Saving for house deposit

[pinkflower223]

Hi there looking for advice, me and my partner are 21 and 23 with a 10 month old and are currently renting, the plan is to save over the next couple of years, we have a few thousand saved but not loads, we really don’t want to be trapped in the renting cycle forever and our mortgage more than likely monthly payments will be cheaper than what we are currently paying, the plan is to save 10% to start with, would people recommend more? Of course with the added fees we will need to take into account, the average house prices where we live is around £170-200k for a 2-3 bed.

Save as much as you can. Open a cash LISA each and save into them. You will get a 25% top up from the government contributions up to £4000 a year so your 4K becomes 5K before you even add any interest. There are several still offering around 4.5% interest for the first year.

I'd save the maximum you can afford. Transfer it into a LISA on the day after your salaries come in. You can always take a little back if you have a domestic emergency - failed boiler etc.

You can’t take money out of a LISA once it is deposited except when you buy a house under 450k or you retire or are terminally ill. Any other reason you pay a hefty penalty.

Get yourselves LISAs before the end of this tax year and put in as much as you can afford up to £4k each.

Continue to add to them next year.

Read up on mortgages, fees etc. Moneysavingexpert.com has a good FTB guide.

10% + fees is a good start and your mortgage rate might be a bit lower if your LTV is under 90%. Aiming for more than that will mean you're paying rent longer and the houses you are looking at might be getting more expensive. Or prices might drop, who knows.

Also think about other impacts on your budget eg loss of income or if you have another DC. You need to still be able to afford your mortgage whatever happens.

Open a LISA quickly. They could close LISA's at any time.

Thanks everyone for that, have opened a Lisa now!

Correct, and given the OPs reason for saving and the amount she intends to spend on a house purchase it is absolutely the right thing for her circumstances.

Oh yes, LISAs are wonderful. My DS managed to save 42k in a Stocks and Shares LISA and used it to complete last week. However, a previous poster was suggesting you can use it like a rainy day fund and borrow money back:

Quote "I'd save the maximum you can afford. Transfer it into a LISA on the day after your salaries come in. You can always take a little back if you have a domestic emergency - failed boiler etc."

My DD also has a LISA. They are great for saving towards a first home.

Go through your budgets with a fine tooth comb to work out how much you can save comfortably and how much you can save if you make bigger lifestyle changes. Set up a regular saver to move money into savings at the start of the month. At the end of each month move any surplus into another account for savings.
First direct currently offer £175 for switching to their current account and offer a 7% regular saver up to £300. There are other banks that offer money for switching and regular savers take a look on comparison sites
When we were saving for our first house we kept a monthly spreadsheet with the amount you have in savings. It was helpful to see it slowly increasing was motivating.