What Are Your Options For Mortgage Deposits?

The average first-time buyer requires a 20% deposit to secure their home. This could be a difficult £20,000 for a £100,000.

Although it might be difficult to raise the money yourself, there are options.

You can find mortgages that require a smaller deposit, such as a 10 or 15% deposit. These mortgages are more expensive than others and will require you to shop around.

A few government programs are available to assist first-time buyers in getting on the property ladder.

This will help you determine the amount of your mortgage deposit if you look at the house prices in the area you are interested in buying.

What amount should you save?

Regular savings are more efficient than relying only on one-off, irregular sums.

Once you have an idea of the deposit amount you will need, you can start to plan how you will reach it.

It all depends on how much money you have available each month. You need to be realistic about what you can afford. A standing order can be a great way to save money for the day you get paid.

If you plan to purchase in three years and need £10,000, you will need to save approximately £265 per month. With good credit, you can easily get a £120,000.00 mortgage.

If you can only save £150 per month, you will reach your savings goal in just five years, instead of three.

It might seem like a long time, but it is better than trying too hard to save too much money and giving up.

Save for a deposit

Once you have an idea of how much you want to save, it is time to start thinking about where to save that money.

Perhaps you already have a bank account which allows you to set up a separate account for your financial goals or another savings account for this purpose.

You should consider how much interest you can earn on your savings if you plan to save for a long period of time.

It might be convenient to have an instant access savings account. They often have a lower interest rate and you might not need the money for several years. You might consider a long-term savings account that pays more interest.

If you are a first-time buyer, a Lifetime ISA can give you a 25% increase in your savings. The government will give you an additional £250 if you invest £1,000 in your Lifetime ISA. You would have £1,250 at tax year’s end.

Price comparison websites

Anyone looking for a savings account that suits their needs can use comparison websites as a starting point.

For further assistance, consult a mortgage repayment guide. You should also check your credit rating before applying for a mortgage.

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