There is a lot of media coverage about the issues with saving for a house deposit in the current market. It can seem like giving up smashed avocado toast is not enough to make a difference on your housing budget, but small differences can pack a big punch. Here are some ideas to help you get into your new home earlier.
Give up the avocado toast (and extra coffees)
If you can take an extra $50 out of your weekly budget by cutting avocado toast and a few coffees, not only will it be a little easier to save for your house deposit, but you will also be able to afford a higher mortgage payment. At the existing mortgage interest rates of around 5%, an extra $50 per week can help you to pay an extra $30,000 for a 20-year mortgage, which can help you to stretch your budget and get a mortgage more quickly.
Move further out
While it's nice to live close to the inner city and cool features, it can be expensive to live in an area that is already 'cool'. It's worth looking into some less-cool areas—in fact, many of the areas that are currently cool started out their life as cheaper industrial areas that attracted young artists and funky younger people. It can be fun to move into less popular areas, as you can help to create a cool scene in your neigbourhood, and you often get to meet people from a wide range of backgrounds in less-traditional property areas.
Ask for help
If your parents or grandparents do offer to help you out with buying a property, it can be a good idea to take them up on the offer. You can either take money as a personal loan or you can buy the property with them, allowing them to take a stake in the property so that they can also share in any property value growth when you sell. This can be a great option for parents who were contemplating buying an investment property, as it offers them a similar investment at a smaller entry price, while helping out their own family.
It can feel hard to save for a home deposit, but if you are prepared to be a little creative and make a few sacrifices, it is still very achievable to buy a first home. Speak to your real estate agent to explore your options.
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