How to Save Up a Mortgage Deposit

by Jon Dulin on July 3, 2013 · 8 comments

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Saving up for a house is one of the hardest things that you can do. Getting on the property ladder is no easy task and the toughest bit is saving enough money to put down a mortgage deposit. This can take years and years so the first tip is to be patient. But it is also vital to know that this is possible. People buy houses every day so you can do it. It is just a matter of saving really hard. (Check out my monthly mortgage payment calculator to make sure you can afford the home you are considering.)

But how do you start saving for a mortgage? Even if you have a decent income it can be hard to put something away, so you need to make a budget first of all.

Write down your income and your outgoings. Then see how much is left that you could put aside and put towards a mortgage deposit. An important point here is to not be over ambitious and think that you can save all of your non-essential money. You still need to get on with your life and you still need to enjoy yourself. To save some real cash you could cut down on treats like eating out, drinking and buying things like cars and holidays. If you can do this for a few months then you will certainly save a large amount of cash and to save enough for a mortgage. You just need to stick to your budget. This is not easy and you will be tempted to splash out for occasions such as birthdays and Christmas, but try to be a little bit less generous just for a while and you will get there.

Another great idea is to have a bank account that is dedicated to your deposit savings. As you see your funds rise you will be heartened and you will see that you are getting there.

And once you have your mortgage deposit ready you can make your big move and choose your dream home, or at least your next one. Indeed Online Plc is a company that makes the legal side of buying a house a breeze so they could help you once your funds are in place.

Final Thoughts

There will be times when you will be discouraged because the amount you need to save is so large. But keep your focus on your goal – buying the house – and you will get there before you know it.

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{ 8 comments… read them below or add one }

Pauline July 3, 2013 at 11:08 am

I did a lot of sacrifices to save up for a first house but was really motivated so it took less time than expected. I had a roommate to save on rent, a couple extra jobs, cut on going out, etc. and a year later it was enough to get my own house! This time should also be used to think about the house you want and avoid costly mistakes if you rush too fast.
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moneysma July 4, 2013 at 10:39 am

I bought too much of a house and luckily had a roommate to help me swing the monthly payment. Before I bought my house though, I saved money by moving back in with my parents for a few years. My “rent” payment was to help out around the house.

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John S @ Frugal Rules July 3, 2013 at 12:03 pm

These are some good tips. We made the mistake of not putting as much as we should’ve down on our house six years ago and are paying for it now. We’ll never be doing that again and will be saving like crazy for our next house.
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moneysma July 4, 2013 at 10:37 am

Good to hear you learned from your mistake. I let my realtor talk me into buying a bigger (pricier) house than I could comfortably afford. I’ve learned for the next time to stick to my guns.

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Digital Personal Finance July 3, 2013 at 8:01 pm

Best to focus ahead of time on saving for a house, and lower that mortgage payment that will be forthcoming. After all, debt is debt in some ways. I’d say the big thing is making sure that the mortgage that you’re saving for isn’t over the top and getting in the way of more important things, such as retirement.
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moneysma July 4, 2013 at 10:35 am

I agree about debt being debt. I dislike the argument of good debt vs bad debt. Yes, there are instances where you need to take out a loan to help finance things but you should make it a point to it down and to make sure you can still save money for the long-term in the process.

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Tushar @ Everything Finance July 4, 2013 at 1:29 am

If you want something bad enough, it will be easy to save up for. We started saving not long before we had enough because we tried really hard – we got side jobs and cut our expenses while saving up.
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moneysma July 4, 2013 at 10:34 am

That’s a great plan to kick start your savings and something many others should follow. Thanks for sharing!

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