# Saving for a House Deposit on a Normal Pay

> A realistic house deposit plan for Australian renters: compare 5% and 20%, allow for buying costs and see which first-home schemes could shorten the wait.

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- Author: Marnix
- Published: 2026-10-06



Saving for a home on an ordinary pay can feel like chasing a number that keeps moving. Prices rise, rent takes a big share of each pay and the old advice about a 20% deposit makes the goal look decades away.

A local price range gives you something to plan around. From there, you can work out the deposit needed and what a steady amount from each pay can get you.

## Choose a price you can work towards

Look at recent sold prices for homes you could live in, in an area that works for getting to work. A unit or smaller place might give you a different starting point from the houses filling your feed.

Then separate two questions: how much cash would buying take, and could your pay carry the repayments afterwards? A smaller deposit can bring the first closer without making the second any easier.

## You don't always need a 20% deposit

A deposit is your own contribution to the purchase price. The home loan covers the rest. Saving 20% usually avoids lenders mortgage insurance, or LMI, provided the lender's valuation supports the price. LMI protects the lender if you can't repay; it doesn't protect your income or cover your repayments. With a smaller deposit, it may be charged unless a scheme or exemption applies.

The **Australian Government 5% Deposit Scheme** lets eligible buyers purchase with a minimum 5% deposit and no LMI. There are no income caps or limits on places, but property price caps and other eligibility rules still apply. You apply through a participating lender, which also assesses whether it will lend to you. The guarantee isn't money paid into your account, and you remain responsible for the whole loan.

Use the [scheme's eligibility steps](https://firsthomebuyers.gov.au/australian-government-5-percent-deposit-scheme) and [postcode price-cap lookup](https://firsthomebuyers.gov.au/australian-government-5-percent-deposit-scheme/property-price-caps) before relying on it. It is for a home you live in, with ongoing occupancy conditions.

On a hypothetical $600,000 home, the loan with a 5% deposit would be $570,000, compared with $480,000 at 20%, before any added fees. That's $90,000 more borrowing. Knowing the repayments first helps you choose a target you can afford.

## What the wait looks like on one ordinary pay

Meet Jordan, a made-up 27-year-old renter taking home $2,200 a fortnight. After rent, living costs, bills and other commitments, Jordan can keep $400 from each pay for buying a home.

Jordan is using a $600,000 unit as a working price, starting with nothing saved. Here is the deposit-only wait at that pace.

| Deposit | Cash (AUD) | Saving time |
| --- | ---: | --- |
| 5% | $30,000 | About 2 years 11 months |
| 10% | $60,000 | About 5 years 9 months |
| 20% | $120,000 | About 11 years 6 months |

Deposit only, saving $400 per fortnight from zero with no interest or withdrawals.

Even the shorter wait is substantial while you're renting. A smaller deposit changes the hurdle, but the larger loan still needs to fit your pay.

## Leave room for the costs beyond the deposit

Buying costs need cash of their own, with emergency money kept for after moving in. Emptying every account at settlement leaves a broken hot-water system with nowhere to go except debt.

The list to price is:

- Stamp duty, the state tax on the purchase, after any first-home exemption or concession.
- Conveyancing or legal work to handle the purchase, plus building and pest inspections or strata records for a unit.
- Lender, valuation and registration fees where payable, insurance and settlement adjustments for costs such as council rates.
- Moving and basic setup, with an [emergency reserve](/blog/emergency-fund) kept apart from the money being spent.

Get quotes for the property you're considering and use the state links below for duty. Jordan adds an allowance for costs and a reserve to see how the target changes.

| Deposit | Deposit (AUD) | Costs and reserve (AUD) | Cash to save (AUD) |
| --- | ---: | ---: | ---: |
| 5% | $30,000 | $10,000 | $40,000 |
| 20% | $120,000 | $10,000 | $130,000 |

At 5%, buying costs and a retained reserve are a quarter of the cash target. Replace the $10,000 with quoted costs, duty after concessions and your own reserve.

That combined target takes **about 3 years 10 months** at Jordan's saving rate. The same allowance with a 20% deposit gives a $130,000 target, taking about 12 years 6 months.

