Well, it’s probably the first question potential homebuyers ask themselves, their relatives, and real estate agents. And that perfectly makes sense—your savings matter a lot when it comes to buying your first home. Of course, you want to get trapped in hefty loans, spending all your monthly income on EMIs.
So, a certain amount of savings can be helpful. But how much is that “certain amount” of money you need to save?
Let’s figure out:
As someone who has worked hands-on with first-home buyers across Australia, from those trying to buy a house in Melbourne to clients navigating Sydney’s competitive market, I can tell you this: the “right” number isn’t one-size-fits-all, but there are realistic ranges you should anchor to.
Let’s break it down clearly and honestly.
The Realistic Savings Benchmarks for First-Time Home Buyers in 2025
The Deposit: 5% vs 20% (and the Reality In Between)
Traditionally, Australians were told to save 20% of the purchase price to avoid Lenders Mortgage Insurance (LMI). For a median-priced home, that’s a huge hurdle.
In practice today:
- 5%–10% deposit is common for first-home buyers using government schemes
- 10%–15% is a more comfortable middle ground
- 20%+ gives maximum borrowing power and flexibility
For example, if you’re aiming to buy a house in Melbourne at $650,000:1
- 5% deposit = ~$32,500
- 10% deposit = ~$65,000
- 20% deposit = ~$130,000
Most first-home buyers we work with fall into the $60,000–$100,000 savings range, not because they waited longer, but because they planned smarter.
Don’t Forget Upfront Costs (This Catches People Out)
It’s one of the biggest mistakes first-home buyers make: They focus on the deposit and overlook the upfront costs of purchasing property. These fees can add up quickly and, if you’re not expecting them, can ruin your purchase at the last minute.
First, there are conveyancing fees and legal costs, which take into account the reviews of contract documents, settlement, and transfer of title. These costs vary, depending on the state and provider, but they are also unavoidable and essential. Building and pest checks are essential when you’re about to purchase a property and opt for established houses. Passing them up to save money can lead to significantly higher costs if, after settlement, major problems are found.
You will also need to consider loan application and lender fees, which may include valuation costs, settlement fees, and mortgage registration charges. Several lenders forgo certain fees, but others do not, and those fees can come later in the process.
Stamp duty is typically your highest upfront cost after the deposit. The good news is that first-home buyer stamp duty exemptions and concessions can save you tens of thousands of dollars, but they are capped by the property price and vary by state or territory. Go over the cap by even a small amount, and the savings can evaporate.
A safe rule of thumb:
Have an extra 3–5% of the purchase price available beyond your deposit.
What Australians Are Really Saving
While researching from some real data, I came across a Reddit thread where Australians openly shared how much they saved before buying their first home.
Common themes:
- Many buyers felt pressure to compare themselves to others
- Several admitted they waited too long chasing a “perfect” savings number.
- Buyers who used professional guidance often entered the market earlier and with less stress.
These real conversations reflect what we see daily: comparison can delay progress more than a lack of money.
How Much Should You Save? Ask These 3 Questions
Instead of chasing a single “magic number” you saw online or in a property forum, it’s far more useful to step back and ask yourself three practical questions. These will give you a clearer, more personalised savings target — and reduce a lot of unnecessary stress.
What location am I buying in? (Capital city vs regional)
Where you purchase has the greatest influence on how much you will need to save. That’s because property prices in cities like Sydney and Melbourne are higher, so you’d need a larger deposit to compete with other buyers. In regional areas or outer suburbs, buyers can also tend to get a foot on the ladder with a smaller deposit, particularly if demand is more stable and price growth is less rapid. Your savings target needs to be based on the market you’re entering, not national averages.
Am I buying to live in or to invest?
Owner-occupiers can generally access first-home owner grants and stamp duty reductions on low-deposit housing. But investors generally require a higher deposit, and must also account for cash buffers related to vacancies and maintenance. Clarifying your purpose changes both your savings goal and your risk tolerance.
Am I using government schemes or buying solo?
Schemes such as the First Home Guarantee can go a long way to minimising the required deposit, but they have price caps and eligibility criteria. Purchasing alone allows for greater independence, but often demands more savings.
For many buyers, the use of a buyer’s agency that buys existing properties to guide them through these questions helps make this plan a reality. Clarity and strategy will always trump guesswork, so whether you’re having a discussion with a Property Buyers Agent in Melbourne or Sydney.
Why Trust My Advice
This guidance is based on:
- First-hand experience helping Australians buy their first homes and investments
- On-the-ground buyer data from lenders, brokers, and recent transactions
- Insights from real buyer behaviour shared in online property forums and finance communities
At Property Buyers Australia, we’re not selling homes — we represent buyers only. That independence means our advice is grounded in outcomes, not commissions.
Don’t Let “Perfect” Delay Progress
Saving matters — but strategy matters more. Many Australians chasing the “best property investment Australia has to offer” miss opportunities because they wait for certainty that doesn’t exist.
If you want clarity on:
- How much do you really need to save
- Whether now is the right time for you
- How to buy smarter, not just cheaper
Property Buyers Australia can help guide you through your first purchase with confidence, data, and calm decision-making — whether you’re buying your first home or stepping into property investment.
Sometimes the smartest move isn’t saving more, it’s getting the right advice earlier.
