For many aspiring homeowners, saving enough for a deposit can seem like a major obstacle, but even modest savings each month can make a big difference when it comes to buying a first home.
"Many first-time buyers think that they need to save an enormous deposit before they can even begin looking for a home, while others believe that it's silly to worry about a deposit when they hear that banks are offering loans of up to 108% of purchase price to new buyers. But both groups are wrong," says Stephen Whitcombe, MD of the FIRZT Property Group.
"According to the latest BetterBond figures, the average deposit requirement for first-time buyers to be approved for a home loan is currently R163 000, and the best way to achieve that goal is to start saving consistently, even if it's only a couple of hundred rand a month. Not only does a deposit reduce your borrowing costs, but it also demonstrates to lenders that you're financially disciplined, which can further strengthen your bond application."
This advice is particularly relevant in South Africa, where the household savings rate remains under pressure. According to the latest Reserve Bank figures, the household savings rate improved slightly to -1,3% of disposable income in the first quarter of 2026 from -1,4% in the previous quarter, but it remains in negative territory, indicating that many households are still spending more than they earn. Historically, South Africa's personal savings rate has averaged just 2,34% since 1960, highlighting how difficult it is for most families to build financial reserves.
At the same time, South Africans spend an average of 62% of their annual disposable income servicing debt, leaving just 38% available to cover everyday living expenses, savings and discretionary spending. "This makes setting money aside for a home deposit challenging, but still not impossible," says Whitcombe.
"The key is to make saving a priority rather than an afterthought. Even relatively small monthly contributions can accumulate surprisingly quickly, especially when they are placed in a dedicated savings or notice account where the money is less readily accessible for impulse spending.
"A deposit also delivers benefits that extend well beyond simply qualifying for a home loan. Buyers who can contribute a deposit reduce the amount they need to borrow, resulting in lower monthly repayments from the outset, and substantially less interest paid over the life of the loan. A deposit also definitely improves the likelihood of bond approval, particularly for first-time buyers with limited credit histories, and could even help them secure more favourable lending terms from the bank."
One of the easiest ways to start accumulating small savings is to stop spending on drinks and meals not made at home. Skipping the takeaway coffees, fast food lunches and delivered dinners can add up to a substantial amount each month that can be put towards your home deposit instead.
Subscription services are another area worth reviewing. Many households pay for multiple streaming platforms, television packages, gaming subscriptions or app services that are under-utilised. Cancelling even one or two can free up valuable monthly savings.
Motorists can also reduce fuel costs by combining errands with school runs, for example, or carpooling with work colleagues or making greater use of public transport. Even modest savings at the fuel pump each month can be redirected into a home deposit fund.
Entertainment spending is another opportunity. Replace expensive nights out on weekends or public holidays with more affordable social activities such as hosting friends at home or enjoying outdoor activities. This can significantly reduce monthly expenses without sacrificing quality of life.
Many people also underestimate the amount they spend on impulse purchases. Waiting 24 or 48 hours before buying any non-essential item often helps distinguish between genuine needs and momentary wants, allowing more money to remain in the savings account.
And finally, directing any unexpected income such as annual bonuses, tax refunds, salary increases or cash gifts straight into a dedicated deposit fund can accelerate progress without affecting day-to-day living expenses.
"Ideally, these savings should be placed into a notice account or other dedicated savings vehicle that requires advance notice before withdrawals can be made. Introducing this small barrier can reduce the temptation to dip into the fund for non-essential purchases while still allowing the money to earn interest," Whitcombe notes.
He also says that while saving for a deposit may take time, it often helps prospective buyers to develop the budgeting skills and financial discipline they need once they do become homeowners and have to plan for property taxes, insurance and maintenance costs in addition to their monthly bond repayments. "Indeed, every rand saved today is not only a step closer to unlocking the door to a first home, but also towards building long-term financial security through continuous property ownership."
