How Can I Save Money When Buying a House in Victoria?

Buying a home in Victoria is one of life’s biggest milestones – but it can also be one of the most expensive. Between deposits, stamp duty, inspections, and ongoing fees, costs can quickly spiral out of control. The key to stretching your budget isn’t just earning more; it’s knowing where to save smartly. This 2025 guide explains how to reduce unnecessary expenses so you can grow your deposit, increase your borrowing power, and ultimately buy a better property with higher long-term growth potential.

The Power of a Bigger Deposit

The first and most important way to save money is by increasing your deposit. A larger deposit reduces the amount you need to borrow, cuts your monthly repayments, and can help you avoid paying Lenders Mortgage Insurance (LMI). Most banks require LMI if your deposit is under 20% of the property’s value – and that insurance isn’t cheap. In 2025 the average LMI premium for first-home buyers is around $25,000, with some paying over $40,000 on more expensive homes. By contrast, reaching the 20% deposit threshold can eliminate this cost entirely. Even if you can’t get to 20% right away, every extra dollar saved moves you closer to a lower LVR and smaller LMI bill.

Building a bigger deposit also gives you more buying power in Victoria’s competitive market. An extra $50,000 in savings, for example, might be the difference between affording a two-bedroom unit in an outer suburb versus a similar property in a higher-growth area closer to Melbourne. It can take years to save a deposit – recent data shows a median-income household needs over eight years to accumulate a 20% deposit for a typical home. However, the effort pays off in better loan terms and a wider choice of locations. A larger down payment often means you can qualify for lower interest rates and borrow more comfortably, since lenders see you as a lower-risk borrower.

If saving the full 20% seems out of reach, take advantage of government programs. The First Home Owner Grant (FHOG) in Victoria can give you $10,000 toward a new home (under $750,000), which boosts your deposit. There are also federal schemes like the First Home Guarantee that allow eligible buyers to purchase with just 5% down while avoiding LMI. (From late 2025, this scheme was expanded to remove previous income caps and limits, making it more accessible.)

Using these incentives can significantly reduce how much you need to save on your own.

When Spending Smart Actually Saves You More

Not all savings come from cutting corners – sometimes paying for the right help can save you money (and stress) in the long run. The key is to spend strategically on things that either protect you from major risks or drastically improve efficiency. A classic example is investing in a thorough building and pest inspection. Skipping inspections to save a few hundred dollars might seem frugal, but it’s incredibly risky. If the property has an unseen termite problem or structural defect, it could cost you tens of thousands after purchase. By paying an inspector, you’re effectively buying peace of mind and potentially a strong bargaining tool (or an alert to walk away from a money pit). In the scheme of a six- or seven-figure property transaction, a $600 inspection is money well spent if it prevents a bad deal or expensive repairs.

Another area where spending can save is moving and packing. Many people assume doing all the packing themselves will be cheaper when moving house. However, by the time you buy boxes, tape, bubble wrap, and take days off work to sort and pack everything, DIY moving isn’t always a bargain. Melbourne professional house packers can often do the job in a single day what might take you a week of evenings and weekends. They come with experience to pack efficiently and securely (reducing the chance of damage to your belongings), and they bring the right materials. Yes, you’ll pay for the service, but it can be surprisingly affordable – usually around $70–$80 per hour per packer – and they often supply or rent boxes at bulk rates. The cost might end up comparable to what you’d spend on materials and a pizza for every friend who helped you move, and it will definitely save you time and backache. More importantly, you’ll be free to focus on other aspects of your move or your job, which can have its own monetary value.

Similar logic applies to hiring professionals for specialised tasks. If your contract has tricky clauses, paying a solicitor for an extra review could save you from legal disputes later. If you’re unsure about a property’s value, a few hundred dollars for an independent valuation or engaging a reputable buyer’s agent could prevent you from overpaying by thousands. Think about the tasks that are not your forte or could carry big consequences – those are worth budgeting for expert help. In contrast, feel free to save money on things like painting a room yourself or assembling flat-pack furniture; the worst outcome there is a less-than-perfect paint job, not a financial disaster.

The takeaway is that being “cheap” in the wrong places can cost more.

Use professionals when the stakes are high or when they can do something far more efficiently than you. It’s an investment in a smooth home-buying journey. You’ll reduce the risk of costly surprises and ease a lot of the stress – and avoiding stress has value too!

Using Technology and AI to Your Advantage

In 2025, one of the easiest ways to save money (and time) when buying a house is to make technology work for you. We live in an age of apps and automation – take advantage of it. Start with the basics: set up property alerts on real estate websites so you never miss a new listing in your price range. Use mortgage comparison sites to quickly find which lenders are offering the lowest rates or special deals. There are budgeting and expense-tracking apps that can link to your bank accounts and automatically categorise your spending, helping you identify areas to cut back and save more for your deposit. Your bank’s app might even have features for round-up savings (where every card purchase rounds up to the next dollar and puts the spare cents into your savings). These digital tools help ensure you’re being efficient with both your house hunt and your money.

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Beyond the basics, AI is becoming a game-changer in the property world. Some forward-thinking buyers are using artificial intelligence in creative ways to get an edge. For instance, one first-home buyer in Sydney recently used an AI tool (ChatGPT) to analyse strata reports of apartments he was considering. He trained the AI on what issues to look out for – things like costly maintenance problems or defects hidden in the fine print. The AI was able to quickly scan lengthy documents and flag the critical points, which helped him identify a solid apartment (and avoid some lemons) much faster than if he had read everything himself. This kind of approach can be applied in Victoria too.

