20%), down to 1 year (5%).
Canberra: 7 years 1 month (20%), down to 1 year 9 months (5%).
Combined capital cities: 5 years 8 months (20%), down to 1 year 5 months (5%).
Combined regionals: 3 years 10 months (20%), down to 11 months (5%).
Australia-wide: 4 years 5 months (20%), down to 1 year 1 month (5%).

So, if you have been saving towards a 20% deposit for at least a year, you could be ready to hit the ground running when the 35,000 FHG schemes become available on the 1st of July.

The First Home Guarantee Scheme

The First Home Guarantee scheme (previously the First Home Loan Deposit Scheme) allows eligible first home buyers to build or purchase a home with only 5% deposit without paying lenders’ mortgage insurance (LMI). This is because the federal government guarantees (to a participating lender) up to 15% of the value of the property purchased.

By not paying LMI, a buyer can save anywhere between $4,000 and $35,000 depending on the property prices and deposit amount (it’s also worth noting that property price caps apply).

But places in this scheme are on a first-come, first-served basis. Don’t let the recent expansion of 35,000 spots lull you into a sense of complacency as they will go fairly quickly, which means that if you are interested, you will want to get in touch with us asap to ensure you are ready to lodge the application when the 1st of July comes along.

Phone: 1300 855 022

Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.

About the Author:

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.