The deposit co-op: A new way to save for a home

My wife and I are in our 70s. We worked hard for decades to pay off our home. We have three grown children, and we know firsthand how difficult it is for young families to scrape together a house deposit. Right now, our daughter and her two little ones are living with us – and while we love having them, we can’t help feeling that every family deserves the security of their own home.

I’ve thought deeply about this, and I’d like to share an idea that might help.

For most Australians, saving a house deposit feels impossible. Bank interest rates on savings accounts hover around 1–2%, far behind property prices. Lotteries offer a dream but swallow your money with odds in the millions. And after the banking royal commission, trust in financial institutions remains shaky.

What if there was a different way – a product that gives you a genuine shot at a home deposit without risking a cent of your own money?

The core concept

Imagine a pool of people – say 110,000 – each depositing $2,000. That’s $220 million in total. Instead of sitting idle, the money is lent out as mortgages at around 5% interest. The interest earned – $11 million a year – doesn’t go to shareholders. Instead, it funds 110 prizes of $100,000 each, paid directly toward a house deposit for the winners.

Here’s the critical difference from a lottery: you never lose your $2,000. Your principal stays yours, available to withdraw at any time. If you never win, you simply take your money back. The only thing you forgo is the small amount of interest you might have earned in a standard savings account.

Designed for fairness and choice

The model lets you choose your level of participation. You can open up to three accounts, effectively multiplying your chances. With one account, your annual chance of winning is about 1 in 1,000. With three accounts, it’s roughly 1 in 333. Over 40 years of saving, that grows to better than 1 in 8 – and still, your original deposit is always there if you need it.

The scheme also taps into an existing Australian tradition: the Baby Bonus. New parents can choose to place their child’s $2,000 payment into the pool. If the child wins before turning 21, the $100,000 is banked and earns interest until they’re ready to buy a home. Those who prefer a standard savings account can opt out. It’s not a mandate.

A self-funding, perpetual machine

Because the original capital is never spent, the fund keeps generating interest forever. Even if no new members join, 110 families every year – or more, if the pool grows – would receive a life-changing deposit. Scale it up to 1.1 million participants, and you’re helping over a thousand families a year.

Crucially, this isn’t a charity. It’s a cooperative financial product that could be run by a mutual bank, a credit union, or even a community trust. The numbers work because the underlying mortgages produce a steady, predictable income stream.

Why now?

The banking royal commission exposed a deep flaw in how financial products are designed: too often, they serve the bank’s bottom line, not the customer’s wellbeing. A product like this flips that script. It’s transparent, low-risk, and directly addresses one of the biggest economic anxieties of our time – the inability to afford a home.

It also offers banks a genuine way to rebuild trust. Imagine a major bank announcing that every year, hundreds of ordinary Australians get a $100,000 deposit simply because they chose to save with them. That’s the kind of story that money can’t buy.

The next step

This idea has already received positive feedback from early conversations. The next step is to find the right partner, a customer-owned bank, a community housing provider, or a forward-thinking council, to pilot the concept.

If you’re interested in helping turn this into reality, or simply want to know more, let’s talk. The model is fully costed, the logic is sound, and the need has never been greater.