## Check assistance before setting the final target

Government help does different jobs. The guarantee removes the LMI barrier for eligible borrowers. A grant contributes money. A stamp duty concession reduces a bill. Keep those separate when working out what you still need to save.

### Voluntary super savings can help with the deposit

The First Home Super Saver scheme, or FHSS, lets eligible buyers release certain voluntary super contributions and calculated earnings for a first home. It can offer tax benefits, but ordinary employer super payments don't count. If you're new to the distinction, our guide to [super in your first job](/blog/super-first-job) explains how super contributions work.

Up to $15,000 of eligible contributions per financial year can count, with a $50,000 total contribution limit per person. Those are contribution limits, not guaranteed cash in hand. Contribution tax, release tax and the calculation of earnings affect what you receive, and ordinary super contribution caps still apply.

Check the [FHSS rules and release process](https://firsthomebuyers.gov.au/first-home-super-saver-scheme), including contract deadlines, before putting extra money into super.

### Grants and stamp duty depend on your state

These are starting points for eligible first buyers. Ownership history, residence rules, contract details and property type matter, including a partner's circumstances. A new-home grant generally won't help with an ordinary established home.

- **Victoria:** a $10,000 grant for eligible new homes valued up to $750,000. First-home duty is removed up to $600,000, with a reduced bill above that to $750,000. Check [Victoria's first-home assistance](https://www.vic.gov.au/support-first-home-buyers).
- **NSW:** a $10,000 grant for eligible new-home purchases up to $600,000; land plus a qualifying building contract has a combined $750,000 limit. Duty is removed on eligible new or existing homes up to $800,000, with partial relief above that and below $1 million. Check the [grant](https://www.revenue.nsw.gov.au/grants-schemes/first-home-owner-new-homes-grant) and [duty assistance](https://www.revenue.nsw.gov.au/grants-schemes/assistance-scheme?cid=011101) separately.
- **Queensland:** a $30,000 grant for eligible new homes valued below $750,000 including land. Eligible established homes have no duty up to $700,000 and partial first-home relief above that and below $800,000. Qualifying new homes can have duty reduced to nil without a value cap. Check the [grant](https://www.qld.gov.au/housing/buying-owning-home/home-buyers-financial-help/first-home-owner-grant) and [duty rules](https://www.qld.gov.au/housing/buying-owning-home/home-buyers-financial-help/transfer-duty), including contract requirements.

A grant may arrive too late for the payment due when you sign. Have the lender and conveyancer map when each amount is needed, including FHSS money, before subtracting assistance from your cash target.

## Give the next pay an amount it can carry

Start with what actually reaches your account. Take away rent, food, transport, repayments and bills, including money being set aside for annual costs. Then choose an amount you can keep saved through an ordinary fortnight. A transfer that has to come back for groceries was too large.

Jordan's amount is a useful comparison, not a test to pass. A smaller transfer still builds options, even if it doesn't yet put a home within reach. Our [savings goals guide](/blog/savings-goals) explains how to turn a total into a payday plan. After trying one or two pays, you can [try it yourself in the savings goal planner](/tools/savings-goal-planner) with your target and what you've already saved.

Keep the deposit separate from everyday spending. Compound interest means saved interest earns interest too, so [compare savings accounts and their conditions](/blog/high-interest-savings-account) as part of your payday plan.

Clova, our budgeting app, gives each pay allocations for bills, savings and spending. Your deposit contribution sits beside the costs it needs to fit around.

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A tax refund or pay rise can move the target closer, once other commitments are covered. When rent rises instead, change the saving amount and date together. Keeping an impossible deadline doesn't make the money appear.

## Check the life that comes with the loan

Before committing, price the repayments alongside council and water charges, insurance, maintenance and any strata or owners-corporation fees. Ask how the budget would cope if the interest rate rose by two percentage points or your income fell. Lender approval doesn't tell you how much breathing room daily life will have.

A lender can assess the loan, a conveyancer can check buying costs and a registered tax agent can help with FHSS. If existing debts or essential bills are unmanageable, the [National Debt Helpline](https://ndh.org.au/) offers free financial counselling on **1800 007 007**.

