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How to save a $100k deposit in four years

Saving $100,000 over four years - $25,000 per year, or about $2,080 per month - is a realistic first-home deposit goal for many Australian households. The question is not whether it’s possible at $125k combined income; it’s how to structure it so you don’t give up halfway.

The base math

  • Average target: $25,000/year = $2,080/month
  • After-tax starting point for a $125k combined couple (roughly $95k after tax): saving $25k means saving 26% of take-home pay
  • Interest on savings: at 5% p.a., $100k saved smoothly over 4 years earns you about $9,500 in interest along the way

Where the money has to come from

A couple on $95k take-home with $2,080/month savings has roughly $5,820/month left for everything else - rent, utilities, food, transport, leisure, clothes. If current rent and living costs exceed $5,000/month, the plan is already stressed before it starts.

Honest audit exercise: pull 3 months of bank statements. Categorise every transaction. Identify the spending line items where $500-$1,000/month can be reduced without materially reducing quality of life. Common candidates:

  • Eating out: $300-$800/month reduction typically available
  • Subscriptions: $100-$300/month of redundant or unused subscriptions
  • Car costs: refinancing a car loan or switching insurance saves $100-$300/month
  • Holiday budget: reducing to 1 holiday per year saves $2,000-$4,000/year

Where to hold the money

High-interest savings: 5.0-5.5% in 2026 at the sharpest providers (ubank, ING, Macquarie savings maximiser equivalents). Compound interest at this rate adds ~$10k over 4 years.

First Home Super Saver Scheme: up to $50k of voluntary super contributions per applicant can be withdrawn for a first home deposit, with tax-effective treatment (contribution at 15% tax vs your marginal rate, withdrawal at your marginal rate minus 30%). For high earners, this saves 10-20% in effective tax on the contribution/withdrawal cycle. The catch: it’s not accessible until the FHSSS release is processed, and there are annual caps ($15k/year contribution).

Term deposit laddering: if you’re confident you won’t need the money for 12 months, laddered term deposits squeeze an extra 25-50 bps over high-interest savings.

Year-by-year build

  • Year 1: $25k saved, earning ~$600 interest. Total: $25.6k
  • Year 2: $50.6k + $2.5k interest = $53.1k
  • Year 3: $78.1k + $3.9k interest = $82k
  • Year 4: $107k + $5.3k interest = $112.3k

If you start at $0 and save nothing extra, you hit roughly $112k in four years at 5%. The buffer of $12k covers stamp duty, legal fees, and moving costs.

The reality check

Four years of consistent saving requires commitment through life events - weddings, job changes, relationship stress, illness. The plan usually slips. Build in contingency by targeting $28k/year instead of $25k; aim for a buffer of 15-20% above the target deposit.

Is 4 years the right horizon?

Shorter horizons (2-3 years) require higher savings rates and are more prone to derailment. Longer horizons (6-8 years) expose you to more price appreciation before you buy - Sydney and Melbourne have averaged 4-6% nominal price growth over 10-year windows, meaning a $650k target property today may be $780k-$850k in 6 years.

The optimal deposit horizon balances your achievable saving rate against market price growth. For most dual-income couples on $120k-$150k combined, 3-5 years is the realistic window.