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25 May 2021

How To Save For a Mortgage Deposit - Tips To Help You Get A Home

Tired of paying for a house that isn't yours? Want to move out from your parents or council property into something that actually belongs to you and that you can make your own? 

Saving money for your mortgage deposit can be tough for many but these tips may help you towards getting a mortgage and your first home.

How Much Will I Need?

You will need at least 5% of the property value as your deposit with the bank lending you the rest via a mortgage. Use a website like Rightmove to view property prices in the area you are looking to buy and then try a mortgage calculator to see what you should be able to borrow. What you earn will obviously impact the the mortgage you can get and therefore the deposit size required. Make sure you take into consideration fees for valuations, surveys, stamp duty etc too as these can soon add up.

How Can I Save Money?

  • You may think that you already have a good deal with your bills but you still may be able to reduce your outgoings. Have a look on Money Saving Expert where you can find many ways to cut costs when it comes to your energy, broadband and mobile phone suppliers. You can also look at balance transfers for any cards you have and lower interest rates for any loans. 

  • Read through your bank statement and see where you may be overspending. Having regular takeaways? Opt for a fakeaway instead and meal plan throughout the week to reduce food waste and save financially. Make sure you cancel any subscriptions you no longer use or need and shop from your own wardrobe instead of buying new clothing frequently - less expenditure each month will give you more spare money to put away. Try to only purchase what is essential for the time being. 

  • For the things you do need to buy, there are many cashback sites which will offer money back on your purchases. You can use discount codes and loyalty cards to claim free items or to save the pennies, which soon turn into pounds. Survey sites can be useful to earn extra money too for a few moments spent answering questions.

  • Skimming your bank account is where you round your account down to an even number and it is a great way to save little and often, usually without notice. You can do it manually or use apps like Plum to do it for you that move funds to a locked pot - perfect to pop away towards that deposit.

  • When was the last time you looked up in the loft or cleared out your closet? Selling what you no longer need or use is a great way to make additional money whilst clearing out the clutter in the process ready to move. If you've not worn something for a year, taking into consideration the current impact from Covid also, then it's time to get rid. Not only is there eBay and Facebook Marketplace to list your items, there are also apps like Vinted, Depop and Shpock to advertise your items for sale.

  • Set up a standing order, just after pay day, to move money from your wages straight into your savings account and then budget with what's left for the rest of the month. You will soon adapt and with the money going out, like a bill each month, it won't be long until have a nice amount built up. At the end of the month, if there is anything left in your bank account before payday, you can transfer that into your savings too before getting paid. Don't forget to add any loose change or notes from your wallet/purse into a savings tin as well.

Do you own your own home? Do you have any tips to add to the list?

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