Common Mistakes When Saving for Your First Home in Young

Treating Savings Like Spare Money

The deposit sitting in your everyday account earns almost nothing and gets spent on things you forget about within a week. A separate high-interest savings account keeps your deposit quarantined and working for you at the same time. Most lenders also want to see three months of consistent saving behaviour, which means regular deposits into an account that isn't being raided for takeaway or weekend trips to Canberra.

Consider a buyer in Young earning $65,000 who redirects $600 each fortnight into a dedicated savings account from the day they decide to buy. After 18 months, they have close to $23,000 saved, which covers a 5% deposit on a home in the area and leaves room for upfront costs like conveyancing and building inspections. That same buyer leaving the money in a transaction account would likely have half that amount, or less, because the money was always visible and always available.

Lenders assess your savings history during the home loan application process, and a pattern of steady contributions signals financial discipline. Withdrawals for non-essential spending can raise questions, particularly if they happen in the months leading up to your application.

Not Knowing What Deposit Size You Actually Need

You do not need a 20% deposit to buy your first home. The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with just 5% down, and the government guarantee covers the gap so you avoid paying Lenders Mortgage Insurance. In Young, where properties in the regional market are well within the $800,000 cap for other areas of New South Wales, this scheme opens the door much sooner than most buyers expect.

A buyer aiming for 20% might spend years saving when they could have entered the market with 5% or 10% and started building equity. The longer you wait, the more prices can move, and the more rent you pay instead of putting that money toward your own home. A 10% deposit is another common threshold that still attracts LMI but can be offset by the amount you save in rent by moving sooner.

If you are a single parent or legal guardian, the 5% Deposit Scheme allows entry with just 2%. These low deposit options are available through participating lenders, so your loan structure, interest rate type, and features like an offset account will depend on which lender you choose and their product range.

Ignoring the First Home Super Saver Scheme

The First Home Super Saver Scheme lets you make voluntary contributions into your super and then withdraw up to $50,000 to put toward your deposit. Concessional contributions are taxed at just 15% instead of your marginal rate, which means someone on a $70,000 income saves around 17.5 cents in tax for every dollar contributed if their marginal rate is 32.5%. Over two or three years, that adds up to thousands of dollars in tax savings that go straight into your deposit.

You need to apply to the ATO for a determination before you sign a purchase contract, and the amount you can access includes your contributions plus associated earnings, minus a withholding tax when the funds are released. Not every buyer will benefit equally, but for someone in Young with a stable income and a few years to save, it is one of the few ways to legally access your super early and put it toward something that builds long-term wealth.

The scheme works alongside the 5% Deposit Scheme and New South Wales stamp duty concessions, so you can stack these benefits without losing access to any of them. The catch is that you need to plan ahead, because contributions take time to process and the ATO determination is not instant.

Overlooking Stamp Duty Concessions in New South Wales

New South Wales offers a full stamp duty exemption on homes valued up to $800,000 for eligible first home buyers, and a sliding concession on properties between $800,001 and $1,000,000. In Young, where the median property value sits comfortably under that $800,000 threshold, most first home buyers will pay zero stamp duty if they meet the eligibility criteria.

You need to move into the home within 12 months of settlement and live there as your principal place of residence for at least 12 continuous months. If you buy vacant land, the full exemption applies up to $350,000, with a concession available on land valued between $350,001 and $450,000. Stamp duty on a $400,000 home would normally cost several thousand dollars, so the exemption is not a small saving.

The concession applies to both new and established homes, which gives buyers in Young access to the full range of properties on the market, from older cottages near the town centre to newer builds on the outskirts. You do not need to chase a new build to access this concession, unlike the First Home Owner Grant, which is limited to new homes only in New South Wales.

Forgetting About Upfront Costs Beyond the Deposit

The deposit is just one part of what you need to have saved. Conveyancing, building and pest inspections, and loan application fees can add several thousand dollars to the amount you need at settlement. If you are buying in Young, a building inspection will typically cost between $400 and $600, a pest inspection another $300 to $400, and conveyancing fees can range from $1,200 to $2,500 depending on the complexity of the transaction.

If your deposit is exactly 5% and you have nothing left over, you will either need to borrow those costs, delay settlement, or pull out of the purchase altogether. Lenders also want to see that you have saved your deposit through regular contributions rather than a one-off gift or loan, although a genuine gift from a family member can be used to top up your deposit as long as it is declared and documented correctly.

In our experience, buyers who budget for 7% to 8% of the purchase price in total upfront costs are rarely caught short at settlement. That includes the deposit, all professional fees, and a small buffer for anything unexpected that comes up during the inspection or contract review.

Applying for Credit in the Months Before You Buy

A new car loan, a higher credit card limit, or even a Buy Now Pay Later account can reduce your borrowing capacity by thousands of dollars. Lenders assess your income against all your ongoing commitments, and a $400 monthly car payment might reduce the amount you can borrow by $80,000 or more, depending on the lender's serviceability formula.

If you are serious about buying in the next 12 months, avoid taking on any new debt and consider paying down or closing any credit accounts you are not using. Even a credit card with a zero balance will be assessed as though you have drawn the full limit, because the lender assumes you could max it out at any time.

This is one of the most common mistakes we see, and it is entirely avoidable. If you need a car, consider waiting until after you have settled on your home, or keep the loan amount as small as possible. The same applies to personal loans, Buy Now Pay Later accounts, and even adding your name to someone else's loan as a guarantor.

Call one of our team or book an appointment at a time that works for you. We will walk you through your deposit options, explain which schemes you can access, and help you build a timeline that gets you into your first home without the guesswork.

Frequently Asked Questions