iriemade Skip to Content

Saving for a Mortgage Deposit: How to Go About It

Renting can be great for many of us. It gives you the freedom to easily move between properties without fully committing to one in particular. If you’re considering a significant move or want to head away travelling, renting could be ideal for you! However, if you’re settling down and want to have your own space that you can genuinely call your own, it’s time to consider buying your own place. When you buy your own property, you will be paying money into an asset that you’ll eventually own, rather than paying for someone else’s house for them. Plus, you don’t have to worry about your contract coming to an end and your landlord asking you to leave, as they’re selling or moving someone they know into the property. Of course, buying is expensive. What’s more? You’ll need a significant deposit to lay down on the property before you’ll be approved for a mortgage for it. To help you save this sum, here are a few tips and tricks.

Clear Any Outstanding Debt First

Before you start saving for your deposit, you first need to clear any outstanding debt you may have. At the end of the day, you need to have a clear slate to save from. You don’t want to waste money on interest payments that could be going into your mortgage savings pot.

Use a Mortgage Calculator

Next, you need to know how much you need to save. This is where mortgage calculators come in useful. When you use a mortgage calculator, it will take your income and essential outgoings into account. It will then determine what is a reasonable mortgage amount that you’re likely to be approved for. There are plenty available online and the majority are free to use.

Saving the Deposit

Once you’re debt-free and have your goal, it’s time to start saving. There are a number of ways that you can do this, but the steps below should help.

  • Open a LISA – a LISA, or lifetime ISA, is a high-interest savings account that will help you to save your mortgage deposit as best possible. This account has a high interest rate in exchange for you building up the money in the account without withdrawing. Most have terms and conditions that incur fines or fees for withdrawing for any reason other than buying a property. So, make sure you’re 100% certain that this is the purpose of your savings before signing up.
  • Earn Money Online – there are countless ways to earn extra money around your salary online. You can use this reference for ideas to make money online here. Whether you sell a few items on eBay, start freelancing or start up a full blown Ecommerce store, make sure to put the profit into your savings pot.
  • Request Overtime – some workplaces allow for overtime. So, if you can, put some requests in and work extra hours where you can. This will boost your disposable income and see your savings jump in value.

Of course, there are other ways to get your journey to your own house off to a good start. But the advice provided above is a pretty safe bet!

Pin It on Pinterest