Zero to house-buying hero: how to save a mortgage deposit

Miss Thrifty38 February 13, 2017

how to save a mortgage deposit

This time 10 years ago, we were buying a house: our first home, in North Yorkshire. The floors were bare boards, the walls were covered in yellow vinyl wallpaper, and the gas and electricity were on pre-pay meters (on a frozen January night when all the newsagents were closed, I discovered this the hard way). The garden, used by the previous occupants as a landfill site, was devoid of lawn and covered in knee-high brambles.

We had saved a 10% mortgage deposit and bought our red-brick terrace at the top of the market, just before the credit crunch came whomping on house prices and equity. When we sold up two years ago to move to Greater Manchester, the house prices in the local area had just drifted their way back up to pre-crunch levels so despite all the home improvements, we made little on the sale.

Were these trials and tribulations? Pah! Not at all. They meant nothing: instead, I was (and am) grateful, relieved and rather amazed that we’d managed to claw our way onto the housing ladder in the first place.

As it turns out, our house-buying timing was beaut: a week after we moved in, banks began tightening lending requirements and pulling fixed-rate repayment deals left, right and centre. While we made little when we sold up, we had built up a good chunk of equity via mortgage payments and when possible, overpayments.

It was difficult enough to be buying a house back then; it’s even tougher now. The economy is looking dodge, mortgage lenders want would-be customers to walk through fire – and on top of it all, increases in the cost of living make the prospect of saving a mortgage deposit seem more daunting than ever.

Something I have learned, however, is that while the prospect of saving for a mortgage deposit can be daunting, the truth is that unless you are set on buying in London or somewhere else with crazy prices, it can be done. Drastic lifestyle changes, budget makeovers and the sourcing of extra streams of income may be required, but it can be done. In my case, we moved up north, where you could – and still do – get a lot more bang for your buck. I lived extremely frugally, to pack away as much of my salary as possible. I did a lot of eBay selling, reselling and more besides. We got there.

Gleeson Homes, a housebuilder with a strong base here in the North of England, approached me to make some short videos about my tips and ideas for saving for a deposit. It was an interesting company with which to collaborate: Gleeson specialises in low-cost homes for first-time buyers on modest incomes. In a Guardian profile, which you can read here, the chief executive describes the typical customers as “a Sheffield bus driver and his shopworker wife on a combined income of £34,000 a year.” (See what I mean about bang for your buck? Move north. Come join us!)

If you are currently saving for a mortgage deposit, or know somebody who is, you can find all six videos playlisted on my YouTube channel. I have copied partial transcriptions below. There are a number of tips here and, although they won’t all be suitable for everyone, there are plenty of tips to go around.


1. It’s all about mindset.

When you begin to save for your first house, you will be told that you need to save vast sums of money, that it’s going to take you forever, that you’re going to need to overhaul your lifestyle… Actually, that’s not always true. Thanks to homebuilder schemes and government assistance schemes, such as Help to Buy, the sums you need to save and the amount of time you need to save for can be less than you would expect. For example, it could take just 6 to 12 months to save the amount you need for that first deposit.

Attitude is all important. You need to fix that budget. Work out how much you intend to bring home every month on top of your regular pay packet. I’m of the opinion that if you are in full-time work, you should be able to bring home an extra £200 to £500 per month.


2. Cut those household expenses

If you are looking to slash your monthly outgoings, the quickest and easiest way to do this is to take a good look at your monthly household expenses: what you are spending on utility bills and what you are spending at the supermarket every month.

Every three months, have a look at the direct debits and standing orders that are coming out. Never let them auto-renew. When a contract nears its end, shop around, get a cheaper deal. I bet you will find something that is less money and more value.

Secondly, supermarket shopping. I’m a very careful shopper: I shop right at the end of the week on a Sunday, an hour before closing. That’s when you get the best whoopsies: those yellow stickers with the steep discounts. The discounts get steeper and steeper as the day comes to a close.

