First home buyers: how to save a 5 per cent deposit in six months for a $600k home
From 1 January 2026, the program will relaunch with expanded eligibility, opening the door to many more would-be homeowners, including scrapping income caps and opening the FHGS to permanent residents and joint applicants who haven't owned property for some time.
How is the First Home Guarantee Scheme changing?
The revamped FHGS will continue to allow eligible buyers to purchase a property with just a 5 per cent deposit, while the government steps in to guarantee the remaining amount, removing the need for costly Lenders Mortgage Insurance (LMI).
This means if you plan to buy a $600,000 home, you'd only need to front a $30,000 deposit.
But beyond the low deposit, there's some pretty significant shake ups.
The government is scrapping the income cap: buyers are no longer restricted by income thresholds.
Previously, this was capped at $125,000 for a single and $200,000 for joint applicants.
Come January, there will also no longer be a property price cap. Purchase price limits will be removed, subject to lender assessment.
And finally, there is now extended eligibility: individuals who have not owned property in the past 10 years, including permanent residents, can apply.
A great opportunity, with a caveat
Personal finance expert at Finder, Sarah Megginson, says the scheme is a game-changer, but buyers need to act now to get their finances in order.
"This plan will give all first-home buyers access to 5 per cent deposits when buying a home, making the prospect of home ownership far more realistic for some who want to enter the market," she said.
For example, if a property costs $850,000, a buyer needs to save a deposit of $42,500.
"Without this plan, they would also need to fork over a huge sum for Lender's Mortgage Insurance, which could be upwards of $20,000."
But Ms Megginson also warns that property competition will heat up even more.
"All first-time buyers will have access to this, so it enables a large number of people to buy a home, but does nothing to address supply," she said.
"A policy like this creates a lot of demand - which could see property prices in the affordable range increase, as first-time buyers battle each other to get into the market."
Your six-month saving window: Strategies to save $30K
If you want to hit the ground running when the scheme relaunches in January 2026, the next six months is your window of opportunity.
If you're on the average Australian salary of $100,000, your purchasing power sits around the $600,000-mark, meaning you'll require $30,000 for a 5 per cent deposit.
Ms Megginson says the key to building a $30,000 deposit quickly is breaking it down into smaller, manageable milestones.
"Saving $30,000 sounds like a massive mountain to climb, but smaller financial goals are easier to achieve and as you tick each one off, it gives you the momentum to keep going."
You're aiming for $5,000 per month, and to understand your personal financial picture, there's no way around creating a budget.
"Tracking where your spending is going is key to plugging those money leaks," says Ms Megginson.
"Take a look at your spending and split it into 'nice to have' and 'need to have'. Anything in the 'nice to have' category is a contender to cut back on."
Here are some more strategies to get serious about saving.
Move back home
While it won't be possible for everyone to take advantage of the privilege of moving home, if you have the ability to move back in with your parents or another family member and stop paying rent, you should absolutely take it.
Rents skyrocketed over the past few years, with Australia experiencing its longest stretch of continuous rental price growth in history, far outpacing wage growth.
No matter which way you slice it, rent takes up the biggest proportion of would-be homeowner salaries, keeping renters in a vicious cycle where they're unable to make headway on a house deposit despite demonstrating the financial ability to pay the equivalent of a mortgage.
Removing rent from the picture is undisputedly the way to turbocharge savings.
"It's short-term pain for long-term gain. It can help you save a fortune on rent and other bills to fast-track your savings goal," Ms Megginson said.
If you're in Sydney, for example, this one move could save you between $1700 and $3250 a month on rent alone, if your rent sits between $400 and $750 per week.
House sit or change rentals
If that's not an option, and you mostly work from home, consider house sitting as a rent-free alternative.
While it can be tricky to line up house sits perfectly, and the extra admin of applying for sits and then caretaking animals can be stressful, it's a creative way to stop paying rent (or even take a break while living with your parents).
The other option is to reduce your rental footprint by either sharing with more housemates, or changing rentals to a smaller property or more affordable area.
Trim your lifestyle spend
No one wants to go without their little luxuries, but remember, it's only for six months.
"Really, it's about looking at your overall lifestyle spending," said Ms Megginson.
"If you're serious about saving, you need to catch public transport instead of Uber, and stop getting food delivery altogether - it's seriously so expensive and so much cheaper to buy takeaways without the Uber premium. Eliminate any 'buy now pay later' accounts, too."
Subscriptions are the other place to look.
If you're signed up to three or four different streaming services, for example, it's time to cull it down to one.
You can even change that one platform every month or two, rotating through them all and catching up on shows.
But Ms Megginson is also quick to point out that this doesn't mean cutting out everything fun.
"Make sure you're not living off 2-minute noodles and stripping all the fun from your life! You don't have to sacrifice all the things that bring you joy.
"Just be mindful with your spending, so that when you invest in lifestyle extras - like takeaway coffee, a gym membership or Sunday brunch - you're spending on something you really enjoy, not just spending out of habit."
Evaluate and renegotiate your bills
Take stock of your household bills to ensure you're not overpaying for everyday services, from energy and health insurance to mobile phone plans.
