At Newcastle Building Society, we know that saving for a deposit can be the most difficult part of buying your first home. So in this guide we'll help you to understand how much you need to save for your deposit, and share our tips to help get your saving started. We'll also explain some of the other costs of buying a home that you will need to factor into your budget.
How much deposit do I need to buy a house?
The amount of deposit that you will need to save to buy your first home will depend on the purchase price of the property that you wish to buy. The larger the deposit you have, the better your affordability will be, so the less of a risk you pose to mortgage lenders.
You are also likely to have a wider choice of mortgage deals available to you - take a look at our how much can I borrow? page for an explanation of how the amount of deposit you have will affect your mortgage affordability. You can also use our simple mortgage affordability calculator to get an idea of how much Newcastle Building Society may be willing to lend you.
There are many low deposit mortgages on the market that can help first time buyers to get on the property ladder more quickly. At Newcastle Building Society, we offer First Time Buyer mortgages that require a deposit of just 5% of the property purchase price - as an example, if you were hoping to buy a property for £115,000, you would need to have a minimum deposit of £5,750 saved to be eligible.
Saving for a deposit on your first home
Get rewarded for saving with our First Home Saver account and Help to Buy: ISA
At Newcastle Building Society, we have a number of savings accounts that can help first time buyers to save for the deposit on their first home.
Our First Home Saver account rewards first time buyers for saving with Newcastle Building Society by providing up to £1,000 cashback when you take out a mortgage with us. We also offer a Help to Buy: ISA as part of the Government's scheme to help first time buyers get on the property ladder, by giving savers a 25% bonus on their savings when the funds are used to buy their first home.
In addition to this, we also offer a Cash Lifetime ISA. Available for 18 to 39 year olds to open, a Lifetime ISA (LISA) enables you to save up to £4,000 tax-free each year, which is topped up by the Government’s 25% bonus, up to your 50th birthday.
Everyday tricks to help you save up for your deposit faster
It can be daunting to start saving for a first time buyer deposit, but it may also be easier than you think. Everyone has their own methods of saving money, but simply cutting back on some of your daily or weekly luxuries is an easy way of saving for a deposit more quickly.
In the table below are just some of our favourite indulgences, and how much you could save by giving them up for a while - and putting their costs towards your deposit instead:
|If you give up...
||You will save...
|Your weekday morning coffees
||£2.56 a day (based on a regular cappuccino)*
|10 cigarettes a day
||£4.50 a day (based on a pack of 20 at £9.00)
|5 pints of beer a week
||£3.50 per pint*
|2 bottles of wine a week
||£7.00 per bottle*
|Dining out once a week
||£25 (based on average three course meal for two at £50.00)*
|Going to the cinema once a week
||£10 per ticket*
*Source: Numbeo, 2017 - Cost of Living in United Kingdom