Saving for a first home while paying rent can feel like trying to move forward while standing still.

Money leaves the account every week for housing, while the deposit target sits somewhere in the distance. That is why many first-home buyers focus immediately on cutting coffees, subscriptions and small lifestyle expenses.

Those changes can help, but the bigger question may be whether the household’s largest regular costs are aligned with the goal.

In the source video for this article, Keaton reflects on a period before buying his first home when he and his partner deliberately chose very modest accommodation and temporarily reduced discretionary spending. The point was not that everyone should live the same way. It was that their housing choice matched the goal they had set.

That creates a more useful question: how to save for a house deposit while renting without turning the process into an endless period of restriction?

Why Can Rent Be One of the Biggest Savings Levers?

For many renters, housing is one of the largest recurring expenses in the budget.

That means a change in rent can have a larger impact on monthly savings than cancelling one or two small subscriptions. But the calculation needs to be realistic.

A cheaper rental may also create higher transport costs, a longer commute, less access to family support, more moving expenses or a lower quality of life. Saving $150 a week in rent does not help as much if an extra $100 a week disappears into fuel, parking and other costs.

The useful number is the net saving after the full lifestyle impact is considered.

This is why a temporary housing strategy should be treated as a deliberate trade-off, not a punishment.

What Did the Source Video Actually Show?

The lesson in the video is not simply “spend less.”

Keaton describes having a clear first-home goal, choosing inexpensive accommodation that still worked for everyday life, and becoming much more intentional about discretionary spending for a period of time.

That matters because vague saving goals are easy to ignore.

“I should save more” does not tell a household what needs to change. “We want to build a specific deposit by a specific point, and we are willing to make temporary trade-offs to do it” is much clearer.

The strategy becomes easier to assess when the sacrifice has a purpose, a number and an end point.

How Much Deposit Should a First-Home Buyer Aim For?

There is no single deposit figure that suits every buyer.

Moneysmart says a good savings goal is 20% of the purchase price plus enough to cover buying costs. A 20% deposit can also help avoid lenders mortgage insurance.

But eligible first-home buyers may be able to purchase with a smaller deposit.

The Australian Government 5% Deposit Scheme currently allows eligible first-home buyers to buy with a minimum 5% deposit without paying lenders mortgage insurance. Since the scheme was expanded from 1 October 2025, it has no income caps and no waitlist, although the property must fall within location-specific price caps and the buyer must meet the scheme and lender requirements.

The smaller minimum deposit does not mean 5% is automatically the right target for every buyer. A larger contribution can reduce the loan amount and repayments, while a smaller deposit may allow someone to enter the market sooner.

The right deposit target depends on the property price, buying costs, loan structure, available schemes and the repayment level the household can manage.

Why Is the Deposit Only Part of the Cash You Need?

A common mistake is to save toward the deposit and forget the costs around the purchase.

Depending on the state, property and buyer, costs may include:

• stamp duty or transfer duty where concessions do not fully apply
• conveyancing or legal fees
• building and pest inspections
• moving costs
• loan or valuation fees where applicable
• insurance and initial ownership costs
• an emergency buffer after settlement

Moneysmart specifically recommends allowing for buying costs in addition to the deposit.

That is important when deciding whether to make a major lifestyle change to save faster. The goal should be the amount needed to buy and settle comfortably, not simply the minimum percentage required to sign a loan.

Does Cutting Small Expenses Still Matter?

Yes, but the purpose matters more than the individual item.

A coffee is not the reason property prices are high. Cancelling one streaming service will not suddenly create a deposit.

But repeated discretionary spending can still reduce the amount available for a goal.

The source video makes a more balanced point: small spending decisions matter when they form part of a broader, intentional savings plan. The problem is not buying one coffee. The problem is having no visibility over where the deposit money is meant to come from.

A useful savings plan may combine several levers rather than relying on one dramatic cut.

• housing cost
• transport and commuting
• subscriptions and memberships
• eating out and delivery
• large discretionary purchases
• automatic transfers into a dedicated savings account

The aim is to find the changes that create meaningful savings without making the plan impossible to sustain.

Should You Move Somewhere Cheaper Just to Save a Deposit?

