Saving for your dream home

Buying a house can be daunting, but it’s not impossible if you set yourself long-term, realistic savings goals

 Buying a home is one of the biggest decisions you’ll make in your life. It’s also one of the most expensive.

That’s why it’s never too early to start saving up for your dream home.

You don’t need a fortune to start saving. You can start small and build up. You only need £1 to open some savings accounts and Cash ISAs.

When you buy a home, you need to make sure you have money for:

• a deposit for your mortgage
• surveyors’ fees
• solicitors’ or conveyancers’ fees
• removal costs
• any repairs

When you add to this the fact that house prices are rapidly rising, buying a home can seem quite daunting.

But it doesn’t have to be. If you set yourself long-term, realistic savings goals, there’s no reason you can’t start climbing the property ladder.

Ways of saving for your dream home

There are lots of different types of savings account which can help you to start saving towards your home.

Instant access savings accounts are good if you want to start saving but think you might still need to take money out of your account from time to time.

You can open some instant access savings accounts with as little as £1, pay in as much as you can afford when you can afford it, or arrange to make a regular payment into your account, perhaps once a month on pay day. 

Fixed term savings accounts are designed for long-term savings goals, so are perfect for saving up for a big investment like a house.

They’ll give you a better interest rate than an instant access savings account, though you won’t be able to take money out of your account for a fixed period. 

There are two main types of fixed term savings accounts:

Term Deposit

Get a fixed interest rate for a set period of time from 6 months to 4 years with a Term Deposit savings account. This means you’ll know exactly how much you’ll make on your savings and when you’ll be getting it.

Tracker Bond

A Tracker Bond can get great variable interest rates that are set at a fixed amount above the Bank of England base rate. If the base rate changes, so does your interest rate. If the base rate is high, then you can make a really good return on your investment.

Saving with an ISA

Individual Savings Accounts (ISAs) are another great way to invest your money.

Although you can only save up to a limited amount – which is set by the Government each year – you won’t have to pay tax on any interest you make, which means you’ll be making the most out of your money.

Your ISA savings could add up to the deposit on a house, or cover your solicitors’ and surveyors’ fees.

However much or little money you have to spare, investing it wisely now means that, one day, your dream home could become reality. 

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