Buying your first home is a milestone in anyone’s life, but saving for that deposit can be hard work. It’s possible to apply for a 100% mortgage and it can be very tempting to do so when the alternative is to save up for several years, but you could end up paying dearly in the long run.



A 100% mortgage means a higher interest rate and a bigger chance of getting caught in negative equity – that is, your house is worth less than the amount you still owe on it.



So how can you start saving towards that all important deposit and make sure you reach the desired amount as soon as possible?



The key to success is to save regularly, and the best way to do this is to set up a direct debit from your current account to a savings account every week or month, to coincide with your pay day. This ensures you won’t forget to transfer the money yourself, or be tempted to spend it on something else. Remember, it’s an investment in your future.



Shop around to find a savings account which offers a high rate of interest but still allows you instant access as you might end up applying for a mortgage loan sooner than you think, and you’ll want to be able to get to your deposit when it’s needed.



The effect of compound interest will help to grow your deposit more quickly; after the first year you will earn interest on your interest as well as on your capital.



Another way to build a bigger deposit more quickly is to cut back on your household bills and outgoings. Try keeping a diary for a month to see where your money goes – you’d be surprised how many savings you can make, all of which can go into that savings account.



If you are currently renting your home, you can try shopping around to find cheaper gas and electric suppliers – many will give further discounts for taking both fuels and paying by direct debit. You can also get better deals on your telephone service, internet connection, mobile phone and many other regular outgoings. Make a note of the savings you are making and adjust the amount you are putting into your house deposit fund accordingly.



Another way to get your deposit together more quickly is to ask family members for help. It can be an easier alternative to borrowing from a bank, although you should still work out your finances before you agree to this kind of loan, to ensure you will be able to pay it back as agreed. Defaulting on your payments to a family member can be just as stressful as defaulting on a bank or building society – tread very carefully if you are going to take this option for all or part of the deposit amount.



It can be hard work saving for that deposit, but with regular effort you might reach your goal sooner than you think.