Property prices soar: how long will it take to save a deposit in your capital city?

Property prices soar: how long will it take to save a deposit in your capital city?

Property prices across Australia have shown significant signs of recovery from the impacts of Covid-19. So how much does a first home buyer need to save on average to afford a deposit in their city?

The latest CoreLogic figures showed that national property prices in February grew at the fastest record in 17 years (2.1 per cent).

Head of Research at CoreLogic, Tim Lawless, said: “The last time we saw a sustained period where every capital city and rest of state region was rising in value was mid-2009 through to early 2010, as post-GFC stimulus fuelled buyer demand.”

Further, the latest research from Commonwealth Bank’s Household Spending Intentions (HSI) series shows that home buying intentions have continued to grow in February, recording its highest level since the start of the HSI in 2015.

And for the week ending 14 March, Corelogic’s auction data recorded an average auction clearance rate of 80 per cent across the country, with 2,218 homes taken to auction. Sydney recorded its sixth consecutive week with clearance rates above 80 per cent, with 84.3 per cent clearance achieved.

These figures help highlight the strong appetite Aussie would-be buyers have for property at the moment.

But with savings account rates at record lows, first home buyers may feel further locked out of the market. However, not all hope is lost if we take a look at exactly how long it may take to save up a deposit in each capital city.

As long as first home buyers are able to scrimp and save, it actually may be closer than they think.

How long it takes to save a deposit in each capital city in Australia

RateCity research has crunched the numbers on how long it may take to save a deposit in your capital city, based off of current CoreLogic median dwelling prices.

Time taken to save for a deposit in each capital city

Location Median Dwelling Price Deposit 10% Stamp duty LMI Total deposit needed Saving $200 a week Saving $400 a week






13 years 6 months 28 days 6 years 10 months 12 days






10 years 4 months 11 days 5 years 2 months 23 days






6 years 7 months 25 days 3 years 4 months 5 days






7 years 2 months 25 days 3 years 7 months 21 days






6 years 7 months 3 days 3 years 3 months 24 days






7 years 9 months 24 days 3 years 11 months 7 days






6 years 8 months 10 days 3 years 3 months 29 days






8 years 1 months 24 days 3 years 3 months 29 days

Source:,, Genworth LMI Premium Estimator, Revenue NSW Calculator, SRO VIC Land Transfer Duty, QLD Govt Transfer Duty Estimator, Revenue SA Calculator, OSR WA Transfer Duty Calculator, SRO TAS Property Transfer Duty Calculator, NT Govt Conveyance Calculator, Revenue ACT Calculator.

Notes: Median dwelling price based on CoreLogic figures for February 2021. Stamp Duty and LMI figures based on first home buyer owner occupier. Savings account rate based on current average on RateCity database of 0.35 per cent, hypothetical calculation in which rates will not change over time. Data accurate as of 18.03.2021.

While a 20 per cent deposit may be considered more ideal by lenders, it can be a challenging amount to save for any first home buyer. These figures are based on how long it may take to save for a 10 per cent deposit based in each capital city and includes stamp duty and lender’s mortgage insurance as upfront costs.

As it stands, if you were only able to save $200 a week towards a deposit, it would take you over ten years to save in Sydney and Melbourne. However, if you were able to boost those savings to $400 a week, you may be able to save a deposit in only 5 – 6 years.

However, if you’re saving $400 a week in all other capitals, building up a 10 per cent deposit may only take as little as 3 – 4 years.

If you’re a first home buyer feeling as if getting a foot on the property ladder is out of your reach, there’s a few key things to keep in mind about these results:

  1. You don’t have to aim for a median-priced dwelling. Consider saving up for something more affordable in your city to begin with, or even look to regional areas for your first property.
  2. Put any windfalls into your savings when you get them, whether from a generous tax return or a gift from a family member. Don’t underestimate compound interest. Adding to your savings as frequently as possible may help you achieve your goals faster.
  3. Take advantage of government assistance, including First Home Owner Grants and even the First Home Loan Deposit Scheme, if this is applicable to your financial situation.
  4. Lender’s mortgage insurance doesn’t have to be an ‘upfront’ cost. Unlike stamp duty, you don’t always necessarily have to pay costly lender’s mortgage insurance (LMI) upfront when you sign for your new home. Many homeowners add the cost of LMI on to their mortgages. But keep in mind that this will increase the value of your loan and in turn see you paying more in interest over time. Consider speaking to a broker for more information.

