With mortgage lenders potentially asking for relatively large sums to secure a loan, saving for a deposit can feel like a daunting task.
According to the Guardian, it takes 37 months on average to save a 10% deposit on the average UK property. If that sounds like a frighteningly long time already, remember that the best deals you might find when comparing mortgages are currently only available to those with 30% or even 40% to put down.
And also keep in mind that you have to keep some money behind to cover the cost to move house which is something that many people often overlook until it is too late.
The good news is there are plenty of things you can do to avoid living with your parents beyond the time you’re ready to move on. There’s lots of research you’ll need to do which you save, but whether you decide to go for a fixed rate mortgage, or a tracker, here are our tips for getting your deposit ready as quickly as possible.
Even if you’re single, buying your first property with a sibling or trusted friend could help you onto the ladder much more quickly. For joint buyers, the average age for buying their first property is 31, whereas for those going it alone it’s 40. Not got anyone to go in with? You could buy a house with help from the Housing Association. This lets you buy a proportion of a house, with a lower deposit and more affordable monthly repayments. To find out more, visit the Direct Gov website.
Save little and often
Start by setting up a standing order into a high-interest savings account. Even if you can only commit to a tiny amount each month, every little helps. Then find ways to squirrel extra bits of money away. Ditching the morning coffee can save over £300 per year if you were spending £1.50 a day. Making your own packed lunch can save £5 per day – the better part of a thousand pounds a year. And that’s just the beginning. Try seeing how much you can save by walking or cycling to work, or watch DVDs at home instead of going to the cinema. Saving might take a little effort, but it will be well worth it.
Boost your income
If you’re saving every penny and it’s still not enough, think about ways you could boost your income. If overtime at work is not an option, what about a second job for weekends or evenings? Remember, short term pain will equal long term gain. There are things you could do that aren’t even that taxing – for example, there’s a wealth of direct selling opportunities available to do from home.
Make the most of your nest egg
Finally, when you’ve built up a reasonable pot of money, finding the best place to keep it is key. Putting your nest egg in an ISA can be a great idea – they’re tax free, low risk and offer the best interest rates. Alternatively, there are even savings accounts aimed at first time buyers which offer a cash-back reward if you get your mortgage from the same provider – though they may not offer the best interest rates.
Your home may be repossessed if you do not keep up repayments on your mortgage