Are you hoping to get your foot on the property ladder when you graduate? Saving up for a mortgage while you’re still at university can seem like an impossible task; especially if you have student loans you’ll need to pay off too. However, while it may be tough, there are ways to increase your chances of getting a post graduate mortgage.
Here, you’ll discover some great tips to help you determine whether getting a post graduate mortgage is realistic or not.
How much will you need to save?
The first thing you’ll need to do is figure out how much you’ll need to save to get a mortgage. It’s estimated the average price of a mortgage within the UK is £170,000. Obviously, this will vary depending upon location, so it’s worth researching house prices in your chosen area.
At the very least, mortgage lenders will require a 5% deposit. However, it’s worth keeping in mind that paying just 5% will limit your options. If you can put down a 10% deposit, you’ll have a lot more mortgage options, often at lower interest rates. The trouble is, getting a 10% deposit by the time you graduate could prove unrealistic.
To put it into actual numbers, a 5% deposit is approximately £8,500, while a 10% deposit will require £17,000.
Is a graduate loan a good option?
One thing you may have considered is a graduate loan. Wile these do tend to have lower interest rates than standard loans, it may not be the best option to get you on the property ladder. That’s because not only would you have a mortgage to pay, but you’d also have potentially high loan repayments on top of bills.
So, before considering a loan, it’s worth really doing your research into whether the repayments and debt level on top of a mortgage would be worthwhile. If not, you’ll be better off looking at ways to save a deposit.
Ways to save money towards a deposit
It might not be easy but saving up for a deposit while you’re still at university is doable. There’s a lot of tips you can follow to help you budget, as well as save towards the cost of your deposit.
Firstly, consider where you’re currently staying. Could you save money by taking up rented accommodation in a student house? Take a look at all-inclusive student accommodation and see whether it could save you money that could be put towards your deposit.
Getting a part-time job is also a popular option. Once you’ve saved money on accommodation, getting a part-time job will provide you with additional money to put towards your savings. Of course, you can also ask your parents if they might be able to help. Consider asking them to match the amount you save each month if they can. That way, you’ll save up much faster, making it more likely you’ll be able to get a mortgage once you’ve graduated.
These are just a few great tips to help you save for a post graduate mortgage. It’s not easy, but with dedication and savviness, you’ll soon start to see your deposit growing.