How to make your deposit grow faster

WITH home loan interest rates currently at a low, many Australians feel now is a great time to consider entering the property market.

WITH home loan interest rates currently at a low, many Australians feel now is a great time to consider entering the property market.

RAMS Home Loan Centre Sunshine Coast principal Peter McGrath recognises that potential new home buyers can be put off by barriers such as saving for a deposit.

Mr McGrath said saving for a deposit could be difficult but there were some key steps he recommended to help save more quickly and realise the home-ownership dream sooner.

"Our top five tips for saving for a deposit are simple and straightforward to follow," he said.

Top five tips:

1. Do your research - work out what you want to buy and how much you will need, including additional costs such as stamp duty. Once you know all the costs you can calculate the exact amount you need. Also research to see if you are eligible for any government grants.

2. Set a budget - put simply to save you have to spend less than you earn. A budget will enable you to understand how you spend your money and target where to cut down. It's important to be realistic with your budget planning.

3. Cut down on expenses - simple changes to your spending and lifestyle habits can make a big difference.

4. Keep savings separate - reduce the temptation to dip into your hard-earned savings by opening a separate account. Better still, put your savings into an account that pays a higher rate of return, therefore making your money grow faster.

5. Pay off your debt - you could be paying interest on your debts so pay debts off as soon as possible and save the money you would have been paying on interest.