Getting your first foot on the property ladder is getting harder and harder! Especially when you’re paying through the nose for rent. Here’s our tips on saving up for that house deposit as a private renter.
How to save for a mortgage deposit while paying rent
Renting has become a go-to way to live for many people. Whilst it is easier to find a property to rent then it is to find a property to buy, especially when it comes to actually organising a mortgage, the cost of renting can almost be as high as the cost of paying out a mortgage each month.
Many people rent because they simply cannot raise a mortgage, others will rent before they buy a house with a partner, just so they can test out how it feels to be living together. Whilst renting is a great stepping stone to buying a house, it can make it extra hard to try and save money towards putting down a deposit for buying a home.
To help you to make that move, we have put together our top tips on how to save money for a mortgage deposit while you are paying rent.
Save smart
Saving money is the hardest part of putting together a deposit and you are going to want to make sure that you put your money into the smartest possible savings account. You want to find a savings account that is going to give you a good interest rate, which means that an ISA is one of the best options to consider.
Consider Lifetime ISAs, through which the government will top up your savings of up to a maximum of £4,000 a year with a further 25%. That means you could get up to £1,000 from the Government annually to help with your deposit.
Find out how you can get help with your deposit
The good news for those who are looking to buy their own house is that there are plenty of ways that you can try and get some help with your deposit. A help to buy scheme could be a consideration, which is a government scheme which is offered by lenders in order to buy a newly built properly.
There are other options to think about when it comes to your deposit is to see if your parents could lend you the money (although this isn’t always something that can happen). It is important to remember that taking out a loan to fund your mortgage deposit isn’t always feasible.
Be budget friendly
In order to save money to put down for a deposit on a property, one thing is for sure, you are going to need to get saving. In order to save money, you are going to need to find ways that you can cut back on what you spend on a regular basis. It can be hard to budget, however, if you do make the effort then in no time at all then you have some money put away.
To begin with, you are going to need to make a list of all the things that you spend out on during the month. Which of those things are something you cannot do without? Which are things that are a luxury? If there are things that you don’t “need” then cut back on them. It may be hard not to have them in your life, but if you think about it in the long-run then you are going to be looking forward to something much bigger and better.
It isn’t always easy to put together a deposit when you want to rent a property, however, it isn’t impossible. Take the time, make the effort and we can promise you that in the long run you will be able to enjoy your very own home.
