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How to save up a deposit in 6 years (or less)

Updated 20 December 2022

5min read

Nick Green
Financial Journalist

What’s keeping you from buying your first home? Most likely it’s saving up enough for a deposit. We look at how much you might need, how long it may take, and the fastest and most effective ways to build up the money you need to get on the property ladder. Article by Nick Green.

Saving a deposit for your first home

Saving a deposit for your first home can seem like a mountain to climb. However, if you approach this challenge in the right way you’ll find it can be conquered – just as mountains can be.

There’s a cruel paradox at the heart of the housing market, which is that it’s usually more expensive to rent than to buy. In most cases you’ll spend more money renting a place than you would paying off a mortgage on a similar property. To make matters worse, money spent on rent is gone forever, whereas when you’re paying off a mortgage, you know that at least some of it is being invested in your home.

Yet you may still find yourself saying ‘I can’t afford to buy.’ This is because getting a mortgage usually requires a deposit, typically several tens of thousands of pounds. And how do you save up that much while paying hundreds in rent every month?

By taking a look at the figures involved, you can break down this task into manageable chunks and see a clear route to achieving your deposit – and your first mortgage.

How big a deposit will I need?

First, let’s measure that mountain. Property prices vary greatly around the UK, but according to Halifax the national average price of a first home is around £212,500. Your deposit might be as little as 5 per cent of this or as much as 20 per cent (or more), but the larger it is, the better mortgage deal you’re likely to get. We’ll assume you want a reasonably good deal, and so will aim for 15 per cent (the national average is 16 per cent). This means you’re hoping to save up a lump sum of £32,000.

The typical first-time buyer is at least 30 years old, so the saving will be happening in your 20s. The average UK graduate wage is age multiplied by 1,000 – i.e. a 22 year old can expect to earn around £22,000 and for this to rise to £30,000 by the time they reach 30. This translates into an average wage of £26,000 over those eight years.

Average home price


Good-sized deposit


Average age of first-time buyer


Average wage over previous 8 years


Assuming that you can start saving by age 22, then to save up £32,000 by the age of 30 you’d have to save £4,000 a year. This means putting away £333.33 per month, which is a lot – nearly 20 per cent of your take-home pay after tax. Whether or not this is realistic for you will depend of course on your other living costs – it should be no problem if you can live rent-free with your parents, but… that’s a big ‘if’. Renters, of course, will struggle much more.

Saving such a large percentage of your pay regularly may become manageable if you think of it this way: every £10 you receive is actually £8, with the rest going towards your first-home fund. It may also mean having to adopt an attitude similar to that promoted by the FIRE movement, where people aim to live very frugally for a time in order to retire sooner. Keeping your goal in mind can help you persist when things get tough.

Is there a quicker way to save up my deposit?

Fortunately, you can save up that £32,000 deposit much more quickly by using a Lifetime ISA (LISA). You can open one from the age of 18, paying in up to £4,000 per year, to which the government adds a 25 per cent bonus at the end of each tax year. So if you were to save at the same rate as in the example above, by the end of the first year you’d have a total of £5,000 (before any interest or growth). Do note however that there are restrictions on withdrawals if you want to use the money for any reason other than buying a first home (before the age of 60).

LISAs can be cash ISAs or stocks & shares. A cash LISA is the most predictable, and at the moment you can find interest rates of around 1 per cent. If you can save £333.33 a month into a cash LISA paying 1 per cent interest, then you will accumulate your £32,000 in just six years and three months.

Cash LISA paying 1% interest

Monthly saving


Annual saving


Annual government bonus


Time taken to reach £32,000

6 years 3 months

With a stocks & shares LISA, growth depends entirely on investment performance, so is impossible to predict. Growth may outstrip inflation, or you may even lose money if the stock market dips significantly. Nevertheless, if you are lucky you may hit your target sooner. If your stocks & shares LISA is doing well in year 5, it can be a good idea to transfer it to a cash LISA so you don’t lose those gains. (If it’s doing badly, your only option is to sit tight and hope for it to rise again).

How about an even faster way to save a deposit?

If you want to trim that six year timescale even more, there is of course the option of buying with someone else – if you can find them! A couple saving together, on the national average graduate income, could achieve that same deposit in just over three years. Alternatively, you might prefer doing it at half the cost over the six years – each of you would only have to save £166.67 a month, or an average 9.5 per cent of take-home salary, which is much more achievable.

Of course, you don’t have to be a couple for all that time you’re saving up. If your lucky stars align, you might happen to meet your soulmate at the point when each of you has saved up exactly half the deposit you’d need. (Watch for this becoming a popular question at speed-dating events…)

You even have the option of buying a home with a good friend – or up to three friends if you have enough confidence in each other. As many as four people can own a home together as tenants in common – though bear in mind you’d then need a bigger property, and therefore a larger mortgage and a bigger deposit.

Yet more options exist for people who really struggle to save up a large enough sum. If your parents own their own home then they may be able to help out by guaranteeing your mortgage – in which case you may need only a small deposit or none at all. Find out all the ways in which parents can help you buy a home.

Saving a deposit: at-a-glance tips

  1. Use a LISA
  2. Reduce your rent as much as possible (e.g. by living in a house share or flat share)
  3. Cut down on other spending (use our savings tips)
  4. Put away savings at the start of the month, just after you’ve been paid
  5. Pace yourself – don’t despair if you miss your monthly savings target. It’s only a delay.
  6. If using a stocks & shares LISA, monitor it carefully in the last couple of years and transfer it to a cash LISA if it’s beaten 1 per cent interest over five years.
  7. Don’t access your LISA for any reason except buying a home, unless it’s an emergency. You’ll pay a 25 per cent penalty on ordinary withdrawals before the age of 60.
  8. Meet the love of your life as soon as you can! (We recognise that this may be even harder than buying a home…)

Saving a deposit for your first home is usually the biggest financial challenge you’ll face in the first half of life – but by breaking it down in this way, you’ll see that it is achievable. For more help, check out these mortgage tips and our First-Time Buyer Guide. You can also test the strength of your overall mortgage application using our Mortgage Checklist tool.

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About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.