Not automatically.

A cheaper rental can make sense when the net saving is meaningful and the trade-offs are temporary and manageable.

Before moving, it may help to compare:

• the rent difference
• moving costs and bond requirements
• extra fuel, tolls or public transport
• time added to the commute
• access to work, family, childcare and support networks
• how long you realistically expect to stay
• how much the move would add to monthly deposit savings

Sometimes the best strategy is to stay where you are and change other spending. Sometimes a lower-cost rental can materially shorten the saving period.

The answer depends on the full household position, not a headline about whether renting is “wasted money.”

How Long Should a Deposit Savings Sprint Last?

A savings strategy becomes harder when it has no finish line.

One way to make the process more practical is to create a time-boxed savings period.

For example, the household may decide to review the next 6 or 12 months around a defined target. That can make temporary sacrifices easier to understand and easier to measure.

The plan can then be reviewed if rent changes, income changes, property prices move or a first-home scheme changes the amount required.

The objective is not to live as cheaply as possible forever.

It is to make sure the short-term lifestyle is helping create the long-term outcome.

What Should You Avoid Cutting Too Aggressively?

Saving faster should not require removing every financial buffer.

A deposit is important, but so is the household’s ability to handle an unexpected bill before and after settlement.

It can be risky to direct every available dollar into a deposit while leaving nothing for emergencies, insurance excesses, moving costs or the first repairs that come with home ownership.

The stronger question is not “How quickly can we reach the minimum deposit?”

It is “How can we reach a realistic purchase position without arriving at settlement with no room left?”

Why Does Borrowing Capacity Still Matter While You Save?

The deposit and the loan need to work together.

A household can build a strong deposit and still find that the amount it wants to borrow does not fit lender policy or the income available to support repayments.

ABS data shows the average first-home buyer loan reached about $614,000 in the March quarter of 2026. That does not mean an individual buyer should borrow anywhere near that amount. It simply shows that first-home borrowing is substantial and the repayment side of the plan matters alongside the deposit.

That is why it can be useful to understand borrowing capacity before the deposit is completely finished. A broker can help explain what lenders may consider, what repayment ranges look like and whether the savings target matches the likely purchase range.

How Can a Mortgage Broker Help Before You Are Ready to Buy?

You do not need to wait until the entire deposit is saved to start understanding the lending side.

A mortgage broker can help you explore:

• an indicative borrowing-capacity range
• how different deposit levels may affect the loan
• whether an Australian Government first-home scheme may be relevant
• what additional purchase costs may need to be funded
• how current debts and credit limits affect the application
• what information lenders may need when you are ready to apply

That can turn the savings target from a guess into a more informed plan.

Conclusion

Saving for a first home while renting is not only about finding more small expenses to cut.

Sometimes the bigger opportunity is to look at the structure of the household budget and ask whether the current housing cost supports the goal.

For Keaton, a period of modest rent and deliberate spending was a temporary strategy that helped move the first-home goal forward.

The lesson is not that everyone should copy the same sacrifice.

It is that a deposit plan works better when the trade-offs are intentional, measurable and connected to a realistic property and lending target.

If you are saving for a first home and are unsure what deposit target makes sense, LiveInvest can help you understand the lending side of the plan, including indicative borrowing capacity, deposit options and first-home buyer schemes that may apply to your circumstances.

See Other Blogs: Why Having Equity Does Not Automatically Mean You Can Buy Again

TL;DR

• Rent can be one of the largest costs to review when saving for a first-home deposit.
• A cheaper rental only helps if the net savings outweigh extra transport, moving and lifestyle costs.
• Moneysmart says 20% plus buying costs is a useful savings goal, but eligible buyers may be able to use the Australian Government 5% Deposit Scheme.
• Small expenses matter most when they are part of a clear, time-boxed savings plan.
• Deposit savings and borrowing capacity should be reviewed together before choosing a property budget.

Frequently Asked Questions

Disclaimer

This is general information only and does not consider your personal circumstances. It is not financial advice. First-home buyer schemes, lending criteria, borrowing capacity, deposit requirements and property price caps can change and vary by lender and location. Confirm current eligibility and lending requirements before making decisions.