The Best Ways to Save up for a Mortgage Deposit

If you want to buy a home, then you will normally need a mortgage and to get a mortgage you normally need a deposit. The amount that you need will depend on how much you are borrowing and the terms of the mortgage. However, it is very likely that you will need to save up for it. This can be a daunting prospect, especially as the amount that you will need to save will be likely to be more money than you have managed to save before. However, there are some things that you can try that will help you if you are wondering where to start or how to continue with savings.

Set up a Savings Account

It is a good idea to start by making sure that you have a savings account set up specifically for saving up money for your deposit. Make sure that it is an account that pays a reasonable interest rate, so that you can gain a bit of extra money without having to do anything. You may want to put the money in a notice account as this will pay more interest and it is likely that you will have some time that you give before drawing out. You may even want to choose an account where the money has to be tied up a for a period of time, such as a bond, if you have a long time to go until you need the money. However, you may also want some in an instant access account in case you need to did into your savings for an emergency. Also consider the fact that you can get paid a limited amount of interest per year before it is taxed, depending on your income tax level. Look into this and make sure that you get a tax free savings account if it benefits you with regards to tax, although most people will not need to consider this as they will not pay tax on savings interest anyway. So have a think about what will suit you the best.

Set up a Regular Transfer

It can be wise to set up a regular transfer into your savings account so that you do not forget to pay money into it. Having this go in just after you are paid is best, as you will have the money available to do it. Of course, you will need to work out how much you can afford to put into the account each month. It can be a good idea to do this by looking at previous bank statements in order to see what you normally have available to you and then setting up a transfer for that amount. You can always change it if the amount is not right, but it is good to set it up and get going with it as soon as possible. You might also need to try different things so that you can make more money available for saving,

Consider Ways to Earn More

It could be good to start with thinking about how you might be able to earn more money. There are the traditional ways such as trying to get a pay rise or promotion or seeing if you can earn more money in the job that you are doing but these may not be possible or you may already be doing these and not getting enough money. It is therefore worth seeing if there are any other things that you can try. Some people make money by selling items that they have and do not need anymore. This can raise a lump sum which can be popped in with the savings. Some people will find some little online jobs to do, which will earn small amounts of money that all add up and help, such as doing online surveys or freelance jobs. It could even be worth considering getting a second job, perhaps a weekend or evening job or making doing some temp work at times to get a bit of extra money. Every little bit can help out so even small extra earnings can be helpful.

Consider Ways to Spend Less

Spending less money can also be a big help. This can be easier for some people than others – it all depends how much they actually spend on things. For example, if you are only paying for things that are necessary, then you may not be able to cut down much, but if you buy a lot of luxuries then you could cut back on these. However, it can be even easier to spend less by comparing prices and paying less for the things that you do buy.