Saving up for a mortgage deposit can seem daunting, but there are plenty of things you can do that’ll not only help you reach your savings goals sooner but also your dream home.
Typically, you’ll need to save at least 5% of the property price but the higher the deposit, the better.
1. Stop Renting
Monthly rental payments can be expensive. If your family are willing to put you up for a few months, you could move back home. Not only will it be cheaper but it’s likely to give you the chance to boost your monthly savings.
2. Look for a cheaper room
If moving back home isn’t an option for you, you could look for a spare room to let. Living in a shared house is generally cheaper than renting a property on your own but remember to save some money instead of using it to socialise. Downsizing can also reduce costs.
3. Get a lodger
If you have a spare room and live alone, looking for a roommate is a great way to reduce your monthly payments. It’s important to check that your landlord’s happy for you to sub-let a room first though. You could also ask them to advertise the room and lower your rent in return.
Either way, you could have extra money each month that can go towards your mortgage deposit.
4. Cut back on luxuries
Cutting back on your morning takeaway coffee for a few months just to save a few extra pounds may be annoying but you might just be able to save a couple of hundred pounds. Look at your regular outgoings to see where your money’s going and consider cutting back on two or three areas.
5. Sort through your belongings
Not only could this provide you with some extra space but also some extra cash. As you go through each room, create three piles; keep, sell and bin. By rule of thumb, if you haven’t used or worn something in the past year, you probably won’t miss it.
6. Help to Buy scheme
Help to Buy is a government scheme that offers an equity loan on new build properties with just a 5% deposit. You’ve got to be over 18 and it must be used to buy your own home on a repayment basis.
7. A Lifetime ISA
The LISA is a tax-free scheme that allows you to save £4,000 a year and will reward you with a 25% bonus. It can be used on properties worth up to £450,000.
8. The bank of mum and dad
If your parents are willing to lend you some cash, borrowing could mean you’re able to buy your own home sooner than you had thought. You’ll need to discuss how much you want, how much you’ll pay back every month and any interest rates.
9. Open a savings account with a good interest rate
Picking a savings account with a good interest rate could help you reach your goal quicker. Compare regular savings accounts, instant access savings accounts, ISAs and bonds to find the best option for you.
So, while saving for a property may seem like a challenge, the key to saving for a mortgage is to start as soon as you can and save as much as you can.