BELFAST CITY CENTRE: 028 9013 7392 | EAST BELFAST OFFICE: 028 9560 9410 | ORMEAU ROAD, BELFAST: 028 9521 9349 | LISBURN RD BELFAST: 028 9521 9351 | DROMORE: 028 9210 6060 | LISBURN: 028 9279 4300 | ARMAGH: 028 3743 0770 | LURGAN: 028 3898 4004 | DUNGANNON: 028 8747 0270 | COOKSTOWN: 028 8673 1055  | COALISLAND: 075 6180 7334

Contact Your Local Branch
BELFAST, CITY CENTRE: 028 9013 7392
BELFAST, EAST OFFICE: 028 9560 9410
BELFAST, ORMEAU ROAD: 028 9521 9349
BELFAST, LISBURN ROAD: 028 9521 9351
DROMORE: 028 9210 6060
LISBURN: 028 9279 4300
ARMAGH: 028 3743 0770
LURGAN: 028 3898 4004
COOKSTOWN: 028 8673 1055
DUNGANNON: 028 8747 0270
COALISLAND: 075 6180 7334

Saving Money for a Mortgage Down Payment

by | Jan 17, 2024 | Uncategorized | 0 comments

Hey there future homeowner. Are you dreaming of getting the keys to your own place but feel a bit overwhelmed about saving up for that first big chunk of change – the mortgage deposit? You’re not alone. Securing mortgages on Ormeau Road in Belfast can be a straightforward process, especially with the help of experienced local financial advisors. But here’s the good news: it’s more about being savvy with your savings than pinching every penny.

In this friendly guide, we’re going to break down everything about mortgage deposits and show you how to build up that fund quicker than you might think. Let’s roll up our sleeves and dive into the world of smart saving, shall we?

How Much to Save for Your Deposit

Okay, let’s talk numbers. When you’re getting a mortgage, the lender usually wants a little security and that’s where your deposit comes in. It’s like your first big investment in your new home. Most of the time, this means coughing up some cash, though occasionally, you might be able to use other assets.

Here’s the deal in the UK: most people are looking at a deposit around 10% of their home’s price. So, if you’ve set your sights on a £300,000 house, you’re aiming to save £30,000 for a 10% deposit. But wait, there’s more…some mortgages are cool with a smaller deposit, like 5%, which would be £15,000 for that same house.

Now, if you’re thinking about a Buy-to-Let mortgage, it’s a whole different ball game. Because these are a bit riskier for lenders (thanks to the ups and downs of rental income), they usually ask for a bigger deposit, often around 25%. You can of course discuss your personal circumstances with how much you can afford with our brokers here at The Mortgage Clinic where they can discuss mortgages on Ormeau Road in Belfast with you.

Why a Hefty Deposit Can Be Your Best Friend

You might be wondering, “What’s the deal with making a bigger deposit? Is it really worth it?” Absolutely, and here’s why: the bigger your deposit, the less you need to borrow. It’s like putting down a larger bet on your future home – it shows lenders you’re serious and reduces their risk.

So, what counts as a ‘big deposit’? In the world of residential mortgages, a hefty deposit usually means 25% or more of the property’s value. Let’s say your dream house is £300,000; a 25% deposit would be a cool £75,000. Sounds like a lot, but it can really work in your favour.

Navigating Mortgage Lending

Now, let’s chat about ‘mortgage risk.’ Lenders are a bit like cautious sailors; they know there are risks in the mortgage sea. They understand life can throw us curve balls and our financial situation might change. If, for some reason, you can’t keep up with payments, the lender might have to take back the house to get their money back. Usually, this means selling the property at auction, often for less than it’s worth.

Your deposit is like a life jacket here. It creates a safety buffer, so if the house sells for less, the lender doesn’t lose out as much. The bigger your deposit, the more secure the lender feels – and that’s a good thing for you.

More Than Just Peace of Mind

Putting down a larger deposit doesn’t just make your lender happy; it’s got some sweet perks for you too. First off, it lowers the amount you need to borrow, which can mean smaller monthly payments or a shorter mortgage term. That’s more money in your pocket in the long run.

Plus, a substantial deposit opens up more options. You might be able to consider higher-priced properties since you’re not stretching your budget to the max with a smaller deposit.

Finding competitive rates for mortgages on Ormeau Road in Belfast is easier than ever, thanks to a range of online tools and local financial services such as ourselves here at The Mortgage Clinic.

Making That Deposit a Reality

So, you’re probably thinking, “How on earth do I start saving up for this deposit?” Don’t worry, it’s not as scary as it sounds, especially if you have a bit of disposable income each month. That’s your golden ticket – the money you can set aside for your future home.

Budgeting

Let’s talk about budgeting. It’s not just about tracking your expenses; it’s about finding those little goldmines in your monthly spending. Maybe it’s that gym membership you never use or those streaming services you forgot you had. By getting rid of those extra subscriptions you don’t utilise as much as you think you do, you can boost your deposit savings big time. And hey, looking for cheaper options for things like insurance or cutting down on those shopping sprees can make a huge difference.

Declutter and Profit

You know all that stuff cluttering up your space? Those old gadgets, clothes you never wear, maybe even an extra car? They could be your secret weapon in boosting your deposit fund. Selling things you don’t need can give your savings a nice bump. Plus, it feels great to declutter. Think like Marie Kondo’s famous phrase? Keep only those things that speak to your heart. Then take the plunge and discard all the rest.

Cash Gifts: A Helping Hand

Got a generous family? If they’re willing to chip in towards your deposit, that’s a fantastic boost. It’s pretty common for parents to help out, and it can be a win-win – you get closer to your dream home, and they get to see you happy (and maybe out of their basement).

Maximising Your Savings

Now, once you’ve got your budget in check, sold some stuff, and maybe got a cash boost from your family, it’s time to make that money grow. Think about ISAs, savings accounts, or investment accounts.

Expert Mortgage Advice for the Win

Before you rush to your bank for a mortgage, remember this: shopping around is key. A mortgage broker can be your best ally in finding the perfect mortgage for your situation and the deposit you’ve worked so hard to save.

At The Mortgage Clinic, we’re all about helping you navigate these waters, offering mortgage advice. We’re here to help you find the best deal Mortgages on Ormeau Road in Belfast, no strings attached.

Ready to take the next step? Reach out to us at The Mortgage Clinic and let’s get you set up for a no-obligation mortgage consultation. Your dream home might be closer than you think.

Helmut Elstner

Managing Director – Independent Mortgage Broker and Insurance Advisor

Helmut started working in financial services in early 2012 and founded The Mortgage Clinic in Belfast in early 2015. He specialises in all types of mortgages from First Time Buyer, Co-ownership, Self Build, Home Movers, Remortgages, Debt consolidation, to Buy to Let.

Three Best Rated Winner 2021
Winner Mortgage Broker of the year 2020
Top Rated Advisor 2021 on Vouchedfor