I shop from the bottom shelf where items are cheaper. When shopping for fresh produce, I look at the back of the shelf where the best-before dates tend to be far lengthier.

Finally, if you haven’t done so already, I would recommend that you invest in a slow-cooker. It’s a secret weapon if you are looking to save money on your household expenses. Firstly, it uses less electricity than the regular cooker. Secondly, you will get back home from work every day to a delicious cooked dinner ready and waiting for you. So, none of those expensive last minute dashes to the supermarket on your way back from work, or worse, takeaways.


3. Get over your FOMO

One of the easiest ways to haemorrhage cash is on lots of nights out with your friends. So you need to get over your FOMO (‘Fear of Missing Out’). What you will find, perhaps to your surprise, is that a lot of the time you aren’t really missing out on much at all! Instead, make a night out into a special occasion.

Secondly, gyms. Lots of us love going to the gym. But if you don’t feel that you are getting good value for money from your gym membership, consider one of the free alternatives instead: running, running apps, such as Couch to 5K, or my personal favorite, the Green Gym. This is where keep fit meets conservation projects around the UK: planting trees, sowing meadows and more. Apparently the Green Gym can burn up to a third more calories than an aerobics class.

Finally, holidays. We all love hot, sunny overseas holidays but, if the pound continues to flounder, there are cheaper options. Stay within the UK. This doesn’t have to mean camping or caravanning, if these aren’t your things. You can have a quirky adventure, such as barn hopping in the Lake District. For £10 a night, stay in a farmer’s barn: it’s an interesting way to tour that region. Or draw upon homestay networks, such as Airbnb. There’s an option out there for everyone.


4. Sell that clutter

If you are looking to make extra income on the side, purge your personal belongings and sell off your unwanted junk. However it’s a mistake to think that this process begins and ends with eBay. As wonderful as eBay is, I have found other great sites and apps out there, where I get good prices.

For books, CDs and DVDs, I use sites like Ziffit, webuybooks, and musicMagpie. Fashion? The app Depop is great for selling fashion items. If you have lots of supermarket and high street clothes, try selling them in job lots on local Facebook selling pages.

Don’t forget good old car boot sales. If it’s not car booting season, check out an app called Shpock, which stands for Shop in my Pocket. It’s a virtual car boot sale. You can advertise your belongings on there for free. And if you’re in the market for a bargain, it’s also a good place to go hunting.


5. Find your side hustle

Side hustle: making some extra cash on the side. A side hustle will help you reach your house saving deposit target faster. Side hustle is an American term. It means additional stream of income. So if you have several side hustles, you have several streams of income. So far so good, but do you know how to find a side hustle? How do you know which side hustle is right for you?

It’s simple. You need to draw upon your available time, your skills and your expertise. For example, there are sites out there like where people are seeking to purchase time, skills, expertise on a project basis or by the hour. Virtual PA, for example, bookkeeping, graphic design.

Another example of a side hustle is blogging. Blogging is my side hustle. That’s how I make my extra cash on the side, and it’s a great way to do it. If you need get started, but there are lots of free guides out there.

Finally, if you have found that by purging your belongings by selling your things online, that you have a knack for this and you have a knack for getting really good prices, why not make that your side hustle? You can pick up items at car boot sales and jumble sales for a fraction of the price for which you then sell them. There’s a side hustle out there for everybody.


6. Maximise those savings

Finally, if you are looking to to maximize your savings towards that deposit for your first home, there are some really good assistance schemes out there to help you get there faster. For example, the Help to Buy: Equity Loan. This is when you are buying a new-build home from a Help to Buy registered home builder and you have 5% of your deposit saved. The Government will contribute an additional 20%.

Another one is the Help to Buy: ISA. This is when you save the money for your deposit within a specific type of ISA account and the Government will top it up by 25%. As you can imagine, however, these schemes do come with lots of terms and conditions attached, so do check them out thoroughly online to ensure that you are eligible.

If you are saving to buy your first home: good luck. Keep saving, keep boosting those savings – and keep going. You will do it. 


The videos in this post were produced in collaboration with Gleeson Homes.

