Best way to save for a mortgage from scratch in 18 months!?

Terry6680

Good morning everyone,

So in a nutshell we have been given the opportunity to move back in with parents rent free for a short/medium term period to save up for a decent sized deposit for a mortgage. Obviously the quicker we can get there the better.

So I'm looking at being able to save approx. 2k per month in this new situation, I've opened up a Lifetime ISA for both myself and my wife, does anyone have any experience in using these LISA's and have successfully used these in pairs to apply for mortgages? I don't suppose the old trick of putting the max amount of 4k savings in March then same again in April still works as the government interest/bonus scheme is applied monthly rather than annually compared to the now expired ISA?

Any other methods or tricks of the trade to maximise our return to reach our goal of approx. 30k within 18 months would be appreciated?

DigForVictory

Do a Statement of Affairs (SoA) a little like this one, post it on the Debt Free Wannabe board & let the experts dissect your spending habits. You may be able to save even more than £2K/mo & still stay on good terms with your wife & your parents.

Best of luck!

Eco_Miser

Certainly make sure that you each have contributed the max to your LISAs before 5th April. After that, well the sooner the money is deposited, the longer it is earning interest.

For the rest of your money, Regular Savers generally offer the highest interest. See the dedicated thread for detail of the current best offers. When the RSs start maturing, you should consider fixed term accounts for the proceeds.

Having said that, it's your savings that will build to a deposit, the interest is just helping to preserve it's purchasing power while you save, so do everything to maximise your savings.

george4064

As others have said, you really need to look into detail how you can save more money rather than where to put that money.

20SmthngSver

Terry6680 wrote: »

Good morning everyone,
I don't suppose the old trick of putting the max amount of 4k savings in March then same again in April still works as the government interest/bonus scheme is applied monthly rather than annually compared to the now expired ISA?

No. If you wanted, you could put £4k in both accounts on April 5th and again on April 6th (two difference tax years), and you will get full bonuses applied. So that £16,000 over two days would become £20,000 by May/June time.

The bonus is not worked out monthly as such. They work from the 6th of one month to the 5th of the next to work out the bonus, as the tax year starts on the 6th April. Your provider will then apply the bonus from HMRC up to 5/6 weeks after the 5th of the month.

I used my LISA to buy a house with a few months ago for a solo mortgage. I had no issues. Beware your conveyancer will charge to obtain your funds on your behalf, so a double charge as it's you as well as your wife (two accounts).

They can charge £50 + VAT. Optional charge on their part but they all do it. Mine didn't tell me about it in 5 months and it appeared on my closing statement to them, so I challenged it saying that they'd never told me about it and it was a hidden charge. They denied it was a hidden charge but admitted they'd never informed me of the charge and that they would remove it from the closing statement. If yours never tell you about the charge, then you could do the same, as it's still money you hadn't accounted for having to pay.

MovingForwards

I pulled back on everything possible, no meals out, no clothes shopping (only buy when something has worn out), no coffees from Costa, cut right back on my food budget and buy own brand where I can, rarely any nights out with the girls and do free things instead.

It's not forever.