Mortgages, Money and Me


In most cases a deposit of at least 5% of the purchase price of your house is a minimum requirement for a home loan (unless you have a supportive family member who can offer their property as guarantee security for you – ask us how). You also need to budget around another 5% of the purchase price to cover costs such as Stamp Duty if you are not a First Homebuyer.

If you are currently renting, it would be good practice for you to pay the difference between your current rent and estimated loan repayments into your savings account. This not only will help with your own peace of mind about home loan affordability but also demonstrate to a bank that you have the ability to do so!

Use these calculators in conjunction with the one below to see how much you can save!

Savings Goal – How long to save
Savings Goal – How much to deposit
Loan repayments

Simple savings strategy

Open three bank accounts. One is for SPENDING, one is for BILLS and one is for SAVINGS.

SPENDING – have your wages paid into this account. Immediately transfer a set amount to your bills account (see below how to calculate this) and transfer half of what is left to your savings account. The rest is yours for groceries, clothing and entertainment.

Set up an automatic transfer if you can. Once you are used to not having the money available you will adjust your spending habits to fit.

BILLS – this is for your regular monthly expenses such as phone, internet, rent, car loan, insurances, etc. The fixed amounts that are essential and don’t change each month. Look at what you have spent in the last few months and identify these costs. Your bank statements can help you with this.

If you have accounts that you pay annually, then divide the payment by 12 to approximate a monthly cost. Transfer the average monthly cost of these fixed expenses from your spending account to the bills account. Some months you won’t spend all of the allowance, and some months you will spend more… but it should all average out.

Ask yourself if there is any scope to reduce these costs. For example, you could switch to a different phone plan or cancel a membership if it’s something you are not using. Even a small change can make a difference.

SAVINGS – try saving half of what is left of your wages after you have transferred the fixed costs to your bills account. If you can’t do half, then do a third. If you can’t do that then do a tenth.

Find out what works for you, but develop a savings habit that’s not negotiable. Sometimes you may have to dip into this account for emergencies, and that’s ok…. But make sure it’s an emergency and not just because it’s there!

Bonus strategy – Cash

Pay yourself a weekly cash allowance and use that for your purchases instead of ‘tapping’ your card. You will become much more aware of your spending, and won’t spend more than you have budgeted.

When you go out, set yourself a strict limit as to how much you are willing to spend. If you have decided you will spend $30, then don’t let yourself dip back into your account to spend more.

Bonus strategy 2 – Home prepared meals

Try to cook more at home.

Have some stand-by recipes that use simple pantry items and make sure you always have these on hand for when your spending account is getting low by the end of the week.

Prepare your lunches rather than buying them.

Bonus strategy 3 – Restaurants and socialising

You don’t have to live like a hermit! If you know you are going to a particular restaurant then see if you can find their menu online before you go, and make your meal decision before you are at the table. You will choose within your budget rather than deciding quickly when you are hungry!

See if you can find good restaurants that are reasonably priced and suggest those to your friends when you are going out.

If you are going out for drinks, then stop once you have reached your spending limit.

Find low cost or free alternatives for other activities, such as half price Tuesday at the movies, or suggest a BBQ at the park or beach with your friends.