Saving for a house deposit — how long, and how much a month
There are two ways to ask this question, and which one you're asking depends on what you already know.
If you know what you can save each month, you want to know how long it will take. If you know when you want to buy, you want to know how much you need to put aside. Same problem, solved from opposite ends — so both calculators are here.
The bit most deposit calculators get wrong
Nearly every deposit calculator online treats the target as a fixed number. Work out 20% of today's price, divide by what you can save, done.
But you're saving towards a moving target. If house prices rise faster than your savings, the deposit you need grows while you're chasing it, and the finish line moves further away each year. That's the difference between a plan that works and one that quietly falls behind, and it's why both calculators below ask you for a house price growth assumption.
Nobody knows what house prices will do. That's not the point. The point is seeing how much the answer changes between 2% and 5%, so you know how much of your plan rests on an assumption you can't control.
How long will it take me?
Enter what you're saving now, what you've already got, and what you expect house prices to do. It tells you how many years until you're there and it runs the same numbers at several different growth rates, so you can see the spread rather than a single answer.
Use this one if your savings rate is the fixed thing and the date is what you're trying to find out.
How much do I need to save each month?
The other direction. Tell it what you're looking at buying in today's dollars and when you hope to buy, and it works back to a monthly figure. Then change the date, the price, or the growth rate and watch what happens to the number.
Use this one if the date is fixed (a lease ending, a baby coming, a job starting) and the question is whether the saving required is realistic.
Be careful with the returns assumption
Both calculators let you enter an expected return on your savings, and it's the input most likely to flatter you.
If you're buying within about nine years, you shouldn't be fully invested in shares. A deposit is money you need on a date, and shares don't respect dates. Putting a 7% or 8% return into the calculator will shorten the timeline nicely on screen and leave you badly exposed in real life if the market falls the year before you buy.
If the numbers don't work, the honest levers are the house price you're targeting or the date you're aiming at. Not the return.
What these two don't do
Both assume you save a regular amount that grows by a set percentage each year. Real saving isn't that tidy. Pay rises come in steps, a car dies, an inheritance arrives, someone goes part-time for a year.
There's no way around that in a spreadsheet, and it matters less than it sounds: none of those things are knowable in advance either. Treat the result as a starting point rather than a forecast.
The practical workaround is the one the spreadsheet format gives you for free. Save your copy. When your situation changes, open it, put in the new numbers, and see what moved. The calculator is yours. It's supposed to be re-run.
What deposit will you actually need?
Both calculators need a deposit target, and the usual answer is 20% of the purchase price. That's the level at which most banks lend without extra cost, and below it you can expect a low-equity premium or margin on top of your rate.
It isn't the only route. Some lenders go below 20% for owner-occupiers, First Home Loans and the First Home Grant have their own rules, and shared ownership schemes exist for people who can't get to a full deposit. Worth knowing what applies to you before you settle on the number you're saving towards.
Since July 2024 there's a second constraint too. Banks work within Reserve Bank debt-to- income limits. 6 times gross income for owner-occupiers and for a lot of buyers that, rather than the deposit, is now the thing that caps what they can borrow. Worth checking which of the two is your actual limit before you spend several years saving against the wrong one.
Want a second opinion on the plan?
If you'd like to talk through whether buying stacks up for you, where the deposit should sit while you save, and what you'd be committing to afterwards, get in touch for a free 30 minute chat. I'm independent and I don't sell mortgages.
Related calculators
How much house can I afford? — work backwards from your income to a realistic price
Debt to income calculator — the Reserve Bank limit on what you can borrow
Rent or buy a house — the full cost of both over the years you'd actually stay
Shared home ownership (You Own) — what a shared ownership scheme costs over time
Mortgage calculators — repayments, extra payments and how much you can borrow