By Chaice Paterson, CEO & Founder, Low Deposit Homes | Updated June 2026
The real number a first home buyer in Australia needs to save in 2026 is closer to $25,000–$55,000 — not the mythical $200,000 most parents told their kids was needed. The exact target depends on which state you’re buying in and which scheme you’re using. A couple targeting a $1M Queensland new build under the 5% Deposit Scheme needs around $54,500. A couple targeting a $700K Victoria West new build needs around $25,000. A couple using Help to Buy can need under $25,000. Realistic timelines range from 12-36 months depending on income, household, and discipline — and the buyers who hit the target fastest typically work both sides of the equation: cutting expenses AND growing income. Here’s the honest plan.
What’s the actual target deposit number?
For different scenarios:
| Target property | State | Scheme | Cash on hand needed |
|---|---|---|---|
| $1,000,000 new build | QLD | 5% Deposit Scheme | $54,500 |
| $850,000 new build | QLD | 5% Deposit Scheme | $47,000 |
| $850,000 new build | QLD | Help to Buy (couple <$160K) | $22,000-$24,000 |
| $700,000 new build | VIC West | 5% Deposit Scheme | $25,000 |
| $750,000 new build | VIC North | 5% Deposit Scheme | $30,000 |
| $800,000 new build | VIC SE | 5% Deposit Scheme | $42,000 |
| $700,000 new build | VIC West | Help to Buy (single parent <$160K) | $14,000-$16,000 |
Forget the $200K myth. Most first home buyers can target $25K-$55K depending on their state, scheme eligibility, and target price.
How long does it realistically take to save the deposit?
The honest answer depends on income, household composition, and discipline. Rather than pluck specific dollar figures from the air, here’s the framing we use with LDH clients.
For a couple targeting $50K-$55K (QLD $1M new build or VIC SE $800K):
- Comfortable timeline: 24-30 months on average dual incomes ($150K-$170K combined)
- Faster timeline: 18-24 months for higher-income couples or those with strong cost discipline
- Slower timeline: 30-36 months for couples with dependants or higher rent costs
For a couple targeting $25K-$30K (VIC West/North):
- Comfortable timeline: 12-18 months
- Faster timeline: 9-12 months for higher-income couples
For a single buyer targeting $35K-$45K:
- Single income changes the math materially. Typical timeline 24-36 months for an average-income single buyer, or 18-24 months with FHSSS combined with disciplined saving and possibly side income or career progression boosting earnings.
For Help to Buy applicants targeting $15K-$25K:
- Often achievable in 9-15 months given the reduced cash requirement.
These ranges are intentionally conservative because saving timelines genuinely vary by individual circumstance. What we see consistently at LDH is that the savings target is far more achievable than buyers initially assume — most people overestimate how much they need (often by $50K-$100K) and then give up before starting.
Two levers — reduce spending AND grow income
Most savings advice focuses only on the expense side. For first home buyers, growing income is often the bigger lever — and one many buyers underuse.
Income-growth strategies that genuinely work:
Salary review and progression. When was your last pay review? Even a 5% increase on a $90K salary is $4,500 extra per year — directly to savings if your spending stays flat. Many employees haven’t asked for a review in 18+ months and would qualify for one with documented performance.
Retraining or upskilling. Some career paths reward specific certifications or training significantly. A nurse moving from base to senior or specialist designation can lift income materially. A trade apprentice completing qualification. A finance worker getting CPA or similar. Identify what the next $10K-$20K pay grade looks like in your industry and what it costs to get there.
Side income. Even $200-$300/week from side work compounds to $10K-$15K/year added to your savings rate. Some genuine options: tutoring (if you have specialist skills), freelance work in your field after hours, weekend hospitality or delivery work, online consulting. The goal isn’t 60-hour weeks forever — it’s an 18-24 month sprint focused on the deposit.
Overtime and additional shifts. If you’re in a role with overtime available, two years of consistent overtime is often the difference between “we can’t save enough” and “we’re settling next year.” Lenders treat overtime conservatively for serviceability (usually 80% of consistent overtime counts toward income), but for the savings phase it’s a direct addition to your deposit.
Job-hopping for salary growth. In some industries the only way to get meaningful salary jumps is changing employers. A 15-20% pay rise from changing jobs is common — but consider the lender impact (typically 3-6 months in a new role before banks weight new-role income at full value, so plan for that lag if you’re job-hopping right before applying for finance).
A couple where one partner moves from $85K to $100K through a promotion or a job change adds $15K to gross income, roughly $10K post-tax — that’s potentially $10K extra into deposit savings each year.
What practical savings strategies actually work?
- Automate first. Pay yourself first. Set automatic transfer to savings account on payday. Treat savings like a bill, not a residual.
- Bank account structure. Separate accounts: transaction (pay bills from), savings (high-interest, no debit card), spending (weekly amount for variable spending). Money in savings doesn’t bleed into spending.
- Track everything for 30 days. Most people genuinely don’t know where their money goes. Track every dollar for one month — almost everyone finds $200-$500/month of “leaked” spending they can eliminate.
- Big-three reviews. Housing (rent), transport (car), food (groceries + dining) are 60-70% of most budgets. A $50/week reduction in any of these compounds to $2,600/year saved.
