Saving up a deposit is one of the biggest problems that a first time buyer will face. Luckily 95% mortgage in Northern Ireland are on the rise with the majority of high street lenders now offering them providing you meet their criteria. For those who can’t save up the 5% required Co-ownership may provide a no deposit option.
It’s important to remember that the best rates on todays market are reserved for those with the largest deposits as they will represent less of a risk to the lender. The really competitive will start kicking in around the 25% mark so whatever your situation this should be your ultimate goal.
There is no great secret to saving a deposit, start saving as much as you can as soon as you can. Set a long term target and work out month by month how much you will need to save in order to get there.
Remember it’s not just a deposit you will need, you also need to budget for the other associated costs of buying a house.
The average cost of a home in Northern Ireland currently stands at £118,000 ( Belfast Telegraph 20/07/2016 ), the minimum 5% deposit on this home would equate to £5,900 and to secure one of the best deals with a 25% deposit you would require £29,500. It’s a huge difference so it’s no wonder 95% mortgages are proving more popular in Northern Ireland.
Help to Buy ISA – For those who are eligible the governments Help to Buy ISA will undoubtedly provide a combination of both the best security and return on your savings. The government will top up your savings by 25% providing you have saved the minimum £1,600. The bonus will only be paid when you buy a property and the maximum you can save in any given month will be £200.
Regular Savings Account – If you are not eligible for a help to buy ISA a regular savings account may be more suitable over a shorter term say 1 year.
A savings account will generally require you to save between 2 set amounts each month eg between £25 – £300 for say a 12 month term during which you will usually not be permitted to make withdrawals. These savings accounts generally offer a better rate of return as you are agreeing to lock your cash in for a set period of time.
Cash ISA’s – Cash ISA’s are a great place to save as the interest you receive will be tax free, because of this however you will be limited to how much you can pay in per year. Currently 06/11/2016 you will be allowed to pay in up to £5,760 per annum between April – April.
If you are in any doubt as to where to save, how much you will need or just want some professional guidance contact us today, we will assess your circumstances and search the mortgage market to find the most suitable product available from a comprehensive range of lenders and we will never charge you a fee for our services.