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How to save for a deposit

Saving for a deposit is often the biggest challenge first time buyers face in getting on the ladder. Most lenders require a minimum 10% deposit. Our guide helps you to work out how much deposit you will need and how to speed up your saving efforts to get that much needed deposit to buy your first home.

How to save for a deposit


Before you start to save for a deposit, make sure you know how much you can afford and therefore how much you need to save. Not sure where to start? Don’t worry see our guide How much can I afford?

It’s not a quick win and it involves sacrifice. But setting a budget and sticking to it is still one of the best ways to make sure you’re not spending more than you earn and identify possible savings. Take the time to sit down and work out where your money is going. Where can you cut back? Prioritise what you really can’t do without and what you may be able to sacrifice for 6 months. How much would this save you? Look at your insurance policies and utility bills and use comparison websites to see if you can get them cheaper.  It’s also a good idea to look at how to improve your credit rating 

See our range of calculators that can give you an indication of how much you can afford, how much the mortgage will cost you monthly and more

Make your savings work

Savings rates are at miserly lows so scour the market for the best deals and take advantage of ISAs if you can.

Reduce your rent

We all know the Catch-22: you can’t save for your own place because all your money goes into renting. If you want to break this cycle, chances are you’re going to have to compromise. Just 6-12 months of not renting and living on a budget could make a huge difference to your deposit. Here are some options:

Move back with Mum and Dad

While this won’t be a practical option for everyone, if your parents have the space, you get along and they are happy to have you then you’re really just throwing money away not staying with them for a short time. Before you do move in though, sit down and discuss what financial contribution you will make, how long you’ll stay and any other ground rules they may have.

Move in with friends

Perhaps you have a friend in a similar situation with a spare room. Why don’t you move in and halve both your rents?

Shared Houses

Getting a room in a shared house rather than renting on your own will be cheaper and give you the chance to save up. These houses can be very sociable, but can also try your patience. For one of our members, the best house share she ever did included a cleaner. Everyone split the bills and it meant the bathroom, kitchen and shared areas were always sparkly clean. No more weekends cleaning and because the costs were split they were still able to save. 

Get a Lodger

If you have a spare room yourself then this is a great way of cutting your rent. You will want to check with your landlord that this is acceptable. There are a number of websites that you can use to advertise your spare room.

Borrow from the bank of Mum and Dad

More and more people are relying on help from their parents to raise a deposit. Read out guide explaining how gifted deposits work and what you need to consider. There are also options for those parents who want to help but don’t want to hand over their savings. For example, some lenders may take into account parents taking out an additional charge over their own property.

 We’ve teamed up with fee-free mortgage broker, L&C, who can give you details of specific current deals.

Keep an eye out for new mortgage products

The mortgage market is constantly changing so make sure you regularly check our monthly update on best mortgage rates and the latest mortgage products. With lending restrictions much tighter than a few years ago lenders have had to become more innovative with their products to get viable customers through the door. From mates mortgages to 95% mortgages (with help from a wealthy relative) there are plenty of options.

Mortgage Finder

Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.

Find a mortgage

Consider getting help from the government

Over the last few years the government has launched (and re-launched) several schemes aimed at helping people buy a home. Help to Buy (2021-2023) allows first-time buyers to buy a new build with just a 5% deposit and from April, 2021, the Mortgage Guarantee Scheme allows you to get a mortgage with just a 5% deposit. The 95% mortgage scheme will run for 18 months until December 2022. With Help to Buy coming to an end, the House Builders Federation has also developed Deposit Unlock to offer 5% deposit mortgages to new build homebuyers.

To find out more about these and other government schemes check out our guide on how the government can help you buy a home

Ready to start looking at mortgages? We’ve partnered with the award winning L&C mortgage brokers. They’ll search the market to find you the best deal and won’t charge you a penny for their expert advice. 

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