How to Save For a Mortgage in Newcastle

Saving for a mortgage is often the biggest challenge for first time buyers in Newcastle.

Getting your deposit together can feel daunting, but breaking it down into manageable steps will make the process much more straightforward.

We’ve broken it down for you in this article, so you know what to expect and how to get started on your journey towards homeownership.

How much do you need to save for a mortgage?

The first thing to consider is your deposit target. Most high street lenders in Newcastle will ask for a minimum deposit of five per cent of the property’s value.

Many buyers choose to save a larger amount, such as ten, fifteen, or even twenty per cent, as this can help you secure better mortgage rates and reduce your monthly repayments.

If your credit score isn’t perfect, you may be required to provide a higher deposit, sometimes up to fifteen per cent.

It’s also important to remember to set aside money for other expenses, including legal fees, property surveys, and the cost of moving.

Having a clear savings goal from the outset can make planning the rest of your journey much easier.

How can you work out your monthly savings target?

To figure out how much you can save each month, start by looking at your income and regular expenses.

Subtract your monthly outgoings from your income to find out what you have left over; this is your disposable income. From there, decide how much you can comfortably put aside towards your mortgage deposit.

Setting a realistic savings goal not only helps you stay motivated, but also makes it easier to track your progress.

Some buyers find it useful to set up a separate savings account, so it’s clear what money is set aside for their deposit. The more consistent you are with your savings, the quicker you’ll reach your target.

What is a Lifetime ISA and how can it help?

The Lifetime ISA is a government-backed savings account designed to help first time buyers save for their deposit.

You can put away up to £4,000 each year, and the government adds a 25% bonus on top of what you save, so for every £4,000 you deposit, you get an extra £1,000.

You need to be aged between 18 and 39 to open a Lifetime ISA in Newcastle, and the money must be used to buy your first home or saved for retirement.

Using a Lifetime ISA can make a real difference to your deposit, helping you reach your target faster. Just make sure you check the terms and conditions to see if it’s the right fit for your plans.

Can a gifted deposit help you buy your first home?

A gifted deposit is money given to you by a family member or close friend to put towards your mortgage deposit.

This can make a significant difference, especially if saving on your own is taking longer than you’d hoped. The person providing the gift will need to confirm in writing that the money is a gift and not a loan, and that they have no interest in the property.

Many first time buyers in Newcastle use a gifted deposit to help them get on the property ladder sooner. If you’re considering this route, it’s worth speaking with your mortgage advisor early on, as your lender will want to see where the money has come from.

How can reviewing your spending help you save more?

Taking a closer look at your regular outgoings is one of the simplest ways to speed up your savings.

By cutting back on non-essential spending, such as unused subscriptions or takeaway meals, you can often free up more money each month. Even small changes can add up over time and bring your deposit goal closer.

Setting a clear budget and tracking your spending can help you spot areas where you might be able to save a bit extra.

Many first time buyers find it helpful to review things like mobile contracts, streaming services and any other expenses that could be reduced or paused while you save for your home.

Could buying with a friend or partner help you get on the property ladder?

Saving for a deposit can be quicker and more manageable if you buy a property with someone else.

Buying a property with a friend, partner or family member means you can combine your savings, making it easier to reach your deposit target and share monthly payments.

It’s important to understand that both parties will be jointly responsible for the mortgage. This means if one person cannot make payments, the other will need to cover the shortfall.

Before you go ahead, make sure you discuss how you’ll manage the finances and what would happen if circumstances change in the future.

Your mortgage advisor in Newcastle can also talk you through the differences between Joint Tenancy and Tenancy in Common, so you can find the best arrangement for your situation.

Final Tips For Saving For a Mortgage in Newcastle

Saving for a mortgage takes time and patience, but every step you take brings you closer to owning your own home.

Whether you’re building your deposit month by month, exploring schemes like the Lifetime ISA or getting support from family, the most important thing is to keep your goal in sight.

If you need help working out your options or are looking for mortgage advice on the next steps, there’s plenty of support available. Taking the time to prepare now can make your home buying journey in Newcastle much smoother.

Date Last Edited: July 21, 2025