Deciding to buy your first home can be one of the most exhilarating periods of your life. When you’ve been slowly trudging on the rental treadmill, the prospect of starting anew in a fresh property with the future ahead is a fantastic feeling. It’s this sentiment that should support and encourage you to approach a mortgage broker about securing your first home loan.

It can be a disheartening when media has been proclaiming the fall of affordability and the decline of first home buyers. The Real Estate Institute of Australia revealed that the proportion of first home buyers made up only 13.7 per cent of the total owner-occupied housing finance commitments in February 2015, but stay positive: Your journey to home ownership has only just begun.

With a bit of careful consideration and by tucking the following saving tips into your arsenal, you can also make the move from rental to first home – and the deposit is the first rung in the ladder.

Saving for your home doesn't need to be complicated - it just takes a bit of planning.

Saving for your home doesn’t need to be complicated – it just takes a bit of planning.

1. Pay down existing debts

According to the Australian Bureau of Statistics, households across the country owed $1.84 trillion in debt at the end of 2013 – that’s a whopping $79,000 per person. Whether it’s money owed on your credit card or other personal loans, these sums can undermine your ability to save for a deposit. Fortunately, particularly in the case of credit card balances, they are designed to be short term debts you can reduce or pay off in no time at all.

Try to pay off your credit card balance in full – or at least as much of it as you can – at the end of each month. In fact, if you have $4,400 worth of credit card debt and only make the minimum repayments, it would take you an eye-watering 31 years to pay it off according to the Australian Investments and Securities Commission. But if if you make monthly repayments of $216 you’d trim it down to just two years and save $9,700 in interest, which would significantly increase your borrowing power.

2. Cut down on additional costs

If you’re serious about getting together the money for a deposit, you should be able to make some minor changes to the way you live to boost your savings. This could be as simple as cutting down on your grocery bills, or reducing the number of coffees you buy out each week. To put it in perspective, the Gilkatho Cappuccino Price Index has the average price of a cup sitting at $3.54 – if you’re sipping at two a day during the working week, that’s hundreds of dollars in potential savings a month towards your deposit.

3. Automatic savings

According to Veda’s 2014 Credit Scorecard, 20 per cent of Australians said they don’t have any financial goals – but when you’re saving towards a deposit, planning is essential. It can be tempting to dip directly into your savings account, particularly when the majority of your salary is being deposited there. Instead, funnel your pay into a separate bank account with an automatic monthly transfer – and make sure it is disconnected from your everyday transaction account. This puts the funds out of arm’s reach and can prevent you from excessively spending.

You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!

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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.