Saving to buy your first home can feel daunting, but having a realistic plan makes it a lot more manageable! Your deposit is the biggest thing you’ll be saving for, but having a little bit extra will come in handy for those additional moving costs, such as valuation or conveyancing fees.
Before you pack up all of your worldly belongings, you’re going to have to think about saving money for a deposit on your first home.
That all depends on how big a mortgage you're looking for. Be sure you can afford it - home ownership is something to aspire to but it does take a big financial commitment.
You can also be thankful if you live in the north of England rather than London. Average house prices here mean a first-time buyer would need a 5% deposit of between £5,500 and £7,000 compared with £21-£24,000 in the capital.
You need to set a budget of how much you can set aside each month and a timeline for how long you want to save for. For example, could you save everything you need for a house deposit in a year? It’s a long time but gives you a clear goal and a focus for your plans.
Not necessarily. You can save for a house and still have a social life. You can even make it work to your overall financial benefit. Here are some questions to consider:
A regular savings account is probably the best option. In particular you'll want to explore Lifetime ISAs, specifically aimed at the first-time buyer. You have to be under 40 to open one. This ISA lets you save up to £4,000 every tax year, with the government adding a 25% bonus. Plus you earn interest which is tax-free.
A top tip is to set up a monthly standing order to pay into your savings account so you learn to treat it as another bill.
Pretty much. But as we’ve mentioned, saving for your first home deposit does take time.
Bear in mind there will be other costs on top of your deposit - mortgage fees, survey fees, lawyers' fees and stamp duty for starters.
Keep an eye on house prices in your area. And don't be afraid to seek professional help from a mortgage advisor or other financial expert. We’re here if you have any queries or you’d like to book an appointment. Or feel free to check out our article on questions every first time buyer should ask.