Whether you don’t know how to save, where to save or how much to save (or all of the above), here’s our ultimate guide to building a home deposit in 2026
Are you saving for a down payment or planning to put money aside for your first home in 2026?
If so, we’ve put together some top tips to help you maximize your savings this year.
From help finding the best account for your needs to advice on how to make saving a habit, this guide will equip you with the tools you need to make a decent down payment when it comes time to buy your home.
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Set a savings goal
The most important tip for successful saving is setting a goal. You already know your goal is to buy a house, but how much do you need to save to make a decent down payment?
To make sure you’re on the right track, use a mortgage calculator or contact a real estate agent to find out how much down payment you need.
Most mortgage brokers advise you to save at least 10% of the value of the home you want to buy. However, some lenders offer low deposit mortgages at 95% loan-to-value, meaning a 5% deposit would be sufficient for some buyers.
Don’t forget to also include moving and purchasing costs. You will need to put money aside for the conveyancing lawyer, valuations, possible mortgage and estate agent costs plus moving costs. Some first-time buyers may also have to pay stamp duty in some areas where house prices are higher.
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Cast your net when looking for the best account
When choosing the right account, many people automatically look at the savings product of their current account provider. But before you do this, check out what other rates are available in the market.
It’s rare for major banks to offer the highest interest rates on savings accounts; often challenger banks and building societies can be more competitive. The more interest you earn, the bigger your savings pot will be, so make sure you don’t rule out a more profitable option.
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Choose the right type of savings account for your needs
There are also different types of savings accounts to choose from and which one you choose depends a lot on how long you plan to save for and how much money you already have set aside.
Easy access to accounts are the most flexible and allow savers to deposit and withdraw cash whenever they want. There are no penalties for withdrawing money, but rates are usually lower and are usually variable, so go up and down with the Bank of England’s base rate.
As you may know if you are considering purchasing a home, the The Bank of England recently cut interest rates to 3.75% and there are predictions that they will lower it again in 2026. This could therefore affect savings accounts with variable interest rates.
But if you feel like you need immediate access to your money – especially if you’re making a purchase this year – there are still plenty of easily accessible products with good rates, so take a look at what’s on offer.
Bonds with a fixed interest rate are better for those who want a guaranteed rate. They also tend to have higher interest rates on average than variable interest rates.
However, once you lock your money in these accounts, you will pay a penalty if you withdraw money within the specified period.
There are a wide variety of fixed income bonds on the market that allow you to invest your money for one year, two years… and up to five years. When considering these accounts, you can select the time period that suits your plans and goals.
These accounts often have a high minimum deposit, such as € 1,000. So they are usually more suitable for those who have already saved some money and want to increase their interest.
You can even use one alongside an easy access account to maximize your returns as you build your pot.
Regular savings accounts offer competitive interest rates for savers who make monthly deposits. These can be a good option for new savers.
Pay attention to bills could be the sweet spot between easy access and fixed-rate bonds for those savers who want better rates but can’t stash away a large sum of money. Normally you must give 90 days’ notice if you want to withdraw cash.
Lifetime ISAs – An article on first-time buyer savings wouldn’t be complete without a section on Lifetime ISAs (LISA). We are currently taking this with us for the time being, because this savings product is aimed at starters, but is about to undergo a facelift.
The LISA allows savers to put aside up to £4,000 each year tax-free, and in addition to the interest paid by the provider, the government also pays a 25% bonus on your savings.
There are plans to renew the scheme, which is currently available to starters and pension savers aged 18 and under 40. So keep an eye on this page for updates.
What to pay attention to
Savings providers often add ‘bonus’ interest rates to entice customers. Do you see an attractive rate? Then check the small print to see how long this will be on sale. Also pay attention to any restrictions: withdrawal fees, deposit limits or conditions.
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Check your income and expenses
Next, you need to calculate how much of your monthly income you want to allocate to your deposit.
Take a look at your bank statements to see what’s coming in, what’s going out and how much is left over.
If there’s not much left to save, it might be worth taking a closer look at your spending habits and – if necessary – ditching some of those unwanted subscriptions or tightening your budget.
You can find budget tips on our sister website, The Money Pages.
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Make saving a habit – and a fun one at that!
You have your goal, you know how much you need to save and you have opened a new savings account. Next, you need to start putting money away.
The best way to do this is to set up a standing order to transfer money to your savings account on payday. That way you can’t spend the money and you have one less job to do every month.
George Abouzolof, senior mortgage broker at Clifton Private Financesaid: “Treat this transfer as a priority expense, rather than something you do when there is money left over.
“Setting an annual savings goal and breaking it down into monthly amounts can make the goal feel more manageable.
“The key is to save enough to make steady progress without putting too much strain on your day-to-day finances.”
Maintaining the savings habit depends a lot on how much you can put aside each month. If you’re looking for ways to boost your savings by stashing away as much money as possible, there are several savings hacks. We’ve listed a few below to help you get started.
Delete subscription: Are there subscriptions you pay for that you simply no longer need or can live without? Cancel them and place the money in the piggy bank.
No spending January: This can work every month, but you can even reduce it to a week or weekend. But just spending money on the basics – bills, rent, food, travel – for a set period of time can really help you focus on your savings. There are others ‘challenges‘ you can help yourself save deposits – why not try one?
Earn up to €250 by changing your current account: There are currently a number of attractive cash benefits on offer to customers who switch checking accounts. Some banks offer £250. You can add this money to your deposit for an instant boost.
Collection apps: There are some banking apps that, when you spend money, round up the purchase to the nearest $1 and automatically add the difference to your savings.