Saving for a house

PeterJames123

Hi Guys,

Im 27 and got married 2 years ago. As house prices were stupidly high I have been living at home and saving. I now have £8500 in premium Bonds, £20k in a Barclays saving account and My wife has 3700k.

We really want to move out in August next year but want to make as much money as we can with the savings we have. Can anybody suggest a plan to get the most out of it? We are also saving around £900 a month.

My plan was to open 2 eCash ISA with scottish widows(4.6%) and put £3600 each in giving us around £440 in April.
And also taking the Premium bonds money along with my savings and put it into Alliance and Leicester eSaver which has a interest rate of 4.8%

Does this seem like the best option?

Thank you ever so much
James.

chesky369

How much does your wife actually have - can't quite see what you've put being correct.

Baldur

PeterJames123 wrote: »

My plan was to open 2 eCash ISA with scottish widows(4.6%) and put £3600 each in giving us around £440 in April.

As per loaner's comment, this makes no sense if you mean April 2009.

£3,600 @ 4.6% for 4 months would earn interest of about £54.37, so a total of £108.74 for both accounts by April.

paul5046

1.£900 should go into a regular saver. 7% should be attainable.
2.Use up your ISA allowance and fix it.

wheresmydoshat

those rates seem fine, tho personally i wouldn't go with scottish widows as i had a bad experience with them.

tbh if you are saving £900 a month and want to move in about a years time, i'd just concentrate on getting most of what you've saved in one (safe) place which pays an above average rate.

but cash in your premium bonds asap, and use up cash isa allowances.

Blah99

I'm in a similar position to you - a no chain buyer waiting for the housing market to level out so I can buy in.

Contrary to other suggestions my recommendation is that you keep your cash in an easy access bank account, something like a Natwest eSaver. Everyone will immediately complain that the interest rates on these accounts are plummeting and that inflation is killing your savings, but you don't have to worry about that.

If like me you're not keeping this cash for anything other than a house purchase, inflation doesn't matter and low interest rates are a minor inconvenience. House prices are dropping my the minute, so your savings don't need to keep pace with anything. The critical thing is to NOT put your deposit savings in a fixed term account, because you can't be certain when house prices will level out. You need to be able to get access to this cash whenever you're ready to buy, and that's dependent on a) house prices levelling out, and b) you actually finding a house you want to buy.

Remember this approach is only true for your house deposit.