Getting a mortgage deposit together for your first home isn't easy, but don’t give up. While a 2015 study revealed that UK homeowners now save for an average of 24 years to afford their first property, we believe that a good saving strategy plan can make all the difference. With this in mind, we've put together 5 mortgage deposit saving tips designed to help you get your deposit together sooner rather than later.
When calculating how much you’ll need to get on the property ladder, you should include your deposit andassociated purchase costs – think legal fees, moving costs, etc. Once you have an idea of the amount you’ll need to save, you’ll be able to put together the savings plan that works best for you. Try a savings calculator to get a better idea of how long it will take for you to save your deposit.
Compare savings accounts and cash ISAs to make sure you’re getting most from your existing savings. Cash ISAs are great for those just starting to save. Interest earned in all ISAs is tax-free, and the savings allowance for the 2015/16 tax year is £15,240. Savings accounts can be a good way of putting money aside each month, but it’s important to keep an eye on rates of interest. Don’t be afraid to switch accounts if you find a better rate.
There are hundreds of savings accounts and cash ISA deals available, and some come with restrictions that could prevent you from making the most out of your nest egg, so do your research to make sure you get the best possible deal and make the most out of every penny you save.
You can compare savings accounts and cash ISA deals from all providers with Which? Money Compare Tables.
Launched in December 2015, the government’s Help to Buy ISA works in a similar way to a standard ISA, but the government will pay £50 for every £200 an individual saves in the account. They are designed to give first-time buyers a cash boost when saving for a mortgage deposit up to a maximum contribution by the government of £3,000 per person.
Note: Help to Buy ISAs are treated like standard ISAs, so you are only permitted to pay into one per tax year, up to an annual ISA allowance of £15,240.
If you’re really serious about saving, take a closer look at your day-to-day spending habits and see if there are any unnecessary expenses you can cut out. Small savings soon add up. If you’re in the habit of buying a pre-packed sandwich every day for £3.00, consider making a packed lunch instead – you could save up to £780 in just one year. Even if you cut back just one day a week, you’d still make savings of £156.00!
Getting a mortgage deposit together isn’t straightforward, but if you stay focused on the end goal and continuously monitor your incomings and outgoings, you’ll get the money together in no time. Revisit your numbers every month, put up a wall chat – do whatever it takes to stay focused. Good luck!
At Weale and Hitchen, we’ve been helping people get on the property ladder for 25 years. So, if you’re looking for your first home, you’ll be in safe hands with us. Contact your local office today. You can find Weale & Hitchen branches in Bury, Holcombe Brook, Ramsbottom, Harwood and Rawtenstall. Our new website includes a virtual map of our various locations, alongside full addresses and contact details. So if you fancy popping in sometime soon, you’ll know exactly where to find us. We look forward to hearing from you!
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