With rising prices and Central Bank lending rules, getting a deposit together takes some smart thinking right now.  Here’s our handy guide to help you.

Set a realistic goal

You’ll be a better saver when you’re motivated by the idea of your future house or flat.  How much is it likely to cost?  Once you decide that, it’s a simple sum under the Central Bank’s rules.  If you’re a first-time buyer, you’ll need a 10% deposit.  For everyone else, it’s 20%.

Make it sustainable

Buying property has always been a long-term decision.  Now saving for a deposit is too.  The Central Bank reckons it takes up to four years to save up for a house deposit in some parts of Dublin.

So set a sensible timeframe.  If you’re signed up with Moneycube you could try our calculator to set a goal for yourself.

Remember this is not just about cutting back for a month or two.  You are aiming to reset your finances for good to make room for a decent monthly contribution to your house fund.  That might mean having a tough conversation with your boss to get a raise, or moving now to cut your rental costs.

Think about where to put the cash

For a short-term savings plan, cash in the bank is likely the right route.  But if you plan to save over some years, an investment fund offers the prospect of better growth.  You could even consider putting it into a fund which invests in property, where the value will match up with what’s happening in the property market.  (That’s where we can assist).

Who can help?

Recent info from Bank of Ireland says that 43% of first-time buyers expect to tap up friends and family to buy a house.  If you have set up your savings fund already, why not try and drum up that money now, and give it a chance to grow?  Remember anyone can give you up to €3,000 each year without triggering tax issues.

Get Help to Buy

First-time buyers can now get as much as €20,000 towards a purchase in the form of refunded taxes.  It’s available for new-builds costing under €500,000, where your mortgage is at least 70% of the house price.  Here’s Revenue’s nice and clear explainer.

Above all, stay motivated

Your deposit plan gives you control and freedom.  It’s not about self-denial.  It’s money you’ve invested in your future.  On top of that, you’ll be able to demonstrate a track record of chunky and regular saving to help secure a decent mortgage offer when the time comes.

 

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