Top 6 Concerns When Budgeting for a House Deposit

Saving for a home in 2025 isn’t just about hitting that illusive deposit amount—it’s about knowing what comes next. From surprise costs to sneaky insurance fees, We are going to look at the 6 biggest budgeting concerns Aussies are currently facing (and of course, how we take them off your plate).

Top 6 Concerns When Budgeting for a House Deposit

1. SKYROCKETING PROPERTY PRICES
Property prices have been on a relentless upward trajectory, making it increasingly challenging for first-time buyers to save enough of a deposit. In some cases, even a decade of diligent saving hasn't kept pace with the market, leaving many feeling like they're chasing a moving target.

👉 We help you set smart targets based on real-time market data, so you’re not left chasing your tail.

2. BALANCING SAVINGS WITH LIVING EXPENSES
The cost of living—rent, groceries, utilities—continues to rise, making it difficult to allocate funds toward a deposit. Many find themselves in a catch-22 situation: paying super high rent while trying to save for a mortgage that could potentially be more affordable.

👉 We’ll walk you through realistic ways to align your goals with what lenders look for—without the overwhelm.

3. UNDERESTIMATING ADDITIONAL COSTS
Beyond the deposit, buyers often overlook additional expenses like stamp duty, legal fees, building inspections, and moving costs. These can add tens of thousands to the upfront cost, catching many off-guard.

👉 We map out all the upfront costs—no surprises, no gotchas—so you're fully prepared.

4. LENDERS MORTGAGE INSURANCE (LMI)
Saving less than a 20% deposit typically incurs LMI, which can be a substantial added expense. For a $500,000 loan with a 5% deposit, LMI can range from $15,000 to $20,000, further stretching budgets.

👉 We help you avoid or reduce LMI where possible by accessing government schemes or strategic lender options.

5. NAVIGATING GOVERNMENT SCHEMES
Various government initiatives, like the First Home Guarantee, aim to assist buyers. However, understanding eligibility criteria and long-term implications can be complex, leading to confusion and hesitation.

👉 We do the legwork to match you with the right scheme—fast, clear, and with zero jargon.

6. ECONOMIC UNCERTAINTY AND INTEREST RATES
Fluctuating interest rates and economic instability add another layer of concern. Potential buyers worry about future rate hikes affecting their mortgage repayments, making them cautious about committing to a purchase.

👉 We stay ahead of the market,so you get loan options that work for you now and after the fact.

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EDUCATE – KNOW YOUR STUFF

Buying a home involves more than just the deposit. Additional expenses can significantly impact your budget; you need to be aware of what these might be:

• Stamp (Transfer) Duty: A government tax based on the property's price and location. For example, in Queensland, stamp duty on a $620,000 home could be around $16-$20k!
• Lenders Mortgage Insurance (LMI): If your deposit is less than 20% of the property's value, lenders may require LMI, which can add thousands to your upfront costs.
• Legal and Conveyancing Fees: Hiring professionals to handle the legal aspects can typically costs between $1,000 and $2,500.
• Building and Pest Inspections: Essential for identifying potential issues, these inspections usually cost between $400 and $700.
• Loan Application and Bank Fees: These can include valuation fees, settlement fees, and other charges, totalling up to $1,000 or more.
• Moving Costs: As well as the obvious expenses of hiring movers, renting trucks, purchasing packing materials, moving utilities etc, these can add up very quickly.

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GOVERNMENT ASSISTANCE

Several government schemes are designed to assist first-home buyers

• First Home Owner Grant (FHOG): This is a one-time grant for eligible first-home buyers purchasing or building a new home. The amount and eligibility criteria vary by state.
• First Home Guarantee: Allows eligible buyers to purchase a home with as little as a 5% deposit without paying LMI, subject to property price caps, income thresholds and spots available (currently 35,000 nationwide).
• STAMP (Transfer) Duty Concessions: Stamp duty (now often called transfer duty) is a state government tax paid by the buyer when purchasing property or land in Australia, and it's based on the purchase reason, price and location.  Some states offer reduced or waived stamp duty for first-home buyers, this depends on the property's value and location. Eligibility Criteria applies.
• Help to Buy Scheme: A shared equity scheme where the government contributes up to 40% (30% for existing homes) in exchange for a share (part interest) in the property.  You must have at least 2% deposit, but this reduces the amount you need to borrow and the need for LMI (you will need to have finance approved for your portion). BUT beware, you are not the properties full owner, there are ongoing constraints; eligibility, property criteria and limited places available in the scheme. (expected launch late 2025)

These programs can significantly reduce the financial barriers to homeownership. BUT BUYER BEWARE - It's essential to check the specific eligibility requirements and application processes for each scheme,available to start with on your local government website.

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PRACTICAL TIPS

Saving for a home requires discipline and strategic planning,some tips to consider;

• Set Clear Goals: Determine how much you need for your deposit and associated costs, then create a realistic timeline to achieve it.

• Create a Budget: Track your income and expenses to identify areas where you can cut back and allocate more towards savings.
• Automate Savings: Set up automatic transfers to a dedicated savings account to ensure consistent contributions.
• Reduce Unnecessary Expenses: Limit discretionary spending, such as dining out or subscription services, to boost your savings rate.
• Increase Income: Consider side gigs or freelance work to supplement your income and accelerate your savings.
• Utilize High-Interest Savings Accounts: Maximize your savings growth by placing funds in accounts that offer competitive interest rates.

Implementing any or all these strategies could help you reach your savings goal more efficiently.

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GET YOURSELF SOME PROFESSIONAL ADVICE

Navigating the home-buying process can be a lot! Professional guidance can make it smoother:

• Mortgage Brokers: We have access to a wide range of loan products from various lenders and can help you find a mortgage that suits your individual financial     situation. We help alleviate the complexity and stress.
• Financial Advisors: They can help you assess your overall financial health, set realistic goals, and develop a comprehensive plan to achieve homeownership.
• Legal Professionals: Engaging a solicitor or conveyancer ensures that all legal aspects of the property purchase are handled correctly, protecting your interests.

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💬FINAL WORD

Look, the guy down the road may be fabulous, but unless they are a professional in this particular field, their “help” are honestly just their opinions, no matter how well intentioned. Talking it through with friends and family can be helpful, but SEEKING expert advice can save you time, reduce stress, and potentially save you a lot of money by helping YOU make the right informed decisions for🫵getting🫵into your home sooner!

✅ READY TO PLAN SMARTER—NOT HARDER?

Let’s talk strategy, savings, and smashing your property goals. Click Here to book a Plan Smarter Not Harder Chat

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