Why it's so hard to buy your first home -even with record-low interest rates

Interest rates have never been lower, meaning that with enough toil and thrift it should be dead easy to pay off a mortgage.

Yet home prices across Australia have gone through the roof and, for most, the dream of purchasing is increasingly elusive.

According to comparison site Finder, aspiring owners need a six-figure deposit just to get their foot in the door.

Eleven per cent of them would need more than a decade to scrape together the required amount, a survey of 1028 first-time buyers found.

The dream of many residents of owing property in NSW (pictured) is becoming unattainable due to house prices

A six-figure deposit has become almost a basic requirement to purchase property in Australia, despite low interest rates (stock image)

The latest ABS data shows the average deposit to secure a mortgage is a whopping $106,743 – 16 per cent more than what was needed two years ago.

Unsurprisingly, NSW is the most expensive market, with the average first home loan of almost $514,000 attracting a deposit of up to $128,000.

In Sydney, that swells to $260,000 based on a median price of $1.3million, a figure that’s jumped more than $100,000 in the past three months.

‘Prospective buyers are being stumped by a supercharged property market, which isn’t showing any signs of slowing down,’ Finder loans spokeswoman Sarah Megginson said.

‘Low interest rates have made it cheaper to pay down a mortgage but this has pushed up property prices, making it even harder to save for a deposit,’ she added.

Almost two in five first home buyers take up to five years to save. A quarter of them take up to 10 years. In the meantime, prices continue to increase.

For almost a third, the ‘bank of mum and dad’ is the solution. Finder’s researchers calculate that Australian parents have lent $29 billion to their adult kids to invest in bricks and mortar in the past 12 months.

Despite the serious financial commitment, though, there are more first home buyers getting into the market than there have been in nearly a decade.

‘In our book alone about 16 per cent of new lending is going to first home buyers,’ National Australia Bank CEO Ross McEwan told Sydney’s 2GB radio last week.

Many new home buyers have to resort to the ‘bank of mum and dad’ to secure loans (stock image)

Numbers at house auctions (pictured) continue to soar in capital cities across Australia

‘First home buyers with low interest rates are finding it cheaper to actually buy, as long as they have got a deposit…than it is to rent.’

Ms Megginson said government grants could help some fast-track ownership dreams.

As part of the federal government’s First Home Loan Deposit Scheme, eligible buyers can secure a mortgage with a five per cent deposit.

State governments have also discounted stamp duty for entry-level homes and offered grants for new builds, while interest rates are at historic lows.

But none of that is of much use without accumulating the necessary deposit.