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The facts on the First Home Super Saver Scheme

The facts on the First Home Super Saver Scheme

It feels like every week there's a new reason why we can't afford to enter the property market. But the truth is it's not your smashed avocado and pricey morning coffee that's holding you back. As the property prices continue to climb, so do deposit amounts. And your savings targets get further and further away.

Fortunately, saving for a deposit on your first home just got a little easier with the Federal Government's new First Home Super Saver Scheme. From 1 July 2017, first home buyers can make voluntary contributions to their super fund, which can be withdrawn and used as part of a deposit after 1 July 2018.

The average price of houses are increasing, with Sydney's median price reportedly adbove $1 million. How long would it take you to save a 20% or even a 10% deposit? For some people it would probably take a couple of decades, at least. But with the government's new scheme, the Australian dream could be within reach.

What does the scheme involve?

You can now make voluntary contributions to your super fund up to $15,000 per year and $30,000 in total, which can be withdrawn and used as part of the deposit for you first house. These contributions will be taxed at a lower rate of 15%, as opposed to your marginal tax rate, which can be up to 45% depending on your income.

Many Australians will be able to salary sacrifice these contributions, which means the contribution will be made frm your income pre-tax. According to the First Home Super Saver Scheme - Estimator, if you have a taxable income of $65,000 and salary sacrifice $5,000 annually, your take-home annual pay will only reduce by $3,200 and you'll have estimated $27,754 available for a deposit on your first home after six years.

If you put $5,000 of your income into a savings account with an interest rate of 3.05% per annum over 6 years, assuming you continue to make annual contributions of $5,000 to the account, your final balance will be $32,382.68, with $2,382.68 in interest on top of the $30,000 saved.

Alternatively, you could put your money into a term deposit. But remember, you'll be charged your usual marginal tax rate on any money you put into either a savings account or a term deposit. This means your annual take-home pay will be lower than if you choose to salary sacrifice these contributions. Check out the ATO website for more information.

Find what works for you

When it comes to saving for your first home, you have to find a solution that will work for you. You might appreciate the ability to salary sacrifice, as it takes away from the temptation to spend your income. Instead, the money goes directly into your super fund before you're paid, so you ability to save isn't dependent on your impulsive control.

Instead, you might prefer to have control over where your money goes once it's in your hands (or bank account). This gives you the option to deposit your savings into an account of your choosing.

If you're worried about never being able to buy the house you want, there are other ways of entering the property market. It's about being resourceful with your time and money. Make sure you compare all your options and compare which ones suit your financial situation best.

Start comparing savings accounts and term deposits to find out how much money you can save for a house deposit.


InfoChoice Pty Limited ABN 93 061 105 735, AFS Licence and Credit Licence Number: 349445. Any advice provided by InfoChoice is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice we give you, having regard to your personal situation, before acting on our advice, purchasing or applying for any product. We may receive fees and commission from product providers for services we provide and you should consider Infochoice’s Financial Services Credit Guide, which provides information about our services and your rights as a customer of InfoChoice.

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Today's Home Loan Rates

Institution Product
Rate^ (%)
Rate* (%)
Moneyer - Pure & Simple Summer (30 - PAYG) 3.44 3.44 Go to site
Home Value Loan - Owner Occupied 3.59 3.60 Go to site
Advantage Home Loan 80 (PAYG Special Category 1) 3.64 3.79 Go to site
Special Low Rate Variable Home Loan 3.73 3.73 Go to site
Discount Offer for Owner Occupied Variable P&I Rate (<$700,000) 3.74 3.74 Go to site
Institution Product
Rate^ (%)
Rate* (%)

^Standard rate for a $250,000 standard loan. The 3 year table shows loans that are fixed for 3 years.
*Comparison rates shown are based on a home loan of $150,000 for 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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