Apply Online
Contact Us
Hejaz Financial Services
Schedule a call
Apply Online
  • Superannuation
  • Investing
  • Finance
  • About us
  • Contact us
  • Learning centre
Hejaz Financial Services

Save for a home deposit

Book an appointment

The dream of owning a home often seems far off, we are here to bring it closer

Welcome

Saving for a first home is tough. You’ve cut back, skipped dinners out with friends, and put up with being labeled stingy by your mates.

But with a median apartment in Sydney now fetching over $600,000, you’ll probably need to come up with $120,000 for a 20 percent deposit, not to mention the myriad costs associated with buying property. That’s a big ask, even for the best savers amongst us.

Flat wages and the ballooning costs of essentials such as rent and electricity have only made this task more difficult.

So, what can you do? While there’s no substitute for sticking to a well-crafted savings plan, there are several ways you can put your money to work by investing it as you continue to save.

Savings accounts no longer cut it

Rates are at an all-time low, great for homebuyers who already have their home deposit saved up. The downside of low rates is for the savers who (at best) only get a sad 1 percent to 2 percent a year on their interest savings accounts and term deposits. So, while the low rates make paying off a home loan easier, savers don’t get the same benefits.

How much deposit do I need for a home loan?

This really depends on where you want to live and if you’re buying an apartment or a house.

Most lenders require a 20 percent deposit to secure a home loan and avoid the lenders mortgage insurance fee. So, on a $600,000 loan, you’d need about $120,000. It’s no small feat accumulating this amount of money.

The good news is you don’t have to lump all your money into a savings account. A lot of people are turning to invest to accelerate the time it takes to save up for a deposit.

Investing for a home deposit

First – if your plan is to buy a home in one or two years then a capital stable investment should be considered.

However, if your timeframe for buying a home is longer, say over three years or more, then 90 percent of the time you are likely to do better by investing in a diversified fund.

A recent analysis shows that in the last 5 years, people who invested in the Australian share market over the same period made total returns of 9 percent.

However, the average cash return (i.e. the interest rates your bank gives you) for people who left their money in a savings account has only been 2 percent.

If you invest $10,000 and make regular monthly $1,000 contributions over five years at a growth rate of 7 percent, your final balance could be $86,187.

Compare this with an interest rate of 2 percent (slightly more than what you’d get from most banks) and your final balance is $74,098.

Think long-term

If you want to invest your savings to accelerate your journey towards a home deposit, you need to be prepared to do it for three or more years. Less than this and the risk of losing money is too high. It’s also not long enough to see the effects of the compound returns.

Saving for a house deposit can feel like a long slog but your efforts will be worth it.

There is no guaranteed way of immediately growing your savings, but smart investing could help you reach your house deposit milestone faster. Remember the tortoise wins the race.

How we can help

At Hejaz, we can offer you a range of investment products ranging from capital stable investments to diversified investment options.

Please keep in mind that investments are not suitable for everyone and their circumstances, we highly recommend you to schedule a call with our wealth advisers to see if investing is suitable for you.

Islamic investment options

At Hejaz, we think in decades, not days – and we believe your super should, too. Our investment options allow you to invest for tomorrow, today.

Global Ethical Balanced Fund

Our flagship investment option. The Balanced option is for those looking for a diversified portfolio with exposure to global stocks and Islamic mortgage-backed investments.

Learn more
Global Ethical Balanced Fund Asset Allocation

Cash & Compliant Income (Ethical Income Fund) 48%

International Equities 36.4%

Australian Equities  15.6%

Where we do not invest

Ethical Income Fund

Our world-leading Islamic income fund. Designed to help generate a steady income stream while maintaining the highest Islamic investment standards. Assets held include Sharia-compliant income structures and mortgages.

Learn more

Join us

Ready to sign up? Join online in under 10 minutes.

Sign up today

Want to talk finance?

Get Started
Hejaz Financial Services
1300 043 529
[email protected]

Products & Services

Islamic Super
Global Ethical Fund
Ethical Income Fund
Islamic Finance
Islamic Pension

Help & Support

Contact us
Apply online
Login
Documents & forms
Book an appointment

Licencing

ABN: 44 161 857 478 ACN: 161 857 478 Authorised Rep of InterPrac Financial Planning Pty Ltd (AFSL 246638). Australian Credit Licence 480542. Tax agent number 25214708.

Hejaz Financial Services © 2020 / All Rights Reserved

Legal Notices
Privacy Policy
Refer a Friend
F.A.Q
Contact Us
Apply Online
Call us: 1300 043 529