First home buyer home loans

While the appetite for property may be growing as quickly as housing prices, home loan interest rates are moving in the opposite direction. First home buyers looking for mortgage approval are entering the market in one of the lowest rate periods in history.

This is why it may be invaluable to shop around before just applying for a mortgage with the bank you’ve been with since childhood, lest you be stung with a ‘loyalty tax’.

Here are some competitive home loan options on the RateCity database for first home buyers:

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Fact Checked -

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.



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Learn more about home loans

Why does Westpac charge an early termination fee for home loans?

The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee. 

The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.

Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

How much deposit do I need for a home loan from NAB?

The right deposit size to get a home loan with an Australian lender will depend on the lender’s eligibility criteria and the value of your property.

Generally, lenders look favourably on applicants who save up a 20 per cent deposit for their property This also means applicants do not have to pay Lenders Mortgage Insurance (LMI). However, you may still be able to obtain a mortgage with a 10 - 15 per cent deposit.  

Keep in mind that NAB is one of the participating lenders for the First Home Loan Deposit Scheme, which allows eligible borrowers to buy a property with as low as a 5 per cent deposit without paying the LMI. The Federal Government guarantees up to 15 per cent of the deposit to help first-timers to become homeowners.

How much deposit do I need for a home loan from ANZ?

Like other mortgage lenders, ANZ often prefers a home loan deposit of 20 per cent or more of the property value when you’re applying for a home loan. It may be possible to get a home loan with a smaller deposit of 10 per cent or even 5 per cent, but there are a few reasons to consider saving a larger deposit if possible:

  • A larger deposit tells a lender that you’re a great saver, which could help increase the chances of your home loan application getting approved.
  • The more money you pay as a deposit, the less you’ll have to borrow in your home loan. This could mean paying off your loan sooner, and being charged less total interest.
  • If your deposit is less than 20 per cent of the property value, you might incur additional costs, such as Lenders Mortgage Insurance (LMI).

What are the pros and cons of no-deposit home loans?

It’s no longer possible to get a no-deposit home loan in Australia. In some circumstances, you might be able to take out a mortgage with a 5 per cent deposit – but before you do so, it’s important to weigh up the pros and cons.

The big advantage of borrowing 95 per cent (also known as a 95 per cent home loan) is that you get to buy your property sooner. That may be particularly important if you plan to purchase in a rising market, where prices are increasing faster than you can accumulate savings.

But 95 per cent home loans also have disadvantages. First, the 95 per cent home loan market is relatively small, so you’ll have fewer options to choose from. Second, you’ll probably have to pay LMI (lender’s mortgage insurance). Third, you’ll probably be charged a higher interest rate. Fourth, the more you borrow, the more you’ll ultimately have to pay in interest. Fifth, if your property declines in value, your mortgage might end up being worth more than your home.

Can I get a NAB first home loan?

The First Home Loan Deposit Scheme of NAB helps first home buyers purchase a property sooner by reducing the upfront costs required. This scheme is offered based on a Government-backed initiative, with10,000 available places announced in October 2020.

Suppose your application for the NAB first home buyer loan is successful. In that case, you’ll only need to pay a low deposit, between 5 and 20 per cent of the property value and won’t be asked to pay lender's mortgage insurance (LMI). You’ll also receive a limited guarantee from the Australian government to purchase the property.

If you’re applying for the NAB first home buyer home loan as an individual, you need to have earned less than $125,000 in the last financial year. Couples applying for the NAB first home loan need to have earned less than $200,000 to be eligible. To be considered a couple, you need to be married or in a de facto relationship. A parent and child, siblings or friends are not considered a couple when applying for a NAB first home loan.

The NAB First Home Loan Deposit Scheme is currently offered only to purchase a brand new property, rather than an established property.

Where can I get all the information about an ANZ first home buyer’s loan?

