Key takeaways
It now takes an Australian couple aged 25 to 34 around five years to save a 20% deposit for an entry-priced house.
Sydney remains the most difficult capital for house buyers, while Brisbane has become the hardest city in which to save for an entry-priced unit.
A 20% deposit may help you avoid Lenders Mortgage Insurance, but waiting until you reach 20% can carry its own cost if property prices rise faster than your savings.
Eligible first-home buyers may be able to purchase with a 5% deposit without paying Lenders Mortgage Insurance.
Your deposit is only part of the equation. Borrowing capacity, loan repayments, stamp duty and purchasing costs must also be considered.
Saving a house deposit has become one of the biggest financial hurdles facing Australian home buyers.
Even disciplined savers are finding that the target keeps moving as property prices rise, rents absorb more household income and living costs make it harder to put money aside.
However, buying a home may be closer than you think once you understand how much you really need, what assistance is available and how lenders will assess your financial position.
The traditional advice has been to save a 20% deposit, but today’s buyers have several other pathways into the market.
The right choice will depend on your income, borrowing capacity, location and the type of property you intend to buy.
How long does it take for first-home buyers to save for a deposit in Australia?
According to Domain’s First Home Buyer Report 2026, it now takes a couple aged between 25 and 34 approximately five years to save a 20% deposit for an entry-priced Australian house.
An entry-priced property is one sitting in the lowest 25% of sales, rather than a median-priced home.
The same couple would need around three years and six months to save a 20% deposit for an entry-priced unit.
These estimates assume the couple saves 20% of their combined post-tax income in a savings account, although the actual time will vary considerably according to income, expenses and investment returns.
| Location | Entry-priced house | Entry-priced unit |
| Sydney | 7 years 7 months | 4 years 5 months |
| Melbourne | 5 years 3 months | 3 years 4 months |
| Brisbane | 6 years 3 months | 4 years 11 months |
| Adelaide | 5 years 7 months | 4 years |
| Perth | 5 years 4 months | 3 years 10 months |
| Hobart | 5 years | 3 years 10 months |
| Darwin | 4 years | 2 years 7 months |
| Canberra | 5 years 1 month | 2 years 10 months |
| Combined capitals | 5 years 2 months | 3 years 6 months |
| Combined regional areas | 4 years 5 months | 3 years 5 months |
| Australia | 5 years | 3 years 6 months |
Source: Domain First Home Buyer Report 2026
These figures show how dramatically affordability has changed.
National entry-level house prices increased by around 68% over the five years covered by Domain’s report, while wages rose by approximately 21%.
Sydney remains the most difficult market for entry-level houses, where a couple would need seven years and seven months to save a 20% deposit.
Brisbane has experienced an even more striking change. It now takes six years and three months to save for an entry-priced house and four years and eleven months to save for an entry-priced unit.
In fact, Brisbane has overtaken Sydney as the capital city with the longest saving time for an entry-priced unit.
Melbourne provides an interesting contrast. Although affordability remains challenging, slower price growth has left its entry-level units relatively affordable compared with Sydney, Brisbane, Adelaide and Perth.
How much deposit do you really need?
A 20% deposit remains a useful benchmark because it generally allows borrowers to avoid Lenders Mortgage Insurance, commonly known as LMI.
For a $700,000 property, a 20% deposit would be $140,000. On an $850,000 property, it would be $170,000, while a $1 million home would require $200,000.
However, many lenders will accept a smaller deposit.
Some buyers may be able to borrow with a 10% deposit, while eligible first-home buyers using the Australian Government 5% Deposit Scheme may be able to purchase with a deposit as low as 5% without paying LMI.
This raises an important issue that buyers sometimes overlook.
Waiting until you have saved 20% may reduce your loan and avoid LMI, but the property you want could increase in value while you are saving.
Sure, housing markets are flat at the moment; however, in a rising market, the deposit target may move faster than your savings balance.
That doesn't mean every buyer should rush into the market with a small deposit. A lower deposit means a larger loan, higher repayments and less equity protecting you if property values fall.
The sensible approach is to compare the cost and risks of buying sooner against the likely cost of continuing to save.
Remember the other purchasing costs
Your deposit is only one part of the money you will need.
Depending on the property and where you live, additional costs may include:
- Stamp duty or transfer duty
- Conveyancing or legal fees
- Building and pest inspections
- Loan establishment and valuation fees
- Mortgage registration and title transfer charges
- Buyers’ agent fees, where applicable
- Moving expenses and immediate repairs
- An emergency cash buffer after settlement
First-home buyer stamp duty concessions vary between states and territories, and the rules and price thresholds change regularly.
Before setting your deposit target, use the government calculator for the state or territory in which you plan to buy. Otherwise, you may reach your deposit goal only to discover that the purchasing costs have reduced the amount available for the property.
I would also encourage buyers to retain a cash buffer after settlement.
Putting every available dollar into the purchase may help you buy slightly sooner, but it leaves you vulnerable to an unexpected repair, a period without income or a sudden rise in household expenses.
How to build your house deposit
Begin with a realistic property target
A useful savings plan starts with a reasonably clear idea of what you intend to buy.
Research the price of suitable properties in the locations you are considering and calculate deposits of 5%, 10% and 20%. Then add the estimated purchasing costs and the cash buffer you want to keep after settlement.
