Saving for a house deposit while renting and raising a family
17 Sep 2019
It might seem like an impossible feat to save for a house deposit later in life while renting and raising two children. But against all odds, long-standing member Matt did just that.
So, we decided to sit down with Matt to find out how, plus a little extra…
Hi Matt! Congratulations on buying your first home. Are you able to tell us how your buying journey began?
Well, I met my wife when I was 21 and not long after, we decided to rent a place together.
But it wasn’t until our first son was born that we really started to think seriously about saving for a house. We were both 26 by then and sick of paying off someone else’s mortgage.
Plus, we really wanted to make memories in our own house together as a family. It wasn’t easy as we had little savings behind us, so we had to be realistic with our timeframes and goals.
We had a few set backs along the way but we were determined to make it happen. We’re now 38, and have an amazing home to call our own.
So, can you tell us what you did to save for your house deposit?
My wife and I put $100 a month into a Super Growth Bond for 10 years. These funds were invested and grew over time. This was all tax-free after holding the account for 10 years – so it was a perfect long-term savings plan for us.
We were lucky enough to move in with my Mum for a few years to save additional cash. This really helped with reducing our expenses and babysitting costs, which was very handy.
After school care
Again, we had family help out with afterschool care, which saved us from spending $200+ per week on OHSC.
We also set up a Netsave Account and transferred as much as we could into there each week. Unlike our Super Account, our Netsave Account has a good interest rate no matter how many deposits or withdrawals we make.
We took out our home loan with Credit Union SA, and received their $5,000 First Home Buyers Grant – which was amazing.
And because we were building our house, we also received the $15,000 State Government First Home Owners Grant.
Doing it as a land and build meant less deposit up front was needed as we could use the grants to help cover these costs. We only had to save 5% of the land purchase price to get started!
Did you have to forgo a few little luxuries along the way?
I had a collection of Penfold wines that I sadly sold at auction which netted around $4,000.
I love coffee and would normally buy one every morning.
I know it’s only a little cost but it was adding up, so I stopped and started to make coffee from home instead. However, I treat myself to a bought coffee on weekends. It was a change I didn’t really want to do but it did help us save some cash and the weekend coffees taste so good now!
The kids and I made food menus for the weekend and we all cooked together which saved on take away food.
Did you still have some form of a life while you were saving for your house deposit?
Having two young kids we don’t go out partying on the weekend, but we do make time to spend together and make sure we have family time playing games or seeing movies. We still set aside cash for these things so the kids aren’t just stuck at home all the time. We are massive CROWS supporters and go to each home game.
Did you go with a Fixed or Variable Home Loan?
We choose a Variable Rate Home Loan Package so we could take advantage of the benefit of using offset accounts to help reduce interest on the Home Loan.
Also, there are no caps on repayments so we can pay off as much as possible over the first few years.
Rates will probably drop even further too, so we can take advantage of any further reductions in interest. When the rates start to rise, then we will look to fix the rate from there.
Did you come across any unexpected costs when buying your first home?
The stamp duty and lenders mortgage insurance (LMI) were costs I was expecting but they were still large amounts. The moving cost and getting all the utilities arranged was a much smaller amount but something we kind of forgot about.
Thanks so much for sharing your story with us Matt. We hope you and your family enjoy your new home!
Want to find out more?
If you would like to find out more about your home loan options, we’re more than happy to walk you through the process. So why not make an appointment with one of our friendly Mobile Lending Managers who can come to your home or office at a time that suits you. Or call us on (08) 8202 7777 or visit us at 400 King William Street, Adelaide between 8am – 8pm weekdays or 8am – 2pm Saturdays.
This is general advice only and doesn’t take into account your objectives, financial situation or needs. Conditions, fees and lending criteria apply and are available on request.