Managing to secure a mortgage isn’t just about proving you can afford to repay it each month. You’ll need to have at least 5% of the deposit saved up – more if you want the lowest rates. But with house prices increasing, even 5% can be a large amount.
So here are 8 ways you can boost the value of your deposit.Apply for a Help to Buy loan
If you’re buying a new build home, you can apply for a Help to Buy loan of up to 20% of the property value. The first five years are interest free, and after that a yearly fee kicks in. You don’t even need to be a first time buyer to take advantage of this scheme, but you do need to have a 5% deposit saved up, and the house you’re buying must be your only home.Increase your options with a Help to Buy mortgage
Alternatively you can apply for a Help to Buy mortgage, where the government guarantees the mortgage lender 15% of the property price if you default. Again you’ll need a
5% deposit yourself.Save in a Help to Buy ISA
This new way of saving will launch in the autumn. You’ll be able to save a maximum of £200 a month into the ISA. Once you reach £12,000 (or before) you’ll be able to get a 25% return tax-free. So if you save the maximum amount, it’s a bonus of £3,000.Shared ownership
This scheme lets you buy part of a property and pay rent on the rest, bringing down the size of the deposit you need. Priority is given to anyone who currently rents a council or housing association property, though each local authority will have different conditions.Buy with someone else
It doesn’t have to be a partner or family member. Buying with friends can mean you can all save up quicker to get the required deposit. Just make sure you talk about what happens if one of you wants to sell their share.Buy somewhere cheaper
You might find your dream location is just too expensive. If you can find a cheaper property, you’ll either be able to buy it sooner with the deposit you already have, or keep saving for a little longer to get a better mortgage deal.Maximise your interest
If you’re saving the maximum amount in the Help to Buy ISA, make sure the rest of the money you save isn’t just sitting in your bank account. There’s a lot of competition among current accounts right now, meaning it’s possible to get as much as 5% interest on your savings. There are restrictions with these, so make sure you read the Ts and Cs.Don’t forget the other costs
Even if you are able to boost the size of your deposit, don’t stop saving. You’ll need to make sure you can afford mortgage fees, Stamp Duty, moving costs and day to day maintenance of your new home.