How do I save a deposit for a house?

22 Jan 2014
Published in Guides
Views 2104

It may seem like an impossible task to save a deposit but you can do it if you follow this one simple guide. Read on...

Buying your dream home

It's so frustrating that paying rent is more expensive than paying mortgage repayments, but in this current economic climate banks are very picky when it comes to approving mortgages.

You can improve your chances by saving up a large deposit, but this is no easy feat. Although times are changing and some banks are willing to accept smaller deposits which is good news for us, it still works in our favour to have a big deposit ready.

It's never too early or too late to start saving for a deposit and we're going to share our tips with you.

Ultimately if you want to have a deposit to buy a property with, you are going to have to make cut backs and sacrifice on luxuries you may have become accustomed to, but as you see your deposit grow and your dreams of owning your own home becoming real, I guarantee it will be worth it.

Keep a money diary

Over the period of a month keep a diary of all your spending and don't leave anything out no matter how small the value. Doing this will not only highlight your biggest outgoings but will also show you your spending habits and just where your money is disappearing. The results might shock you.

Here's an example:

Monday - £40 weekly travel card, £2.50 Coffee, 30p Newspaper, 80p chewing gum, £4.20 Lunch, £35 Pub

How are my wages disappearing each month?

Once you have done this, work out what your biggest outgoings are and how much you spend on a typical week and then multiply by four to see what your total monthly outgoings are.

Rent 800
Food 300
Socialising 400
Bills 80
Miscellaneous 100

Most likely your rent will be your biggest outgoing but unfortunately you might not be able to do anything about it unless moving back in with your parents while you save is an option.

Work lunch

Look for ways in which you can reduce spending, if you buy lunch everyday and on average spend £5 each time then that equates to £100 a month. Why not try making your own lunch, this will not only be healthier but will also save you a fortune.

Designer coffee

Similarly if you buy a coffee each day from one of the many famous and infamous coffee shops that really adds up too! And why do you want to fund companies to refuse to pay their millions of pounds worth of tax in the UK?


You can significantly cut food costs by making a shopping list and planning meals in advance to save on ingredients. Get creative with left overs and design your very own signature dish. Cooking from scratch will save lots of pennies and learning how to cook is a great life skill.


We think it's important to have fun, so when cutting costs on socialising don't be too hard on yourself! Maybe it's time to stop buying expensive rounds for big groups of people that never buy you one back! Why not spend the odd night in with your friends; instead of drinking out, drink in!

Make a budget

By keeping a diary you will be able to see how much you spend and identify ways in which to cut spending. Although it is hard, try to remember that once you have saved enough for a securing a mortgage your repayments will be lower than what you would pay in rent. Regularly putting away money each month is a good way to discipline yourself in preparation for having a mortgage.

Now it's time to make a bugdet and it's important to stick with it. Don't be too hard on yourself, you need to be realistic and allow for some fun!

OutgoingsMonthly take home salary £1,500
Rent -800
Food -80
Bills -80
Socialising -200
Miscellaneous -40
Total left£300

So for example if you can save £300 per month that equates to £3,600 a year and at that rate you may only need to save for 3-4 years.

Left it too late to start saving?

Maybe if you started saving like this a few years ago you would have your deposit by now, that could be true and quite frustrating if it is but think to yourself, do you want to still be thinking the same thing 3-4 years in the future? I guess since you are reading this you do not so start now!

Sounds quite tough

In time this gets easier and you'll soon find more and more little ways to save your hard earned cash. Over the course of these years you may encounter pay rises, which will speed things up no end as long as you increase the amount you save more than the amount you spend. If you're in a couple make sure your other half does the same and you will be saving twice as fast.

Want some encouragement?

Type your info into our free neighbourhood discovery engine to find the kind of place that suits you the most, look at flat prices in these areas to get an idea of the sort of property you could be starting off in a few years from now if you start saving. Do it - challenge yourself to make the change you have wanted.

Related articles

Why saving is more important than salary

What are the different types of mortgages?

Become a property guardian and slash your rent!


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