5 Tips to help you save for a house deposit faster
As a first-time buyer, one of the biggest struggles can be having to save for a house deposit. While there are many options out there, most mortgage lenders require a minimum of 10% as a deposit. Although according to the Money Advice Service, the average first-time buyer actually puts down 20%. The fact is, the more you can save for a house deposit, the better rates you’re likely to get for your mortgage. So how can you save as much as possible, as fast as possible? Here are our top tips:
1) Set savings goals
This will really help to keep you on track - not to mention, give you a better idea of how much mortgage you can afford! Firstly, work out how much you want to save in total for your deposit and then, look at your income and expenses and work out a realistic amount that you can save towards your deposit each month. Having specific figures in mind like this will help to motivate you – and it will also give you a clear idea of how long it will take you to save the whole amount.
2) Open a savings account or ISA
This may sound obvious – but we’ve come across lots of people who try to keep savings in their normal bank account. It never ends well! By opening a separate account for your savings, you’re much less likely to dip into them for other reasons – or accidentally spend your savings on your grocery shopping…
Another advantage of opening a savings account or ISA is that you’ll usually get a higher rate of interest on your savings. Every penny counts, after all! We'd recommend looking into Help to Buy ISA's, where the government rewards you for your savings.
3) Set up a standing order
By treating your savings like any other monthly payment, you’re much more likely to stick to your goal. Set up a standing order to take your savings out of your current account and into your savings account as quickly as possible after pay day, so there’s no temptation to spend it.
4) Look for ways to reduce your spending
Regularly reviewing your outgoings is a great habit to get into. Use a comparison website such as Which? Switch to get the most competitive deals on bills like your gas, electricity and car insurance.
You might also find that you have regular payments or subscriptions to services that you’re no longer really using and can cancel. Any extra money can go towards your deposit and help you to get your target amount faster.
5) Have a clear out!
If you’re planning to buy a new home, then it’s a good time to declutter – and you may be surprised by how much you can add to your savings just by selling your old and unwanted stuff!
Lastly, don’t forget to speak to a mortgage broker. Here at BB Mortgages, we can help you to find a mortgage that’s best for your specific circumstances – and deposit size. We’ve helped hundreds of first-time buyers to move into their first home with the minimum of stress – and we’d love to help you too.