Deciding how to save for a mortgage is no mean feat, and many first time buyers feel it’s harder than ever to climb the property ladder. Mortgages require serious cash, with standard deposits ranging between 5 and 20% for a six-figure property. We’re not about to tell you that you can save that by cancelling your Netflix subscription. However, a mix of financial planning, careful expenses, and lifestyle changes delivers the best path to affording your dream first home.
Learn How to Save for a Mortgage by Finding the Right Deal
Lenders want to lend, so if you work closely with the right mortgage broker, you can find some affordable first time buyer mortgages. Finding the best mortgage reveals an important first step on your journey to homeownership. Once you know how much it will cost, in terms of deposit and other fees, you know exactly how much you need to save. Make the most of mortgage calculators, and do your research- if you’re reading this, you’re on the right track.
Decide Your Funding and Saving Strategy
When you’ve found the right mortgage, you just need to get a deposit together. Simple as that, right? Well, for people lucky enough to inherit enough for a deposit, it might seem so. If that’s not the case for you, it might still be worth seeing if your parents have the resources to contribute or lend you anything along your journey. If not, you might be able to cut the required deposit in half by moving in with a partner or some friends. Once you know what you have to save, then you should also find a savings account with a great interest rate and new-joiner benefits.
Set a Budget to Decide How to Save for a Mortgage
Setting a budget for each month teaches you how to save for a mortgage. Work out how much you need to put aside, where you’re saving it, and budget what’s left. Budgeting depends on how much you’re bringing in every month and your timeframe for when you want to move. Negotiating between these factors and a happy, fulfilling lifestyle helps you find the perfect savings plan.
Change Your Monthly Outgoings
We’ve already decided that cancelling a streaming subscription won’t magically create a deposit overnight. However, saving’s an uphill struggle if all your money leaves your account when your direct debits kick in. Switching subscriptions with free trials and negotiating your utility bills helps you save, budget, and plan how to save for a mortgage. Price comparison websites are your friend, optimising everything from car insurance to broadband bills. You’ll also reduce monthlies even further by switching to family plans or splitting group bills between friends.
Fiscal and Environmental Responsibility
In most cases, it’s possible to save for a deposit while still having a fulfilling life. Where saving isn’t enough of an incentive to change your lifestyle, certain choices might help you save the planet too. It might be as simple as walking or cycling instead of getting a taxi. It might be as in-depth as investing in better insulation to save more money on heating over time. Either way, spending smarter and consuming less creates fiscally and environmentally responsible budgeting.
Conclusions: How to Save For a Mortgage
Long-term thinking delivers the most effective route toward saving for a deposit. While selling your old clothes or cutting back on takeaways helps you save a few pounds here and there, slow and steady strategies just keep giving. Things like splitting your deposit, finding a side-hustle, and negotiating your bills pays off over time. Mixing different strategies, while spending enough to enjoy yourself, helps you stay on track and save for a mortgage.
The content of this post was accurate at the point of publication and is subject to change.