In short: This calculator projects how many months it will take to reach your deposit target from your current savings, regular contributions and savings interest rate. The key rule of thumb: a 20% deposit avoids lenders mortgage insurance, but a 5% deposit under the First Home Guarantee gets most Melbourne first home buyers in years earlier. On a $650,000 home, that is $130,000 versus $32,500.
- Deposit target$65,000
- Stamp duty (VIC, first home buyer)$11,357
- Allowance for legal, inspections, fees$3,000
- Total needed$79,357
- Still to save$59,357
- LMI at this deposit (est.)$19,498
With the First Home Guarantee you may only need 5% and pay no LMI. Prices and rates move; review the target regularly.
Time to reach your deposit: 3 yrs 0 mths
That is a general estimate on standard assumptions. Every lender applies its own expense benchmarks, income shading and policy, so the real figure moves from lender to lender. Gorakh spent years as a senior credit officer deciding exactly these questions. Send him the numbers above and he will tell you what is realistic and which lenders fit — at no cost to you for home loans.
- A former senior credit officer reads itGorakh assessed loan applications on the lender side before he became a broker.
- A real office you can visit23 Astbury Crescent, Mickleham VIC 3064 · ABN 90 160 461 553
- Fees and complaints in writingRead the Credit Guide and our complaints and AFCA process before you commit to anything.
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Prefer to talk first? Book a free 15-minute call 0426 403 703 Full 2-minute pre-assessment
Saving a deposit is the slowest part of buying, so it pays to know your real number and your date.
How this calculator works
Compounding savings
Each month the calculator adds your contribution to the balance and applies one twelfth of the annual interest rate to the running total. That is how a high-interest savings account behaves. It stops counting the month your balance meets the target.
The target
Your target is the deposit percentage of the purchase price plus, optionally, upfront costs such as stamp duty, conveyancing and building inspections. Melbourne first home buyers pay no land transfer duty on homes up to $600,000 and a sliding concession up to $750,000, which the upfront costs calculator applies in detail.
Assumptions
- Contributions are made at the end of each month and interest is credited monthly.
- Savings interest is shown before tax. Interest on savings is taxable income, so your after-tax growth is a little lower.
- The purchase price is held constant. In reality prices move, which is one reason to buy sooner with a smaller deposit where it stacks up.
How to use the result
Look at three numbers: the months to a 5% deposit, to 10% and to 20%. If the 20% figure is more than four or five years away, compare the cost of waiting against paying LMI or using the First Home Guarantee, which lets eligible buyers purchase with 5% and no LMI. Then check that your savings pattern meets the genuine savings test most lenders apply: typically 5% of the price held or accumulated over three months. Our genuine savings guide explains what counts.
Worked example
Priya and Sam rent in Epping and want a $650,000 home in Wollert. They have $20,000 saved and can put away $2,000 a month into an account paying 4.50% p.a.
| Goal | Deposit needed | Months to reach it | Roughly |
|---|---|---|---|
| 5% (First Home Guarantee) | $32,500 | 6 | Half a year |
| 10% deposit | $65,000 | 21 | 1.8 years |
| 20% deposit | $130,000 | 49 | 4.1 years |
| 20% with $3,000 a month | $130,000 | 34 | 2.8 years |
| 20% at 0% interest (cash under the mattress) | $130,000 | 55 | 4.6 years |
Interest matters less than contribution size: lifting monthly savings from $2,000 to $3,000 removes 15 months, while a 0.50% higher rate removes one.
What this calculator doesn't include
- Tax on savings interest, which reduces your net rate depending on your income bracket.
- Price growth on the home you are saving for; a 4% rise on $650,000 adds $26,000 to a 20% deposit target each year.
- Lenders mortgage insurance for deposits under 20%, which can usually be added to the loan; see the LMI calculator.
- The First Home Owner Grant of $10,000 on a new home valued up to $750,000, which counts as funds to complete but not as genuine savings for most lenders.
Tips to improve the outcome
- Automate a transfer on payday so saving happens before spending.
- Keep the deposit in a separate high-interest account with bonus-rate conditions you can actually meet.
- Consider a guarantor home loan if a parent has equity; it can remove the deposit gap entirely without LMI.
- Check whether you qualify for the First Home Guarantee using the eligibility calculator, since the Melbourne price cap is $950,000 with no income cap.
Frequently asked questions
How long does it take to save a house deposit in Melbourne?
At $2,000 a month with 4.50% interest and $20,000 already saved, a 20% deposit on a $650,000 home takes about four years. A 10% deposit takes under two years and a 5% deposit under one. The timeline depends far more on how much you contribute each month than on the interest rate you earn.
How much deposit do I need for a $650,000 house?
A 20% deposit is $130,000 and avoids LMI. A 10% deposit is $65,000 and 5% is $32,500. Eligible first home buyers can use 5% under the First Home Guarantee without LMI, provided the property is within the $950,000 Melbourne cap. Add upfront costs for conveyancing and inspections; first home buyers in Victoria pay no stamp duty at this price on an established home under $600,000 and a concession up to $750,000.
Is it better to save 20% or buy sooner with 5%?
Often buying sooner wins in a rising market because price growth outpaces savings, and the First Home Guarantee removes the LMI penalty. A 5% deposit does mean a larger loan and higher repayments, so run both scenarios and make sure the bigger repayment fits comfortably after the 3% assessment buffer lenders apply.
Do lenders count a gift as deposit?
Yes, but most lenders separate a gift from genuine savings. A gift can fund the deposit, while genuine savings of typically 5% of the price held for three months may still be required to show a savings habit. Some lenders waive this if you have a solid rental history. Our deposit guide covers the options.
Talk to GNT Finance
If the timeline looks longer than you hoped, there is usually a shorter path, whether that is a low-deposit loan, a guarantor, or a government scheme you did not know you qualified for. GNT Finance maps out the options for Melbourne buyers, at no cost to you for our home-loan service in most cases. Book a free consultation or call 0426 403 703.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.