"Finder has a Financial Fitness Challenge that runs through this process, where the average person without a home loan can save around $4,000 per year by comparing their household bills and getting a better deal," said Ms Megginson.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Telegraph
4 days ago
- Daily Telegraph
Housing crisis: Aussies fear they'll never own a home
A growing number of Australians believe they'll never own their own home, prompting calls for drastic government action to boost housing affordability. A Finder RBA cash rate survey of 34 experts and economists revealed a grim outlook, with more than one in three (35 per cent) Aussies convinced home ownership is out of reach. High prices, rising borrowing costs, and the struggle to save a deposit are to blame, according to Finder's head of consumer research, Graham Cooke. 'Record prices, steep borrowing costs, and saving for a deposit are locking people out,' Cooke said. 'In many suburbs, even a six-figure salary won't comfortably cover a mortgage.' Experts surveyed were asked what the most effective government action would be to make housing more affordable. The overwhelming consensus? Increase housing supply. 'Build, baby, build,' declared Kyle Rodda from Echoing this sentiment, Stephen Miller from GSFM simply stated, 'Supply! Supply! Supply! Through easing restrictions on building.' MORE NEWS Aus' shocking list of untouchable suburbs How my dogs helped me build wealth 'Put it down': Aussie expert's grim home warning Mala Raghavan from the University of Tasmania emphasised the need for government to 'play an enabling role' by streamlining planning and zoning regulations, investing in infrastructure, and offering incentives for affordable housing projects. While some experts suggested limiting immigration to reduce demand, the primary focus remained on addressing the chronic undersupply of housing. Noel Whittaker from QUT acknowledged the difficulty, noting the 'huge bottleneck' and bureaucratic hurdles hindering development. The survey also highlighted concerns about job security, with 12 per cent of Aussie workers feeling insecure in their current roles. Almost half (49 per cent) of Australians are living paycheque to paycheque. A majority of experts (80 per cent) expect unemployment to rise in the next 12 months. Stella Huangfu from the University of Sydney anticipates a gradual rise in unemployment, potentially reaching the mid-4 per cent range. Stephen Miller from GSFM suggested that the private sector is not strong enough to compensate for fading non-market sector employment. Despite these concerns, Noel Whittaker from QUT believes the unemployment rate will stabilise, citing a 'massive demand for labour' and numerous planned projects.
9 News
5 days ago
- 9 News
Why home ownership is out of reach for millions of Aussies
Your web browser is no longer supported. To improve your experience update it here More than one-third of Aussies believe they will never afford to buy a home, a new survey has revealed. House prices have boomed in the last two decades, with the gap between income and the price of property rising to an all-time high. New research from data comparison firm Finder showed 35 per cent of Australians - up to 9.5 million people - now say they will never own property. Millions of Aussies are being pushed out of the housing market. (Joe Armao/The Age) Finder's Graham Cooke said many are feeling like they are being shut out of the market, even if they have good jobs. "Record prices, steep borrowing costs, and saving for a deposit are locking people out," he said. "In many suburbs, even a six-figure salary won't comfortably cover a mortgage." The survey also found almost half of all Australians are living paycheque to paycheque, and 12 per cent feel insecure in their current job. The housing crisis is a conundrum experts around the country are trying to solve, and one theme has become clear, according to the survey of housing experts. Experts in Australia agree that housing supply must be increased restrictions must be eased. (Getty Images/iStockphoto) "We need to increase the housing stock. That means the government should play an enabling role by introducing and coordinating policies that remove barriers to housing development," Mala Raghavan from the University of Tasmania said. Addressing immigration is also a potential solution, according to another expert. "The only options are to reduce demand or increase supply," Noel Whittaker from the Queensland University of Technology said. "The way to reduce demand is to limit immigration and reduce all these government schemes that are allegedly making homes more affordable. "As far as supply goes, I'm pessimistic; there's a huge bottleneck, and the bureaucratic processes of government at all levels make it nearly impossible." national Australia finance money housing CONTACT US
Sky News AU
04-08-2025
- Sky News AU
Cost of living pressures forcing one in four Aussies to put off essential car check-ups, new Finder research reveals
Stringent cost of living pressures are taking their toll as drivers put off critical vehicle maintenance in a threat to those on the road. This is the revelation from a fresh survey by comparison site Finder where almost one in four respondents - equivalent to about 4.8 million drivers - said they have avoided taking their car in for a check-up. It comes as budgetary constraints have forced vehicle maintenance down many Aussies' list of fiscal priorities. The report also showed about 30 per cent of female respondents had put off a check-up compared to about 18 per cent of men. Finder's insurance expert Taylor Blackburn said these cost of living pressures could ultimately make roads unsafe as the conditions of many vehicles worsen. 'Given the soaring cost of living, many households are finding it harder to prioritise car maintenance,' Mr Blackburn said. 'We're seeing a growing number of vehicles fall into disrepair simply because drivers can't afford to keep them in good condition. 'The danger is real – worn-out cars can quickly become unsafe, putting not just drivers, but everyone on the road at serious risk.' Car maintenance costs are amongst the largest household expenses after housing costs, Mr Blackburn said. It comes as rising insurance and fuel have also added to car maintenance costs, alongside the price of a routine check-up. 'Ignoring minor car troubles, like a cracked hose or a dirty filter, might seem like a way to save money now, but these cheap fixes can quickly escalate into expensive repairs if left unaddressed,' he said. Finder's analysis showed the average car owner pays about $1362 per year for car insurance. The comparison site said Aussies could reduce expenses by cutting back on driving, staying on top of maintenance, seeking out cheaper fuel, reassessing insurance and driving more fuel efficiently. The recent survey from Finder comes as the comparison site revealed millions of Aussies do not believe they have will have enough superannuation to comfortably retire. It showed that 20 per cent of Aussies - equivalent to 4.3 million Aussies - do not believe they will have enough in their super to "get by" in retirement. Another 10 per cent said their super balance would be too low but would have enough in other investments by the time they retire.
