If youâve started considering your options with a view to saving up for a deposit on a mortgage for a new property of your own, then youâre bound to have realized just what a big commitment this is. For many individuals and families it takes years to get to the stage where they can put down the money to do this. But if you choose the right products then you stand to save both time and money in pursuit of your dream home. Here are some things to think about if you want to save up, so you can work out what the right way will be for you if youâre looking to build up your pot before you lay down your deposit.
Savings Options
If you save in a cash Isa then you will not only have the opportunity to earn a good rate of interest on your money, you will also be able to shelter any gains you make from income tax. You can save as much as £5,760 into a cash Isa. The rates on cash ISAs are not necessarily always the best available on the market, but they may be better than what youâll find through standard savings accounts after tax. With your Isa allowance you can also take advantage of tax-free interest. Alternatively you can set up a savings account with a view to saving for a mortgage deposit, enabling you to make sure you are putting money aside every month. However they often come with restrictions attached such as limits on annual withdrawals.
Where To Go
If you have a small lump sum already built up then you can get a better rate of interest by locking away your money for a year or longer. A fixed-term fixed-rate savings account could be a great place to store your lump sum so you can then use a cash Isa allowance or regular savings account for the remaining amount of the deposit that you have to accumulate. Ultimately you have to make the most out of every penny you have. The best way to do this is to avoid putting your deposit savings at risk, as you may find it will take you years to recover from any falls in the stock market, which could set back your plan to get on the property ladder. If you go to a building society like Saffron then you can find the right option for you and your needs. That way you can get on and start looking forward to moving into your own special place.