Did you enjoy this post?

Free Daily Digest

38 Responses to “Zero to house-buying hero: how to save a mortgage deposit

robin masshole mommy says:

My sister just went through this. It’s quite the process buying a house and they needed a BIG chunk of money to put down on their new home.

February 13, 2017 at 2:29 pm

Marcie says:

These are great! I live in Seattle where the housing market is crazy competitive and we definitely had to to budget in order to scrimp up enough for our down payment (the bidding wars are so expensive!)

February 13, 2017 at 4:59 pm

Jessi says:

It seems very different from buying here in the states. I didn’t have to put any money down to move into my house and got a really great interest rate on my loan.

February 13, 2017 at 6:13 pm

karen says:

These are all really helpful tips and guidelines – and love how you debunk a lot of “myths” with apps/websites to support the buying process. Its insane to save up a HUGE amount of money (not that this is always true, as you said), but budgeting and saving and making a plan is all part of the process.

February 13, 2017 at 6:32 pm

For a while there, it was pretty easy to buy a house. You didn’t really need a lot of money to put down on one, but after the economic crash of 2008, things got much tougher and it does take a good chunk of change to put down on a house now. Thanks for showing us how to do it.

February 13, 2017 at 6:37 pm

katriza says:

Such helpful tips! We were lucky enough to have my mother-in-law help us with this! For our second home, we hope to use some of these tips to save!

February 13, 2017 at 7:44 pm

These are great tips and your video accompaniments are perfect. I’m in the situation right now and I’m super focused on saving.

February 14, 2017 at 12:03 am

Logan says:

We went through the house buying process and after 2 people backed out of selling the houses we were trying to buy,we ended up just building. It is not an easy process.

February 14, 2017 at 2:57 am

Heather L. says:

Thankfully, it doesn’t look like we’ll have to go through this again, but you never know. I’ll keep this in mind for any friends who need it.

February 14, 2017 at 3:56 am

So much to know! I love how you broke it all down. I will definitely being saving this for the future.

February 14, 2017 at 4:04 am

In the states here – bought our house at the top of the market, in one of the highest market places in the US, and the market where we live has been bottomed out for years now. It’s slowly making it’s way back up. But slowly, as in molasses on a cold day. It’s awful. We are sort of stuck in this house unless we want to lose major money. It really sucks.

February 14, 2017 at 4:21 am

Debra says:

Buying a house can be so overwhelming and there is so much you need to know, this is great to help with that!

February 14, 2017 at 5:20 am

Ana says:

I’m not in a position to buy a house just quite yet. But I am really thankful for your tips as the fear of missing out always makes me spend money!

February 14, 2017 at 12:48 pm

Di Hickman says:

Great tips on saving money for a downpayment. It’s always amazing to me to see people complaining about living paycheck to paycheck yet they are eating out for lunches and getting starbucks every morning on the way to work. I will say when we left the UK in 2001 we had a house in Derby that we sold and wish we’d kept it. It is worth so much money now. But then we wouldn’t have had the deposit to buy the house in the USA.

February 14, 2017 at 6:16 pm

When my husband and I planned on saving for our first home I remember doing all the tips you suggested. It really does goes a long way to save for a common goal.

February 14, 2017 at 7:00 pm

I think everyone can use a bit of advise on how to save money! We are currenlty looking to buy a bigger home (in the next 2 years or so) and it is so daunting to think of having to save up 20% down payment….or more to be able to afford the mortgage!

February 14, 2017 at 9:05 pm

Belle says:

These are such great tips that everyone will definitely find helpful no matter where they live. I’ve been selling stuff in our house that we don’t use anymore and I’m actually surprise by how much I can get out of those. I mean, it’s not a lot, but still.. money is money.

Belle | One Awesome Momma

February 14, 2017 at 9:07 pm

Amber N says:

Getting rid of the clutter is something we are working on. You wouldn’t believe how great it feels to do that purge!