Review this target every few months because property prices and government thresholds can change.
Have your borrowing capacity assessed early
There is little value in saving a $150,000 deposit for a property if your income won't support the required loan.
A mortgage broker can estimate your borrowing capacity and explain how lenders will treat your income, expenses, credit cards, personal loans, HECS or HELP debt and employment history.
This assessment may also reveal that improving your borrowing capacity is more important than adding a few thousand dollars to your deposit.
- Also read:How much do buyer’s agents charge in Australia
- Also read:What laws do real estate agents have to abide by?
- Also read:The offer and acceptance process when buying a property
- Also read:Caveats: The hidden red flags smart property investors never ignore
- Also read:What property sellers have to disclose
Track where your money is going
Most people have a rough idea of their major expenses, although smaller recurring costs are easily overlooked.
Review at least three months of bank and credit card statements and divide your spending into essentials and discretionary expenses.
This exercise also helps prepare you for a loan application because lenders will examine your living expenses and account conduct.
Deal with expensive debt
High-interest credit card debt, personal loans and buy now, pay later commitments can slow your savings and reduce your borrowing power.
Paying down these debts may produce a better financial result than putting every spare dollar into a deposit account.
Be careful about closing credit facilities immediately before applying for a loan without seeking advice, as each lender assesses liabilities and credit history differently.
Automate your savings
Treat your deposit contribution as a regular financial commitment rather than whatever is left at the end of the month.
Arrange an automatic transfer into a separate savings account shortly after you are paid. Keeping the money away from your everyday account reduces the temptation to spend it.
A high-interest savings account can help, but check the conditions carefully. Some banks require monthly deposits, limited withdrawals or transaction account use before paying their bonus rate.
Concentrate on the large expenses
Skipping the occasional coffee will make a small difference, but housing, transport and debt repayments usually offer much greater savings.
Moving to a less expensive rental, sharing accommodation, living temporarily with family or reducing the cost of running a second car could accelerate your progress considerably.
The objective is to make changes you can maintain without turning the saving process into years of misery.
Direct unexpected income towards the deposit
Tax refunds, work bonuses, commissions and income from selling unused possessions can all shorten your saving period.
You may also be able to increase your income through overtime, freelance work or a carefully chosen side business.
Remember that lenders often require a history of casual, bonus or self-employed income before including it fully in their serviceability assessment.
Government assistance for first-home buyers
Government programs can reduce the time needed to save, although eligibility rules and property price caps apply.
Under the Australian Government 5% Deposit Scheme, eligible first-home buyers can purchase with a deposit as low as 5%, with the government guaranteeing part of the loan so the buyer does not need to pay LMI.
The scheme doesn't provide the deposit or reduce the amount borrowed, so buyers must still satisfy their lender’s credit and serviceability requirements.
The Australian Government Help to Buy Scheme offers another pathway for eligible buyers.
From 1 July 2026, buyers can contribute a minimum 2% deposit, with the government contributing up to 30% of the price of an existing home or 40% of a new home in return for an equivalent equity share.
For the 2026-27 financial year, the taxable income limit is $103,000 for an individual applicant and $165,000 for joint applicants and single parents. Property price caps also apply and vary by location.
Shared equity can significantly reduce the size of the mortgage, but the government participates proportionally in future gains or losses. Buyers should understand the longer-term implications before proceeding.
The First Home Super Saver Scheme may also help eligible buyers save more tax-effectively through voluntary superannuation contributions.
Up to $15,000 of eligible voluntary contributions from any one financial year can count towards the scheme, with a maximum of $50,000 across all years. Couples may each use the scheme if they satisfy the eligibility requirements.
State and territory governments also offer various first homeowner grants and stamp duty concessions, so check the rules applying where you intend to buy.
Should you buy a unit or look farther out?
Domain’s figures show that buying an entry-priced unit rather than a house can reduce the saving period by around 18 months.
However, buyers should be careful about choosing a property simply because it is cheaper.
Some inexpensive apartments have limited owner-occupier appeal, high strata costs, building defects or a large supply of similar properties nearby. These characteristics can affect future capital growth and resale demand.
Likewise, moving farther from the city may reduce the purchase price while adding considerable commuting time and transport costs.
A well-located established apartment, townhouse or villa in a desirable neighbourhood may be a better long-term choice than a new property on the distant fringe, even if both are priced similarly.
The best way to save for a house deposit
There is no universal deposit strategy because every buyer begins from a different position.
For some, building a 20% deposit and keeping a strong cash buffer will be the safest approach. Others may reasonably decide that purchasing earlier with a smaller deposit is preferable, particularly if they have secure income and can comfortably manage the larger loan.
The quality of the property also matters. Government assistance may help you buy sooner, but it cannot turn a poorly located or unsuitable property into a good purchase.
Before committing, have your borrowing capacity assessed, understand the full costs and make sure the property suits your long-term needs.
Saving the deposit requires discipline, but buying the wrong property can be far more expensive than waiting a little longer and getting the decision right.
Even though you are buying a home, before going down the route of one of the many available government schemes on offer, make sure you speak to an expert such as the team members at Metropole to ensure your potential property purchase makes good investment sense.