If you want to take it a step further, you could even consider working with an AI automation agency in Melbourne or a tech-savvy financial advisor. These professionals can set up custom automations for you – for example, a system that scrapes listings for properties that meet very specific criteria and emails you immediately, or a personalized mortgage rate tracker that alerts you when a better deal arises. They might also help streamline your personal finances using AI, such as creating automated budget spreadsheets or integrating tools that pay your bills on the optimal day for cash flow. While this level of service is relatively new, it’s an option if you have complex needs or simply value the efficiency. The cost of a consultation might pay for itself by saving you countless hours or by uncovering a money-saving opportunity you would have missed.

Finally, don’t overlook the simple tech solutions. Use a mortgage repayment calculator to model out different scenarios – what if rates rise by 1%, or if you make an extra $200 repayment per month? Seeing those projections can guide your financial planning and prevent costly mistakes (like taking on a loan that will become unaffordable if rates increase). Many calculators are free on bank or government websites. In short, let digital tools do the heavy lifting where possible. Automate the monotonous parts of saving and searching, so you can dedicate your energy to decision-making and negotiation, which is where you personally have the most impact.

Saving Beyond the Purchase

Your money-saving efforts shouldn’t stop once you’ve bought the house. In fact, the post-purchase period is crucial for setting yourself up for long-term financial success as a homeowner. One smart strategy is to refinance your mortgage after a couple of years if there’s a better deal available. As a first-home buyer, you might start with a slightly higher interest rate or a basic loan. After 24–36 months of consistent repayments, you’ll have built up some equity (especially if property values rise) and hopefully improved your credit score. That’s a great time to shop around for a lower interest rate or more favorable loan features. Even a reduction of 0.5% on your interest rate can save you hundreds of dollars a month in repayments. Australians have been refinancing in record numbers in recent years, because lenders often give better rates to new customers than existing ones – so take advantage of that by becoming a “new customer” somewhere else if your current bank won’t budge on rates. Just be mindful of any break fees if you have a fixed-rate loan, and factor in refinancing costs (valuation, settlement fees) to ensure it’s worth it. In many cases, the savings far outweigh the fees.

Another powerful tool is an offset account (or redraw facility) linked to your home loan. This is basically a transaction account where any balance offsets your loan principal for interest calculations. For example, if you have a $400,000 loan and $10,000 in an offset, you only pay interest on $390,000. Over time, that can shave a lot off your interest payments and even shorten your loan term. To maximize this, consider directing all your income into the offset account and then paying expenses from it as needed – every day that your money sits in offset is a day you pay a little less interest. Some people even synchronize their bill payments with their salary cycle to keep money in the offset for longer. It’s a way of making your savings work extra hard for you. If you received monetary gifts or have any windfalls after buying, parking them in the offset (even if temporarily) is essentially a risk-free return equal to your mortgage rate.

Continuing a savings habit after purchase is also important. It can be tempting to ease off once you’re no longer saving for the deposit, but maintaining a similar level of budgeting discipline will help you handle the ongoing costs of homeownership comfortably.

Aim to set aside at least 1% of your property’s value each year for maintenance and repairs. Some years you spend nowhere near that, but other years you might, and any leftover can roll over to the next year.

Finally, always keep an eye out for ways to reduce your ongoing bills. As a homeowner, you’ll be paying for insurance, council rates, utilities, possibly strata fees – these can all creep up over time. Don’t just accept the annual increases. Shop around for home insurance at each renewal; loyalty often doesn’t pay, and switching can save you a few hundred dollars. For utilities, compare providers periodically or call and ask for a better deal. Many Victorians save on electricity or gas by taking advantage of competitive offers or government comparison services. And if interest rates drop in the broader market, go back to your lender (or another) and negotiate – even before the typical two-year refinance mark. Essentially, treat your household like a business: revisit expenses regularly and trim the fat where you can. Small savings of $20 here and $50 there might not seem much monthly, but over years they compound into serious money that can go towards your next goal (whether that’s renovations, an investment property, or paying off your mortgage early).

Final Thoughts: Be Strategic, Not Stingy

Saving money when buying a house in Victoria isn’t about cutting every cost to the bone – it’s about being strategic with your finances. You want to avoid overspending on things that don’t add value, while still investing in the areas that do. Before signing anything or making a payment, ask yourself: “Is this expense going to help me secure a better home or a better financial position?” If not, see if you can minimize or eliminate it. That might mean saying no to the beautifully staged house that’s $100k over your max budget, or negotiating a fee waiver with your bank. On the flip side, being strategic also means knowing when spending a bit more is the smarter choice – like hiring experts for due diligence or using a premium service that ultimately saves you time and stress (which, after all, have monetary value too).

Remember that the goal is long-term affordability and wealth, not just making it to settlement. It’s easy to get caught up in the excitement and emotion of buying a home, but keep your eyes on the bigger picture. The Victorian property market in 2025 remains competitive, with high prices and eager buyers, so those who prepare and stick to a savvy plan will come out on top. By doing your homework on costs, taking advantage of grants and tech tools, and resisting the pressure to overspend, you’ll be far better positioned not only to purchase a home, but to actually enjoy it without financial anxiety.

In summary, be frugal but not foolish. Cut unnecessary expenses ruthlessly, but don’t skimp on things that ensure the quality of your investment (like inspections or good legal advice). Leverage every support available – from government incentives to modern apps – to make the process easier and cheaper. If you approach buying a house like a well-run project, you can absolutely save money at each step and still end up with the keys to a home you love. The money you save now, whether it’s $5 or $50,000, is money you can put towards building your future. Happy house hunting, and happy saving!