You are here: Home - Mortgages - First Time Buyer - How to -

The spending tactics savvy homebuyers use to get on the property ladder

Written by:
Ask any mortgage broker for tips to get on the housing ladder and one thing they’ll say is: get your spending in order.

Since the regulator introduced tougher affordability rules five years ago, lenders have taken a greater interest in applicants’ bank statements.

They’ll look for obvious things like your overdraft history. But they’ll also scrutinise your discretionary spending. Think magazine subscriptions, trips abroad, and gym membership.

But first-time buyers today have become savvy when it comes to reining in their spending ahead of a house purchase.

In fact, a survey by MoneySupermarket revealed that 58% of British homeowners made tactical changes to their spending habits in order to buy their first home.

Nearly a quarter (23%) used their credit card and cleared their balance at the end of the month to improve their profile to potential lenders, while 32% actively paid off existing debts in the run-up to their mortgage application.

To hide certain outgoings from lenders, 9% used cash more frequently.

Wannabe buyers also cut back on eating out, going on holiday, takeaways and buying clothes.

One in ten even reduced their Netflix subscription.

A survey of 1,300 mortgage holders revealed that the average homeowner saved an extra £369 a month in a bid to get on the property ladder.

Rachel Wait, consumer affairs spokesperson at MoneySupermarket, said: “Buying a property is probably the most expensive purchase you’ll ever make, so every penny counts when you’re trying to build up a deposit on your first home.

“Once you’ve saved enough for a deposit, it’s definitely worth shopping around for the best possible rate on your mortgage. Doing so could mean that you save a significant amount of money over the mortgage term and ensure that all your hard-earned savings aren’t wiped out by paying over the odds on your mortgage.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Unfamiliar banks woo savers with top rates…is your money safe?

If you’ve been keeping an eye on the savings best buy tables, you’ll have noticed some unfamiliar names lu...

What the base rate rise means for you

The Bank of England has raised the base rate by 0.25% to 0.5% – following on from the increase from 0.1% to ...

How to get help with your energy bills

The rise in the energy price cap from April will mean millions of households will pay hundreds of pounds a yea...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week