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Couples need to save for 5 years for home


An average couple will need to save for at least five years to stump up a first home deposit, a study shows.

The study by financial comparison company Rate City shows a first home buyer would take five years and seven months to save a 10 per cent deposit of $30,667 for a mortgage size of $276,000.

And a dual income couple with a mortgage capacity of $540,000 would take more than five-and-a-half years to save a 10 per cent deposit of $60,000.

The figures are based on a recommended maximum mortgage size for first home buyers on an average income of $70,000 per year who save 10 per cent of their income.

RateCity spokeswoman Michelle Hutchison said the findings showed that housing affordability was still out of reach for many Australians.

"Despite lower interest rates and fallen property values, buying a home is still a distant dream for many Australians and the reality is that some will never afford home ownership in the areas they want to live in," Ms Hutchison said.

A 10 per cent deposit is now the minimum amount required by many lenders, while many banks want at least a 20 per cent deposit before they relax their requirements for mortgage insurance.

Rate City found it would take a first home buyer 13 years to save the recommended 20 per cent deposit plus $10,000 for fees.