How to Save for a Mortgage While Renting

Trying to save for your first home can feel like a huge task, especially if you are also paying rent and bills at the same time. You may find it easier to make smaller, daily changes to your spending, rather than radically changing how you live.

Here are some of things you can do to help you get on the property ladder more quickly.

Sublet a Room

It may be possible for you to sublet one of the rooms in your property and get another tenant. This will alleviate up to half of your monthly rent, freeing up more of your income to save.

Make sure to check your tenant agreement to see if this is possible and gain permission from the owner of the property before you start searching for a new tenant.

You can also use the Government’s Rent a Room scheme. This allows you, the tenant, to rent out a furnished room, earning up to a threshold of £7,500 tax-free. If you earn over £7,500 from this scheme, you will have to pay tax and complete a tax return form. You will need to check your tenancy agreement and speak to the owner of the property to see if you can.

You can read more about the Rent a Room scheme here.

Work from Home

A lot of employers now allow you to work from home if needed. You can save money on petrol or public transport costs simply by taking advantage of this.

Even just working from home once a week and saving on those transport expenses will accumulate annually to make a difference to your savings.

Make your Home Energy Efficient

If bills aren’t included in your monthly rent, then a great way to save extra money is to make your home more energy efficient.

Heating bills can be a big monthly expenditure. One option to save some cash is to wear layers instead of switching the heating on. You can also purchase a portable heater, so you only heat up the room you are in, rather than heating the whole house.

Another easy tip is not leaving your appliances on standby and washing your clothes at cooler temperatures. These small changes will all help to bring your bills down.

Work out how much you’re saving each month by making these adjustments and transfer it straight into your savings!

You could even look into switching providers if you find a more purse-friendly option and ask the owner of the property you are renting if you can make the switch.  

Take a Local Holiday

Swap your big holiday for a getaway in the UK. There’s so much to explore in Britain, so you can still enjoy a holiday without breaking the bank.

Instead of crossing continents to find beautiful scenery, try visiting some nearby nature, like the UNESCO World Heritage Lake District. Prefer a city break? Opt for Durham or York instead of an expensive overseas excursion.

Drink Slower

Having to say ‘no’ to plans because you’re saving for a mortgage can get frustrating. You shouldn’t have to stop socialising in order to save for your first home.

If you get an invite to go to the pub, try drinking your drinks slower and make them last longer. This simple switch can save you hundreds of pounds over the year.

For example, the average monthly cost of drinking four pints every weekend is £59. That’s £708 a year! By cutting that down to 2 pints a weekend, you can save an extra £354 annually.

Open a Lifetime ISA

A Lifetime ISA (LISA) is a savings account that you can open if you are aged between 18 and 39 and looking to buy your first house.

You get a monthly UK Government-backed bonus automatically deposited into your LISA which is great for first time buyers. For every £4 you put into your LISA, the government will give you an extra £1. The maximum you can contribute to your LISA per tax-year is £4,000, which means you can benefit from an extra £1,000 every tax-year.

If you would like to know more, check out our LISA FAQs

Check out our LISAs and start saving for your first home now. For more information about how to get your first home, we have great guides and tools for you to use to make the process easier. Alternatively, contact us or visit your local Newcastle Building Society to speak to one of our Customer Advisers.