Long road to saving a house deposit
SAVING a house deposit has never been tougher for solo buyers.
Depending on location, savers will need tens of thousands of dollars to stump up a 20 per cent deposit.
Latest CoreLogic data shows the national median house value is $552,000 – an average price of $656,000 for city buyers and $361,000 in regions.
New ING statistics found only 3 per cent of first home buyer customers in 2017 were single applicants, while the rest joined forces with someone else.
ING customers had an average of $83,000 saved for a deposit.
HAVE A PLAN
Online lender Tic:Toc– which provides real-time loans backed by Bendigo and Adelaide Bank – chief executive Anthony Baum said aspiring buyers need a plan of attack. Work our your purchasing price range by using online calculators and then pen out an achievable savings plan. Be mindful it will take time to reach this goal.
SIZE OF DEPOSIT
Industry experts suggest borrowers aim for a 10 per cent deposit, but be warned, anything less than a 20 per cent deposit means you’ll be stung with the expensive lenders’ mortgage insurance.
This protects the lender if the borrower cannot repay the loan.
Tic:Toc data found it can take years for a single person to save a 20 per cent deposit while on the average salary and paying the average rent.
NSW borrowers need $140,000, which would take 18 years to save; Queensland $96,000 and 4.5 years.
HOW TO DO IT
Ben Doecke, 26, tucked away more than $100,000 before buying a $350,000 twobedroom Adelaide home on his own.
“I cut back on alcohol, I bought a second-hand car and I lived back with my parents for a while,’’ he said.
ING’s head of customer experience and service Tim Newman said “an automated savings plan” is key to building up savings.
“Ten per cent is a good deposit to have as a minimum considering there’s other costs like stamp duty and the cost of moving in,’’ he said.
INCENTIVES
The First Home Super Saver was rolled out last year. This allows savers to make voluntary concessional (beforetax) contributions into their super fund to speed up their savings plan.