As house prices continue to rise year on year, first time buyers may wonder how they will ever get on the housing ladder.
Saving to buy your first property can be daunting – but having a clear and realistic plan can make it feel much more achievable. The first step is to work out how much you need to save.
Your deposit is by far the biggest thing you’ll be saving towards. It will usually need to cover at least 5% of the cost of the property, with a bank or building society lending you a mortgage to cover the rest.
Generally, the less you earn, the smaller the mortgage you’ll be offered – meaning you may need a bigger deposit than 5% to buy the property you want. If you buy with someone else, you’ll be able to apply for a larger mortgage, and potentially build up a bigger deposit.
5 tips for saving for a mortgage deposit
- Reduce your outgoing bills
- Cut down on your everyday expenses
- Consider using a savings or budgeting app
- Assess your current living situation
- Apply for the Help to Save scheme
Make the most of your savings
Saving is only the first step – making these savings work for you is the next step.
To make the most of your savings, choose a savings account that offers a high interest rate. These will usually be fixed savings accounts or ISAs, where you can’t withdraw money from during a fixed period.
If you go for an ISA with a fixed term, make sure it lines up with your moving timeline so you can access the money for the deposit when you need it.
We can’t offer financial advice, so speak to an impartial financial adviser for more tips on making the most of your savings. Pymm & Co Estate Agents in Norwich do recommend Broadland Consultants who are independent mortgage advisors based in Aylsham.
Price comparison websites
Comparison websites are a good starting point for anyone trying to find a savings account tailored to their needs.
Popular websites for comparing savings accounts, include:
Remember:
Comparison websites won’t all give you the same results, so make sure you use more than one site before making a decision.
It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.
