With property prices rising, prospective buyers are exploring innovative and strategic ways to boost their savings and secure lower mortgage rates, including shared ownership and side hustles.
Saving for a mortgage deposit can feel daunting, but a clear plan makes the target easier to reach. MoneyHelper says most buyers should expect to put down at least 5% to 10% of the property price, while some lenders and guides point to deposits ranging as high as 20% depending on the loan and the home being bought. A larger deposit can also improve the mortgage offers available and may mean a lower interest rate, according to Royal Bank of Scotland.
A dedicated savings account can help keep the money ring-fenced. MoneyHelper and Lloyds Bank both recommend using a separate account for a deposit fund, while Royal Bank of Scotland suggests tracking progress with a savings goal tool. For some buyers, a lifetime ISA can add a government bonus to savings, although Help to Buy ISAs are only relevant if they were opened before the scheme closed.
Working out the target is just as important as building the habit. Halifax advises buyers to estimate the deposit they need based on the price of the home and the area they want to buy in, then use a mortgage calculator to see how much they may be able to borrow. That matters because lenders generally cap lending at about four to five times annual income, which can limit how far a buyer can stretch.
Budgeting is the next step. Lloyds Bank says buyers should track spending carefully and set a firm monthly savings target, while the HomeOwners Alliance advises treating the deposit goal like any other regular bill. The simplest way to free up cash is to review every outgoing, separate essentials from discretionary spending and decide how much can be saved without making day-to-day life unsustainable.
Housing costs often remain the biggest obstacle. Barclays says some buyers speed up their saving by cutting rent, including moving in with family or friends, while also looking at shared ownership as a lower-deposit route on to the property ladder. That approach allows a buyer to purchase a share of a home and pay rent on the rest, reducing the amount needed up front. For people whose income is not enough to support their target property, MoneyHelper and other lenders say the other option is to raise earnings through extra work or a side hustle, though investments carry more risk and should be treated carefully.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
