How Much Do You Actually Need to Save?
Most buyers in Launceston save either 5% or 10% of the purchase price as a deposit. A 5% deposit lets you access the Australian Government 5% Deposit Scheme, which removes the need for Lenders Mortgage Insurance. A 10% deposit opens more lender options and may give you access to better loan features.
Consider a buyer looking at a property in Prospect. At a 5% deposit, they would need to save that amount plus allow for costs like conveyancing, building inspections, and moving expenses. Buyers who use the 5% Deposit Scheme still pay these settlement costs, which typically add several thousand dollars on top of the deposit itself. The scheme waives LMI but does not cover other upfront costs.
If you are saving 10%, you will pay LMI unless you reach 20%, but you gain access to a wider panel of lenders. Some lenders offer features like an offset account or redraw facility only to borrowers with a deposit above 5%. That flexibility can reduce interest over the life of the loan, so the choice between 5% and 10% is not just about speed.
What Government Support Can You Access in Tasmania?
From 1 July 2026, eligible first home buyers in Tasmania can receive a $20,000 First Home Owner Grant when purchasing or building a new home. The grant does not apply to established homes. There is no property price cap for the grant, and buyers must occupy the home as their principal place of residence.
The full stamp duty exemption that applied to established homes valued up to $750,000 ended on 30 June 2026. If you are purchasing an established home in Launceston from 1 July 2026, standard stamp duty applies. Buyers of new homes can still access the $20,000 grant, which can be used toward the deposit or settlement costs.
The Australian Government 5% Deposit Scheme applies across Tasmania with a price cap of $700,000 for Launceston and other regional centres, and $550,000 for areas outside those centres. Both the purchase price and the lender's valuation must fall at or below the applicable cap. You apply through a participating lender, not directly through Housing Australia. The scheme can be used alongside the Tasmanian FHOG if you are buying a new home.
Should You Use the First Home Super Saver Scheme?
The First Home Super Saver Scheme lets you make voluntary contributions into your superannuation and later withdraw up to $50,000 toward your deposit. Concessional contributions are taxed at 15% rather than your marginal rate, which can speed up your savings if you are on a higher income.
In our experience, buyers who earn a stable salary and have a few years to save benefit most from the FHSS. You need to obtain a determination from the ATO before signing a contract, and the funds must be released before settlement. Timing matters, because the determination process can take several weeks.
If you are planning to purchase within the next 12 months and have not yet started contributing, the scheme may still be useful but will not replace your entire deposit. It works in conjunction with other savings, not as a standalone solution. Speak with a financial adviser or accountant before making contributions, as the tax treatment depends on your individual circumstances.
How Do Lenders Assess Your Savings?
Lenders classify savings as either genuine or non-genuine. Genuine savings are funds you have held in your own name for at least three months, built up through regular income. Non-genuine savings include gifts, windfalls, or funds that appear suddenly in your account.
Most lenders require at least 5% genuine savings when you apply with a low deposit. If you are using a gift from family, some lenders will accept this but may still require evidence of at least some genuine savings alongside the gift. The policy varies between lenders, and first home buyer eligibility depends on meeting the specific lender's criteria.
A buyer in Newstead recently applied with a 5% deposit made up of $15,000 in genuine savings and a $10,000 gift from parents. The lender accepted the combination but required a signed gift letter and bank statements showing the donor's account. The buyer also provided three months of statements showing the genuine savings portion. The application was approved under the 5% Deposit Scheme, and the loan settled without LMI.
Where Should You Keep Your Savings While You Build the Deposit?
Keep your deposit in an account that earns interest but remains accessible. A high-interest savings account or term deposit works for most buyers. Avoid holding your deposit in offset accounts linked to other loans, as lenders may question whether those funds are genuinely yours or are being used to reduce interest on another person's debt.
Lenders will ask for statements covering at least three months, and they will review every transaction. Large deposits, unexplained transfers, or frequent cash withdrawals can delay your application. Keep your savings activity clear and consistent, and avoid moving funds between multiple accounts in the weeks before you apply.
If you are saving with a partner, decide early whether the deposit will be held jointly or in one name. Joint savings simplify the application, but if one person has irregular income or existing debts, holding the deposit separately and structuring the home loan application carefully may give you a better outcome.
What Happens After You Reach Your Savings Goal?
Once you have saved your deposit and set aside funds for settlement costs, the next step is to apply for pre-approval. Pre-approval confirms how much you can borrow and gives you confidence when making an offer. It also shows sellers and agents that you are a serious buyer, which can make a difference in areas like Trevallyn or Norwood where properties move quickly.
Pre-approval is not a guarantee, but it is based on a full assessment of your income, expenses, and credit history. Lenders will ask for payslips, tax returns, bank statements, and details of any existing debts. If your circumstances change between pre-approval and settlement, such as a job change or new credit card, let your broker know immediately.
After pre-approval, you can make an offer with certainty. Your solicitor or conveyancer will handle the contract, and your lender will order a valuation. If the valuation matches or exceeds the purchase price, the loan moves to final approval and then settlement. The entire process from offer to settlement typically takes four to eight weeks, depending on the property type and lender.
Call one of our team or book an appointment at a time that works for you. We work with buyers across Launceston and can help you access the schemes and home loan options that match your deposit and goals.
Frequently Asked Questions
How much deposit do I need to buy a home in Launceston?
Most buyers save either 5% or 10% of the purchase price. A 5% deposit lets you access the Australian Government 5% Deposit Scheme, which removes the need for Lenders Mortgage Insurance. You will still need to budget for settlement costs on top of the deposit.
Can I use a gift from family as part of my deposit?
Yes, many lenders accept gifted funds, but most still require you to show at least some genuine savings that you have built up over three months. The lender will ask for a signed gift letter and bank statements from the person giving you the money.
What government support is available for first home buyers in Tasmania?
From 1 July 2026, eligible buyers receive a $20,000 First Home Owner Grant when purchasing or building a new home. The Australian Government 5% Deposit Scheme is also available with a price cap of $700,000 for Launceston and other regional centres.
What is the First Home Super Saver Scheme and should I use it?
The FHSS lets you make voluntary super contributions and withdraw up to $50,000 toward your deposit. Concessional contributions are taxed at 15% rather than your marginal rate. It works in conjunction with other savings and is most useful for buyers who have a few years to save.
What counts as genuine savings when applying for a home loan?
Genuine savings are funds you have held in your own name for at least three months, built up through regular income. Lenders prefer to see consistent deposits rather than large lump sums that appear suddenly in your account.
