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Saving for a Mortgage in Sheffield

For many first time buyers, the prospect of purchasing their first home can be daunting. There are many factors to consider, such as having a good credit score and saving up for a deposit.

In this article, we will focus on the latter and provide tips on how to save for a mortgage in Sheffield.

Calculating Your Monthly Disposable Income

The first step in saving for a mortgage is to calculate your monthly disposable income. This can be done by deducting your expenditures and outgoings from your monthly income. This will give you an idea of how much you can set aside for your mortgage savings and mortgage deposit each month.

When taking out a mortgage with a high street lender, a minimum of 5% of the property’s cost is usually required as a deposit. However, it is recommended to aim for at least 20% of the property price, as this can lead to lower interest rates and lower monthly payments.

Are there any schemes available?

The government offers various schemes to help first time buyers in Sheffield get on the property ladder.

The Shared Ownership Scheme, for example, allows buyers to purchase a share of the property and pay rent for the remaining share. The deposit amount that you are required to put down is based on the percentage share of the property that you are taking out. For example, if you are taking out a 30% share of a property, your deposit is based on the 30% not the 100% value of the property.

Another example of a scheme available to first time buyers in Sheffield would be the Lifetime ISA. Lifetime ISA is simply a savings account where your money grows tax-free. The funds that have been built up in the savings account can only be used towards your mortgage deposit and costs such as solicitor fees, arrangements fees, etc.

It is worth exploring these options to see if you are eligible for these schemes before applying for them as not all of them will be suitable for you. Our mortgage advisors in Sheffield will run through your scheme options to see whether this is the most appropriate route for you. To view a full list of these schemes, get in touch with our team or head to

Help From Elsewhere

A gifted deposit from a family member can greatly assist in saving for a deposit. Gifted deposits are just a lump sum of money gifted to you by a friend or family member(s), this money is not to be paid back overtime, it is simply a gift to help the homebuyer get onto the property ladder.

Buying a Property With a Friend or Partner

Even if you think that it would be quicker to move in with a friend or partner, you must understand the risks that can come with taking out a joint mortgage. You should only take out a joint mortgage if you are 100% sure of your decision.

When buying a property with a friend or partner in Sheffield, both parties are responsible for the mortgage and you are financially linked with one another. Therefore, if one party happens to miss their repayments, it can go against your credit. As a first time buyer in Sheffield, review your options before making a decision.

Improving Your Credit Score

Having a good credit score is essential when applying and saving for a mortgage. Whilst saving for your deposit, we recommend also working on your credit score at the same time, making sure that it is the best that it can be. A good credit score could potentially open you up to more favourable mortgage rates.

If you have a low credit score, there may be ways to improve it, such as registering on the voter’s roll, keeping within your credit limit, and meeting payment deadlines. It is also important to close any unused credit accounts and detach yourself from any financial links to others.

Doing these small things can often make a difference. If you want to learn about why having a good credit score is important and how you can improve your credit score in Sheffield, we have plenty of articles covering each subject on our site.

Expert Mortgage Advisors in Sheffield

At Sheffieldmoneyman, we offer free mortgage appointments to every customer. Our job is to guide you through the entire mortgage process, putting you at ease and making the experience stress-free.

Our mortgage advisors in Sheffield will provide personalised advice and support to help you achieve your mortgage goals. Saving for a mortgage in Sheffield may seem like a daunting task, but with proper planning and guidance, it can be achievable. By following these tips and seeking help from experts, you can make your dream of owning a home a reality.

Date Last Edited: November 24, 2023

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