As a first home buyer, you may require help and hand-holding, and as such ANZ has the buying your first home section on its website full of important information. ANZ also has a form in this section you can fill out to get a free consultation from an ANZ First Home Coach and create your own plan for buying your first home. This coach will help you understand where your current income is being spent and plan for your home loan repayments. You’ll get a clear picture of the costs involved in purchasing a property and how to budget or save for these costs. The coach will help you understand different deposit options and manage your accounts to enhance your savings.

There are three types of ANZ first home loans - Standard Variable, Fixed, and Equity Manager. The features, interest rates, and terms for each are different, and you can compare them here.

When they apply for an ANZ home loan, first home buyers can also get guidance on applying for the First Home Owner Grant (FHOG). This is a one-off government grant that may be available to you when you’re buying your first home. The eligibility criteria for FHOG differs between the different states and territories, which is why it’s helpful to have expert advice when applying.

Does Australia have no-deposit home loans?

Australia no longer has no-deposit home loans – or 100 per cent home loans as they’re also known – because they’re regarded as too risky.

However, some lenders allow some borrowers to take out mortgages with a 5 per cent deposit.

Another option is to source a deposit from elsewhere – either by using a parental guarantee or by drawing out equity from another property.

What is a low-deposit home loan?

A low-deposit home loan is a mortgage where you need to borrow more than 80 per cent of the purchase price – in other words, your deposit is less than 20 per cent of the purchase price.

For example, if you want to buy a $500,000 property, you’ll need a low-deposit home loan if your deposit is less than $100,000 and therefore you need to borrow more than $400,000.

As a general rule, you’ll need to pay LMI (lender’s mortgage insurance) if you take out a low-deposit home loan. You can use this LMI calculator to estimate your LMI payment.

How do I save for a mortgage when renting?

Saving for a deposit to secure a mortgage when renting is challenging but it can be done with time and patience. If you’re on a single income it can be even more difficult but this shouldn’t discourage you from buying your own home.

To save for a deposit, plan out a monthly budget and put it in a prominent position so it acts as a daily reminder of your ultimate goal. In your budget, set aside an amount of money each week to go into a savings account so you can start building up the ‘0’s’ in your account.  There are a range of online savings accounts that offer reasonable interest, although some will only off you high rates for the first few months so be wary of this.

If you aren’t able to save a large deposit, you can consider ways of entering the market that require small or no deposits. This can include getting a parent to act as guarantor for your home loan or entering the market with an interest only loan.

How can I apply for a first home buyers loan with Commonwealth Bank?

Getting a home loan requires planning and research. If you are considering a home loan with the Commonwealth Bank, you can find the information you need in the buying your first home section of the bank’s website.

You can see the steps you should take before applying for the loan and use the calculators to work out how much you can borrow, what your monthly repayments would be and the upfront costs you’d likely pay.

You can also book a time with a Commonwealth first home loan specialist by calling 13 2221.

CommBank publishes a property report that may help you understand the real estate market. The bank has also created a CommBank Property App that you can use to search for property.  The link to download this app is available on the same webpage.

If you are eligible for the First Home Loan Deposit Scheme, CommBank will help you process your application. The scheme helps first home buyers to purchase a home with a low deposit. You can read details about this scheme here and speak with a CommBank home lending specialist to understand your options.

Can first home buyers apply for an ING home loan?

First home buyers can apply for an ING home loan, but first, they need to select the most suitable home loan product and calculate the initial deposit on their home loan. 

First-time buyers can also use ING’s online tool to estimate the amount they can borrow. ING offers home loan applicants a free property report to look up property value estimates. 

First home loan applicants struggling to understand the terms used may consider looking up ING’s first home buyer guide. Once the home buyer is ready to apply for the loan, they can complete an online application or call ING at 1800 100 258 during regular business hours.

How can I avoid mortgage insurance?

Lenders mortgage insurance (LMI) can be avoided by having a substantial deposit saved up before you apply for a loan, usually around 20 per cent or more (or a LVR of 80 per cent or less). This amount needs to be considered genuine savings by your lender so it has to have been in your account for three months rather than a lump sum that has just been deposited.

Some lenders may even require a six months saving history so the best way to ensure you don’t end up paying LMI is to plan ahead for your home loan and save regularly.

Tip: You can use RateCity mortgage repayment calculator to calculate your LMI based on your borrowing profile

Will I have to pay lenders' mortgage insurance twice if I refinance?

If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments. 

If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.