The 'We're saving for a deposit' thread

focus888

Hi everyone, sorry for gatecrashing your thread, im just wanted to ask if anyone is in the same situation as me. I only earn about 21k a year and i want to be able to buy a place for myself later on for about 200k. Im thinking about starting saving for a deposit but how much should i try and save for because even though i know there are mortgages out there for more than 3x your salary i feel like saving for 15-20k and then having a mortgage for £180k is so daunting. Should i aim to save more than this? how much more than this?

MrDT

focus888 wrote: »

Hi everyone, sorry for gatecrashing your thread, im just wanted to ask if anyone is in the same situation as me. I only earn about 21k a year and i want to be able to buy a place for myself later on for about 200k. Im thinking about starting saving for a deposit but how much should i try and save for because even though i know there are mortgages out there for more than 3x your salary i feel like saving for 15-20k and then having a mortgage for £180k is so daunting. Should i aim to save more than this? how much more than this?

I don't think you could borrow 8.6x earnings back in 2007, nevermind in the next ten years!

A max 3x mortgage multiplier isn't set in stone, but it's a good starting point in that it lets you have a life, protects you a little from rate increases etc. Lenders are a bit more risk averse these days, I expect you'll be paying for the 'luxury' of a higher multiplier.

There are some that would argue that your wages will increase over the term so what's wrong with a huge multiplier at the start if you can afford it, things will get easier with time. I don't subscribe to that way of thinking. A lot can go wrong in those first few years.

edit: plugged some figures into a mortgage calculator here - http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml
borrowing 180k at 5% (historically a low rate over 25 years) your monthly repayments would be over 1k a month. back of an envelope maths tells me this is totally unaffordable on a 21k salary.

maybe work backwards to see what deposit you'd need: can afford £xxx per month on a mortgage, mess with the calculator to see what mortgage that equates to, then deduct that from your kind of house, result is a target deposit.

LittleMissAspie

focus888 wrote: »

I only earn about 21k a year and i want to be able to buy a place for myself later on for about 200k. Im thinking about starting saving for a deposit but how much should i try and save for because even though i know there are mortgages out there for more than 3x your salary i feel like saving for 15-20k and then having a mortgage for £180k is so daunting. Should i aim to save more than this? how much more than this?

Sorry but on 21k you can't pay a mortgage of 180k plus your bills. It will be more than your earnings. You have to double your earnings or buy in a cheaper area.

You should still aim to save 15k though, it will take you a while but you will be well placed to buy somewhere for about 100k then.

Dinah93

We're aiming to buy in the 200k bracket, however our current combined salary is 42,5000 (should rise to 49,200pa within 2 years), and we are aiming for a 40,000 deposit, and we consider this to be stretching it as far as we could push it. I do not see how a £180,000 mortgage would be affordable, you need a much bigger deposit, or scale back your ambitions a bit.

focus888

Dinah93 wrote: »

We're aiming to buy in the 200k bracket, however our current combined salary is 42,5000 (should rise to 49,200pa within 2 years), and we are aiming for a 40,000 deposit, and we consider this to be stretching it as far as we could push it. I do not see how a £180,000 mortgage would be affordable, you need a much bigger deposit, or scale back your ambitions a bit.

I live in london and so its very expensive whatever type of accomodation i go for. Just if im going to get into debt and have a mortgage i want it to be one for a place im gonna live in for life so i want it to be a house and not a flat. I knew it wasnt something easily achieved because of my wage bracket but its going to get me off my butt and doing something about it, like going back to studying and working harder to get a better paid job. I dont expect to get the deposit for another 4/5 years so from now until then i hopefully can double my salary thanks for all your replies.

JimLad

Bit of a hit to my savings today

£521.99 to get my car serviced and the cambelt replaced.

With that expence taken into account (even though i dont have to pay till next month, good old credit cards ) i can only save about £50 this month

Its payday today and my new total is £9900 / £20000, almost half way!

aylithuk

Hey guys

Thought I'd join this thread.

Me and the OH are currently renting however want to get started with saving for our 1st house deposit

I am in a lucky position that I work for a bank and the mortgage products are very favourable to staff and they will offer me a mortgage with 10%deposit.

Looking at saving at least 12,000 and anything above this will be a bonus

I am currently able to save about 350 pm and OH 400 pm if we have no life

I have a small loan that will be paid off next April and that mean I'll be about to put another 180pm toward the savings.

Nice to read this thread and see everyone saving for their own 1st house.

[Deleted User]

Not had much babysitting as usual this month. I was babysitting last sunday and last night and this money has totalled £33.50 towards my house savings
My house deposit savings are slowly creeping up and its great to see it increasing

butterfly72

Just a bit of an update.

Well, we've had our allotment for a few weeks now and have made good progress. We won't be saving any money this year as we've had to fork out a fair bit for tools, seeds and other bits and pieces. We should save next year however, I was hoping we might have moved out of the area and into a new house by then!!! Still, its great exercise and really enjoyable.

I've had my ramoska cooker for a few weeks now also. Between that and the slow cooker I've not had my main cooker on for nearly 3 weeks!! The Ramoska was expensive - £114 but I'm sure in time I'll save on electricity costs. See the ramoska thread on the Oldstyle forum.

I've just started my adult ed Making Clothes course. I really enjoy it but it was a game getting hold of a pattern and fabric. The pattern for jimjams was £7.50:eek: and the fabric and cotten £21.00 :eek: The most expensive PJ in the world! And they probably won't even look good! Still, I'll be learning useful skills and will be able to alter and repair clothes. I plan to progress to soft furnishing so that should save me some money.

The savings pot is still slowly growing. As I said I've decided not to go part time at work for a while and am enjoying the feeling of working hard towards the deposit. I'm able to do things outdoors now the nights are lighter so I don't need that extra day.

Oh... forgot to mention. I got a £1400 tax refund (washing uniform, professional subs etc) Trouble is, they have upped my tax code so i'm being refunded on a slow month by month basis. Would have prefered a big fat cheque to put in my savings account whilst I have 6%!!!

Hi to everyone on the thread and good luck with your savings!! :T

JimLad

Just started new job and i missed the cut off for this months pay! That means i wont get paid until the end of June! Eeeeek