Your next step can be finding one local price range or keeping the first contribution saved through a whole pay cycle. Neither commits you to buying before you're ready.

## A note from us

A deposit plan should start from the pay you actually have and give you an honest date, even a distant one. Clova brings every bank account into one view, so a deposit saved at one bank and rent paid from another show up side by side.

All amounts are AUD. Savings start at zero, with $400 contributed after each fortnight. No interest, fees, withdrawals, assistance or changes in pay and property price are modelled.

On a $600,000 home, deposits of 5%, 10% and 20% require 75, 150 and 300 contributions. At 26 per year, rounded to the nearest month, these take about 2 years 11 months, 5 years 9 months and 11 years 6 months. Each row of the payday figure holds 26 pays, about a year.

Adding $10,000 for costs and a retained reserve gives targets of $40,000 or $130,000, requiring 100 or 325 contributions: about 3 years 10 months or 12 years 6 months. Replace the allowance with quoted costs, duty after concessions and your own reserve. Loan amounts exclude fees. These calculations don't establish loan eligibility.

## Common questions

### Can I buy with less than a 5% deposit?

Eligible single parents and legal guardians have a separate pathway with a minimum 2% deposit under the government scheme. Eligibility, property price caps and lender approval still apply, and buying costs need their own money.

### Does a 10% deposit avoid lenders mortgage insurance?

Usually not on its own. LMI may apply when the loan exceeds 80% of the lender's property valuation. A government guarantee or another lender exemption can change that, so ask for the actual loan terms and premium.

### Is the deposit paid when I sign the contract the whole deposit?

Not necessarily. The contract sets what you pay the seller and when, while your total contribution is reconciled at settlement. A grant or super release may arrive too late for the contract payment. Have your conveyancer and lender confirm the cash needed at each stage before signing.

### Can two buyers both use First Home Super Saver?

Yes, if each buyer is independently eligible. Each has their own contribution limits and release process. Count each person's released money once in the combined savings plan.

## Sources

1. [Save for a house deposit](https://moneysmart.gov.au/saving/save-for-a-house-deposit) · ASIC Moneysmart
2. [Buying a house](https://moneysmart.gov.au/home-loans/buying-a-house) · ASIC Moneysmart
3. [Australian Government 5% Deposit Scheme](https://firsthomebuyers.gov.au/australian-government-5-percent-deposit-scheme) · Australian Government
4. [Property price caps](https://firsthomebuyers.gov.au/australian-government-5-percent-deposit-scheme/property-price-caps) · Australian Government
5. [First Home Super Saver Scheme fact sheet](https://firsthomebuyers.gov.au/sites/default/files/2025-09/Housing%20AU%20FHSS%20Fact%20Sheet%206%20pages%20%2825%20of%2025%29%20-%20Sep%202025.pdf) · Australian Government
6. [Support for first home buyers](https://www.vic.gov.au/support-first-home-buyers) · Victorian Government
7. [First Home Owner (New Homes) Grant](https://www.revenue.nsw.gov.au/grants-schemes/first-home-owner-new-homes-grant) · Revenue NSW
8. [First Home Buyers Assistance Scheme](https://www.revenue.nsw.gov.au/grants-schemes/assistance-scheme?cid=011101) · Revenue NSW
9. [First home owner grant](https://www.qld.gov.au/housing/buying-owning-home/home-buyers-financial-help/first-home-owner-grant) · Queensland Government
10. [Transfer duty concessions and exemptions](https://www.qld.gov.au/housing/buying-owning-home/home-buyers-financial-help/transfer-duty) · Queensland Government
11. [National Debt Helpline](https://ndh.org.au/) · Financial Counselling Australia

## Related reading

- [How to turn a savings goal into a payday plan](https://getclova.com/blog/savings-goals)
- [Emergency funds: how much you need and how to start one](https://getclova.com/blog/emergency-fund)
- [How compound interest works (and how often it compounds)](https://getclova.com/blog/how-compound-interest-works)

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