- Subscription audit. Streaming services, gym memberships, apps. Cancel anything you haven’t used in 90 days.
- Combine income growth WITH expense discipline. The buyers who hit deposit targets fastest aren’t just cutting expenses — they’re growing income at the same time. The combination compounds.
How does the FHSSS turn saving into tax-advantaged saving?
Standard saving is post-tax. FHSSS is pre-tax — meaning each dollar saved through FHSSS effectively goes further.
Example: Sarah earns $90,000 and wants to save $15,000 toward deposit this year.
Standard savings path:
- $15,000 needs to come from after-tax income
- Pre-tax equivalent at 32.5% marginal rate: $22,222
- Tax paid: $7,222
FHSSS path:
- Salary sacrifice $15,000 into super
- Tax in super: 15% = $2,250
- Net into super: $12,750
- Earnings over 12 months: ~$700
- Withdraw at marginal rate minus 30% offset (2.5% effective) = ~$340 tax on withdrawal
- Net available for deposit: ~$13,110
Tax saved through FHSSS: approximately $4,632 — that’s $4,632 less Sarah needs to earn to deliver $13K+ to the deposit.
For a couple both maxing FHSSS over 2 years, the tax saving can total $9,000-$15,000. Genuinely valuable.
How does the “keep renting” advantage work for new builds?
When you sign a house and land contract today, the price is LOCKED. Settlement happens 4-6 months later. Construction takes another 6 months. Handover is approximately 10-12 months after you signed.
During those 10-12 months:
- You’re still paying rent (you don’t move until handover)
- You’re paying interest-only construction loan (small amounts at slab → larger at lock-up)
- Your contract price doesn’t change regardless of market movement
- You can continue saving toward move-in costs, furniture, buffer
This is a meaningful financial advantage of new builds over established home purchases. With an established home, the second you settle, you move in and pay full mortgage. With a new build, you have months of continued rental + savings before full mortgage kicks in.
How do LDH clients typically save (real patterns from 1000+ families)?
Patterns we see consistently:
Most couples take 18-30 months to save the deposit. Faster for higher-income couples or those approaching the goal with some equity (gift deposit, savings momentum). Longer for couples with kids, higher rent costs, or other commitments. The 12-month target sometimes touted online is genuinely rare unless the couple is already part-way there or has unusually high income.
Bank account structure matters more than amount. Couples who set up separate savings accounts with auto-transfer save more reliably than couples who plan to “save what’s left.”
Most successful savers cut housing first. Moving to cheaper rental during the savings sprint (or moving back with parents temporarily) is the single most impactful change.
FHSSS contributors save more in real terms. The structural commitment of salary sacrifice creates discipline that pure willpower-based saving doesn’t.
Income growth makes the biggest single difference. Couples who get a salary review, take on overtime, retrain into a higher-paying role, or add a side income source typically reach the deposit faster than couples who only focus on cutting expenses.
The “deposit gap” reframe is liberating. Once couples understand they need $25K-$55K rather than $200K, the savings goal feels achievable — and that motivation matters.
“Most first home buyers give up on saving because they’re aiming at $200K. They don’t need $200K — most LDH clients need $25K-$55K depending on where and how they buy. Once people see the real target, they save faster. And the buyers who save fastest aren’t just cutting expenses — they’re working on growing income too. Both levers matter.” — Chaice Paterson, founder of Low Deposit Homes
How do I protect savings from lifestyle creep?
Three structural protections:
- Out of sight, out of mind. Savings in a separate account at a different bank (no debit card, no online transfer to spending account without 24-hour delay) creates friction against impulse withdrawal.
- Pre-commit to milestones. Public commitment (“we’re buying a house in March 2027”) creates social accountability. Quiet personal goals are easier to abandon.
- Visualise the actual property. First home buyers who can name the corridor, the suburb, the estate, the approximate price — save more consistently than those with vague “buy a house someday” goals. Specificity drives behaviour.
Frequently Asked Questions
Q: Can I save the full deposit if I’m a single buyer? Yes — single income changes the timeline, not the destination. Typical timeline 24-36 months on an average single income, faster if you’re earning above average or grow income during the savings phase (overtime, retraining, side income). Use FHSSS aggressively, optimise housing costs, and don’t compare to two-income couples — your timeline is genuinely different.
Q: Do I need ALL the deposit before approaching LDH? No. Many clients book a discovery call when they’re 6-12 months out from their target deposit. We help map the pathway, identify the optimal scheme, set up FHSSS, and refine the target. Getting the strategy right early saves months later.
Q: What if I save the deposit and then prices rise? Build the savings buffer with the right structure (5% Deposit Scheme + FHSSS) and you’ll likely reach your target faster than typical price rises. For most buyers, the bigger risk is delay — every month rent is paid is a month equity isn’t built.
Q: Should I invest savings in shares while saving for a deposit? Generally no for short-term savings (under 5 years). Share market volatility can wipe 20% off your deposit in a year. Keep deposit savings in high-interest savings accounts or term deposits. FHSSS earnings (deemed at a fixed rate by ATO) are an exception.
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Low Deposit Homes operates under Winning Homes Australia Pty Ltd (ACN 633 321 758). All calculations are indicative. Individual circumstances may vary. This is not financial advice.