6 Ways to Save Money for your Mortgage Deposit

2021-02-18

Before we share how to save for a mortgage, it’s worth noting that becoming a first-time homebuyer is an exciting, freedom-enriching journey that everyone deserves to experience. It’s a big undertaking to prepare for a mortgage, but it is one that is well worth your time.

Overall, having the ability to make a place your home, and build your future life from, is the very reason why the team here at Which Mortgage have a genuine passion for what they do.

Saving money for a mortgage deposit is the ball you want to get rolling as early as possible. Some of our clients tell us that this leaves them feeling a bit overwhelmed. Don’t worry. There is more power in your pocket than you realise, and we’re here to help you.

Working smartly with your cash is not nearly as difficult as you may think. You’ll need to commit to your dream to own a home of your own and funnel as many savings as possible towards that. And our tips will give you all the motivation you need.

With that being said, below are some practical and easy ways you can start saving for your mortgage deposit and get that much closer to finally owning your dream home.

There are specific mortgage saver accounts offered by potential lenders. Subject to the rules these accounts can be very helpful in building your deposit by extra funds being added to your saved balance.

1. Start Early!

First and foremost, the most fundamental thing you can do to ensure you are fully ready to take on the next chapter of your life is to start saving as early as possible. You can then have the proper deposit for your mortgage on hand.

The sooner you begin saving, the more time you will have to build your wealth up enough to unlock home buying opportunities later on. It may be a hard pill to swallow if you want a home right now, but be patient and recognise that saving a little each day over the course of 2-3 years will be worth it.

For example, if you start saving €300 a month through various means, you will have €10,800 after 36 months.

2. Consolidate, Reduce, or Pay Off Outstanding Debts

Take a good hard look at your expenses each month. Do you have credit cards with high interest rates? If so, think about either paying them off to save on interest, or paying a bigger sum than the minimum amount each month.

If the balances are too high to completely settle right now, then the next best thing would be to consolidate them with a lower interest card/loan. Doing this can save you a lot of money each month. And you will be able to pay down your debts faster as more of that cash will be going to reducing the principal.

Plus, the more you pay down your debts, the higher your credit score will be. This, in turn, equates to you being subjected to better mortgage interest rates as well, making it a win-win on all fronts.

3. Set up Automatic Saving Deposits

The “out of sight, out of mind” scenario that comes into play here.

By creating a savings account and transferring a portion of your income from your checking account weekly or monthly, you will be able to proactively save money without having to remind yourself each day to move money around.

Automatic deposits make it much easier for you to refrain from spending that money on other things because it is in a different account than the one you typically use.

4. Avidly Track Your Spending

This one may sound like a no-brainer, but it is vital to your mortgage deposit saving success.

To start, don't change your spending habits just yet, but simply write down what your day-to-day looks like. Doing so will allow you to analyse what you are spending money on and then have the ability to refine it as necessary to save.

For instance, you may notice you are spending more money than you initially thought on non-essential items. This new information can then be used to reshape your habits and be more mindful of where your money is going so you can optimally save.

5. Reduce Your Monthly Utility Costs

Believe it or not, there is a good chance you are spending more than you need to each month on your utility bills.

To help you reduce your expenses, think about swapping out any outdated light bulbs with LEDs, switch to a programmable thermostat, invest in more energy-saving appliances and make it a point to unplug your electronics when not in use. Some of these may involve spending money (such as the LEDs), but the ROI you get in return makes it a valuable investment.

6. Consult with a Professional for Support

Lastly, if you are still feeling stuck and unsure where to go from here, the best thing you can do is consult with a professional for support.

We’d be delighted to help you. Our company has been built on a foundation of integrity, passion, and transparency. And has over 300 years of collective experience! Our team is more than happy to guide every step of the way to become 100% mortgage ready.

Small Steps Now Equal Favorable Results Later

There are several avenues you can take on right now to spearhead your deposit for mortgage saving goals.

By starting to save money a couple of years in advance, you may even have cash left over to splurge on some homely touches when all is said and done.

In the end, the takeaway here is that saving for a mortgage deposit is not as scary or out of reach as it may seem. As long as you do your due diligence to analyse your finances, be mindful of spending, and actively save where you can, then you can feel confident that you will be checking off 'becoming a new homebuyer' from your bucket list in no time.