Brits urged to save despite zero-deposit mortgages

Brits are being urged to continue to save cash they were putting aside for a new home despite the recent announcement of zero-deposit mortgages.

The frugal experts at NetVoucherCodes.co.uk are warning those thinking of taking advantage of zero-deposit mortgages to do their homework and if they can afford to put a deposit down, to keep repayments and interest lower.

They’re also urging them to be realistic about monthly repayments and not to get carried away by not needing a deposit.

Zero-deposit schemes haven’t been widely available on the market since the financial crash of 2008, but now they’re set to make a comeback.

The requirements to apply for the scheme include having proof of 12 months of rent paid within the last 18 months, being over 21 years of age and having a good credit score.

For many first-time buyers, this may appear a dream come true, as many have struggled with finding the necessary funds to put down a deposit on a house amid high inflation rates.

However, the consumer experts at NetVoucherCodes.co.uk are encouraging first time buyers to research the schemes, factoring in how much they could save if they hold off and get a deposit together.

For those who struggle with the deposit, they’re encouraging them to be realistic when it comes to mortgage repayments and not burden themselves with unrealistic monthly outgoings.

They’re also encouraging first time buyers to carry on saving  if they can so there’s money put aside for upkeep, maintenance and any unexpected costs after they move in. 

John Stirzaker, online consumer expert at NetVoucherCodes.co.uk said: “With inflation rates at alarming rates and the housing crisis getting worse, the re-introduction of the zero-deposit mortgages is a real bonus for first-time buyers.

“But the potential issue is that first time buyers could get carried away at the thought of not having to put down a hefty deposit and find themselves splashing out on a house they can’t afford with huge monthly repayments.

“That’s why we strongly urge people to think carefully about their finances and not rush into investing in a house if it’s only going to leave them cash-strapped and struggling for money in the long run.

“There are ways to save which could help potential first-time buyers so they don’t splash all their money at once, such as money-save challenges.

“One way to save is following the 52-week challenge - for the first week, you put away £1, £2 on the second, £3 on the third and so on and so on. Then by the end of the year, you could have saved £1,378.

“Even rounding up costs and putting it in savings can help massively. If a total food bill is £18.73, round it up to £20 so the remaining £1.27 will be kept out of sight. Then you can take the total amount of spare change that’s been saved and get a nice return at the end of the year.

“This way if you are thinking about going for a zero-deposit mortgage scheme, you’ll still have money in your savings and reduce risk of financial hardship in the future.”