Top tips for getting your mortgage deposit together:
At Mortgage buddy we understand the pressure that many potential buyers are facing when it comes to gathering the money for a deposit. We decided to make our 6 tips to help you gather your mortgage deposit.
1. Get acquainted with the Help-to-Buy scheme
This scheme gives a tax rebate to first-time buyers of up to €30,000 to help towards the deposit for a NEW build property. The scheme is open until December 2021 having recently been enhanced by the current Government. Click here to learn more about this scheme.
2. Look into a mortgage ‘exemption’
The Central Bank requires you to save a deposit of at least 10% of your house price, which is easier said than done with rent prices as high as they are.
However in any one calendar year, 5% of mortgages to first-time buyers can have a deposit below 10%, provided you meet other lending criteria of course. So chat to your bank about the possibility of getting a mortgage deposit exemption.
3. Consider mortgage cashback deals
A lot of banks are currently offering mortgage cashback deals for first time buyers. While the rates on these deals tend to be higher, meaning you pay back more over the longer term, there’s a lot to be said for getting a cash lump sum within a few weeks of drawing down your mortgage. Plus, you can always switch to a cheaper non-cashback deal after a few years.
4. Get more money savvy
Get up to speed on how to spend your money more wisely and watch the pennies accumulate. Every little helps to borrow a phrase.
Saving just €25 a week on your outgoings by being more money savvy will add up to over a grand by the end of the year. And by making sure you’re not overpaying on your household bills you’ll save even more. You can view some top tips on how to save your money here.
5. Claim a tax refund
According to information by the main independent providers of tax refund services in Ireland, the average refund for anyone who looks into their tax affairs is in the region of €900-€1,100. A refund like this won’t by itself help you get your deposit together but it all adds up. It’s better that the money is in your pocket as opposed to the Government’s!
Every journey starts with the first step as they say. And whilst the task of saving for a deposit might seem insurmountable at times, even putting away just €50 a week would add up to €2,600 at the end of one year (€5,200 if you’re a couple and both saving) and that’s before you earn any interest.
Because even if you magically got gifted your entire mortgage deposit you’d still have almost no chance of getting a mortgage for the rest of the amount required unless you can demonstrate some type of savings habit.
Setting up a direct debit or standing order and paying into your savings account just after payday is the best way to go and means you’re less likely to miss the money.
If you have any more questions you are asking yourself, you can take a look at our most commonly asked questions here 🙂