February 15, 2017 at 3:36 am

Kiwi says:

Great information. I am not in the market yet to get a home but this will be beneficial once I am ready.

February 15, 2017 at 7:08 am

Rojielyn says:

This is a useful blog.I learned something new and something different. thank you for the shared ideas.

February 15, 2017 at 12:27 pm

Reesa Lewandowski says:

These are great tips! Here in New Jersey, USA where I live we have the highest foreclosure rate in all of the country. We live in a 2 bedroom condo right now and would love to sell for something bigger but it makes us scared.

February 15, 2017 at 3:16 pm

Love this post! I’m already looking into help to buy schemes despite still being at uni.

February 15, 2017 at 8:01 pm

These are excellent tips! We cut down on all of our expenses to save up for our house and it was so worth it!

February 15, 2017 at 9:39 pm

Being able to save any money when buying a home can really be a blessing. These are great tips for new homeowners.

February 16, 2017 at 1:27 am

Brittany says:

My husband and I are about to make a huge move. We’re renting for a year then planning on buying a new house. I’ll definitely be using these tips.

February 16, 2017 at 10:37 pm

Rachel says:

Saving for a down payment can be so hard! It can feel like a lot of work but buying a house is a wonderful accomplishment!

February 17, 2017 at 3:50 am

Sarah says:

Great tips! We went with a 0% down VA loan for our first home, but we definitely want to have a substantial down payment for our forever home. It makes a huge difference!

February 17, 2017 at 8:00 pm

Annie says:

Thanks for this inspiration! So good to hear that it can be done 🙂

February 21, 2017 at 6:39 pm

Thanks for the great tips. My favourite one is to start a side hustle so I have started blogging and reselling on Amazon. The housing market is crazy but I think it should be possible to save for a deposit outside London and the South East.

February 27, 2017 at 9:35 pm

No 2. is my favourite. Cut household expenses. I plan on getting a mortgage within the next 24 months, and this was really a good insight into saving for one. Thanks.

February 28, 2017 at 5:34 pm

Anna P says:

Great tips whether you are saving for the deposit on your first home or not. We all tend to spend much more than we have to – my particular focus at the moment is cutting my supermarket bill. I have been way too dependent on ready meals and “luxury” foods for years but I’m discovering that I’m not such a bad cook after all (I’d just never really tried).

Now I practise recipes until I perfect them and am finding that my own food tastes much nicer than the ready-prepared stuff, and it’s cheaper and healthier. I’m even getting my teenage twins involved in the kitchen as they love to taste (and criticise!) each new dish but they also contribute ideas to make the food tastier. So, hopefully, they are developing their own cooking skills with an eye on being thrifty.

Keep up the great work on your side hustle – a frugal cooking guide could be my side hustle!

March 12, 2017 at 6:46 pm

Keeley says:

It was so much easier for me and my hubby, when we bought our first house, we didn’t a deposit! Good old Northern Rock let us have a mortgage without a deposit and we borrowed more than what we needed, to buy furniture! (No wonder they went down the pipe).

March 14, 2017 at 5:29 pm

Cassie says:

These are all great tips. It takes a plan that a family has to stick with despite neglecting activities that may have been eating away at your savings. Commit to the plan and in the end you’ll be happy you did.

March 23, 2017 at 3:09 am

Toni says:

Great post! Though house prices are crazy down in London, I’m sure these tips could certainly still help to make a dent in mortgage savings!

May 16, 2017 at 11:24 am

Jenny says:

I want to move my old house and looking for a new house in London. Right now I am focused on saving money for a down payment. So really thankful for your helpful videos and tips!!

June 6, 2017 at 10:47 am

Savvy says:

I am afraid of the crazy high prices. I prefer traveling to work a bit longer from the countryside, but having reasonable mortgage

June 9, 2017 at 11:18 am

Olly Cator says:

Love this post, you’re dead right about having a determined attitude towards growing funds and how important sticking to a budget is

July 14, 2017 at 8:57 pm

Leave a reply

Leave a Reply

Your email address will not be published. Required fields are marked *