Although mortgages are cheaper than ever - thank the Reserve Bank for that - and property prices flat - take a bow, dear dollar - the banks aren't playing ball with what would be a government-guaranteed minimum 17 per cent interest on saving for a deposit.

A little-known Kevin Rudd legacy - its original, unnecessarily complicated condition would suit Antiques Roadshow - is paying 21 per cent a year.

Called a first home saver account it pays 17 per cent on top of the normal interest which, incidentally, is taxed at a flat 15 per cent, half the average tax rate. Thankfully, some lenders do offer it (listed at apra.gov.au), but only one in 10 first-home buyers take it up.

Yet ordinary savings accounts won't cut it in the deposit department. Even a term deposit at 5 per cent would have to go for 14 years for it to double, and that's ignoring tax. But save $6000 in a first home saver account and the government will put in $1020 gratis.

You'll get three more grants by saving $6000 for another three financial years. The grant is worth 17 per cent (but stops at $1020), which goes on to earn interest itself, and is on top of the 4.1 per cent you'd be earning on the highest home-saver account, from ME Bank. A couple can each have an account. The only catch is you must deposit at least $1000 a year in four separate years, otherwise you can't touch the money. Once you can, it must go on a first home or mortgage.

Too long to wait? There's a way around that, though, honestly, four years saving for a home is nothing, especially when prices are flat or falling. The secret is that the government works in financial years, and two of those straddle one ordinary year.

In fact, you can get three years' grants by only saving for two years and two days, as the Tax Office helpfully explains on its website. Just save $1000 on June 30 in year one, another $1000 the next day, then again a year later, and buy a place on the last day of that financial year.

That way, on the first day of the fourth year you'll own a place, which counts as saving and so you don't have to save the other $1000.

But remember, for the full hit of the best tax break in the country if you're under 60, you should save $6000 for each of the three years.

Commonwealth Bank says it pulled its offering on new accounts more than a year ago because customers found them complicated and inflexible, both fair criticisms. For any hand-out worth its salt you have to jump through hoops. But having to save for two years and using it as a deposit or to pay off some of the mortgage on a home is hardly an imposition, or am I sounding old? Lucy Hocking opened an account at ME Bank when she was 19 and at 24, has just used it as a deposit to buy a home with partner Ryan.

The couple saved about $60,000 with the handouts. They weren't fazed by waiting, but Lucy admits her Gen Y friends would think a year is a long time.

''Most are still renting and think buying is beyond them because they'll never be able to afford it,'' she says.

Lucy lived at home paying $50 rent a week to her parents, which made it much easier to save. Mind you, breaking up with a girlfriend or boyfriend would throw a spanner in the works, because you wouldn't be able to get to your money. It would eventually be tipped into super, untouchable for another 40 years.

Still, having snaffled up 5400 of the 8500 new accounts opened so far this year, ME Bank's group executive of sales, Ian Hendey, says it offers them because they ''motivate participants to develop a saving habit''. For a 21 per cent return anywhere else to save for a deposit, you're going to have to look at the sharemarket - and there's no way you'd call that risk-free.

The safest way of using the sharemarket is buying blue-chip stocks such as the banks. Because their dividends come with a 30 per cent tax break, the return is between 8 per cent and 10 per cent depending on the bank.

As long as the price doesn't go backwards, the return is twice that of a term deposit, though still only half the home-saver account. Then again, why worry about a deposit at all? For about $600 you can buy a deposit bond as long as you have a mortgage lined up, which you can use at multiple auctions since you only fill out the details if you buy.

The beauty is, you don't have to break into a term deposit or sell shares too early if the right place pops up suddenly.

Don't forget the first home-owners' grants from the states, which are not restricted to houses: NSW and Queensland will pay $15,000 for building or buying a new home. Victoria pays $7000 whether it's new or not. Neither NSW or Queensland provide grants for existing houses.

Guess you're wondering whether to buy now or wait.

In some areas, such as Enmore and Dural in Sydney or Docklands and Carlton in Melbourne, RP Data says buying a home is cheaper than renting.

How long is that likely to last? For as long as interest rates remain this low, which economists expect will be at least another year and probably two, though it should be said, they can change their minds quickly. Since you asked, the cheapest variable rate is 5.42 per cent, with no application or other fees, from loans.com.au.

The better question is whether buying a home will be the goldmine it was for baby boomers. Afraid not.

Home prices overshot in a debt-fuelled boom before the global financial crisis, and since unemployment is forecast by economists to worsen, it's unlikely home prices will grow in real terms for a long while.

Oddly enough, the straightest road may not be the best way to your dream home.

It's better to buy an investment unit first, says property expert Kevin Lee, the principal of Smart Property Adviser.

It's advice he gave to his own daughter, whose purchase is now paying for itself.

''Buy below your means so you don't send yourself broke and you'll have your first investment property if you want,'' he says.

Rent it straight away and the chances are it'll make some money for you at these low rates, which will help with saving for a deposit for something closer to the dream.

Or move in for a while, then sell it when prices rise.

And buying a two- or three-bedroom unit is probably better than a one-bedroomer, because you might be able to let out each room.

The best location to buy is a tradeoff between where you work and play. You don't want an inner-city unit if your family lives across town. Then again, maybe you do.

Somewhere close to transport, shops and parks, or beaches, will always have better growth prospects. And units have been doing better than houses.