Best type of savings for house deposit?

sparkscw

I'm getting my house deposit back on track and hope to have a house within a year. At present my deposit has just been in a standard bank account where my loan repayments also came out of. The loan is now going to be paid off and I feel I should be doing something better with the money but not really sure what?!

I don't want it to be stuck away for any length of time as I hope to be buying a house within the next year.

Once loan is paid off I will be left with just £1500, however I have £5000 of stuff for sale at the moment and a further £10,000 in assets that may well get sold if I find the right house before saving it up... I'll also be saving approx £800 a month.

Does an ISA sound best? I read that these only pay interest yearly though?

guitarman001

Unfortunately the house isn't yours until it's all paid off.

Check out First Direct 8%.
HSBC 6%.
Lloyds Vantage
Some ISAs

sparkscw

guitarman001 wrote: »

Unfortunately the house isn't yours until it's all paid off.

Sorry I think I was a bit confusing with my post.

I don't have a house, I'm saving a house deposit. I had a car loan which I'm just about to clear the balance (£5400) once that's cleared I wanted to put the rest of my savings into a higher interest account whilst saving the remainder of the house deposit.

Hope that makes more sense :beer:

Doshwaster

sparkscw wrote: »

Does an ISA sound best? I read that these only pay interest yearly though?

Most ISAs only pay interest annually but it's calculated on a daily basis so if you money is only there for 9 months you'll get 9 months interest paid.

calypso_rhapsody

The best return you can get on £1000 is to open a Halifax reward current account and a high paying instant access account (eg Santander Esaver 5 at 3.2%) and cycle that £1k in an out of the Halifax each month - just leaved it in the Halifax for one day . You will earn the equivalent of £75 gross on that £1000 in a year from Halifax plus £32 gross (well almost) in Santander.

The regular savers may be worth investigating but the FD one certainly requires you to hold the money in the account for the 12 months so if you think you may be buying a house in less than 12 months then it would not be suitable.

ISAs could work - you'd need an instant access one if you plan ot buy within the year. Compare the rate v Santander's 3.2% (that's 2.56% net of BR tax).

Don't forget legal costs when doing your budget for the house purchase .. maybe you'll need more than a year to save up that deposit plus fees?

sparkscw

I've allowed for fees, only looking at about £130k max for a house as I want something to do up (I'm in the trade and have lots of contacts!) so by 10% deposit we're looking at £13,000 plus a couple grand for legals, although my mum works for an estate agents with in house solicitors so the fees are a bit cheaper than normal, I think £2000 is a bit on the safe side. My target is £15,000 at the minute anyway. Easy enough if I sell everything, but I'm trying to avoid selling my beloved 350Z ;-)

I'm now officially debt free :beer: need to get this stuff sold and then I'll be half way to the house again, am going to try to avoid selling the car if I can, I can probably save the rest in 6-8 months without selling the car if I'm patient!!!

So ISA's don't seem to be the best account for this. I don't quite understand what you're getting at though calypso??