IT can be hard to find a home with a tiny deposit – but it’s not impossible.
First-time buyers Callum Paddy and Kye Strowbridge explain how they bought a £340,000 three-bed pad in Suffolk with £17,000 – just a 5% deposit.
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The couple used the Help to Buy government scheme that lets you borrow up to 20% of the value of your property, or 40% if you live in London.
Its interest free for five years, but the couple are planning to remortgage their home to repay the loan before they get hit with these rates.
Paramedic Callum, 24 and paralegal Kye, 23 spent 12 months squirrelling away the £17,000 deposit needed for the home by working overtime and cutting their spending.
The couple scrapped their favourite regular takeaways, limiting them to once a month, and they swapped expensive days out in London for coastal weekend walks for free.
Callum also bagged £10,000 from working overtime, which went straight towards their deposit pot.
They only had to put down a 5% deposit because they used the Help to Buy scheme, helping them bag a home quicker.
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There are downsides to having a smaller deposit, for example, you may end up paying more for your mortgage.
So it’s really worth do your research before you decide how to buy and whether to use a government scheme.
After starting their search in December 2019, they reserved a plot off plan a year later when it just a patch of mud. They exchanged and moved in November 2021.
Although saved for the deposit themselves, were gifted £2,500 towards furnishing their home by their families, who also bought them essential appliances like washing machines and fridges too.
We sat down with Callum to find out more about how the couple bought their forever house for The Sun’s My First Home series.
Tell me about your home
It’s a new-build three bed detached house, linked to next door’s property by our carports.
They are all double bedrooms. We have a south facing back garden, small front garden and large garage.
The master bedroom has an ensuite bathroom. We have a family bathroom and a downstairs toilet.
We have a kitchen/diner which has French doors that open out into the back garden. There’s a separate dining room with double doors that open into the living room.
Kye has found landscape gardening ideas for our back garden off Instagram which he’s keen to start this spring and summer. We’re looking forward to inviting all our friends and family for barbeques when it’s finished.
We’ve turned one of our bedrooms into a home office for Kye who sometime works at home.
We wanted a new-build because you can see exactly what you’ll get from looking around the showhouse.
The Help to Buy scheme meant we could get a more expensive home using the equity loan.
How much did you pay?
The purchase price was £340,000 and we put down a 5% deposit of £17,000 for it.
We also paid an additional £7,000 for optional extras like getting all the flooring put down, the family bathroom fully tiled, a thermostatic shower fitted and a glass shower door installed.
Hopkins Homes, the developer, turfed the back garden for free as a thank you for me working for the NHS over the pandemic.
We took out a five-year fixed rate mortgage of 1.93% with NatWest over 30 years for £255,000.
Our monthly repayments are £937.
We used a Help to Buy loan of £68,000 which is 20% of the value of our home. It’s interest free for five years.
We’ve worked out that we’ll pay around £60,000 off our mortgage over the next five years so we can remortgage then and repay the government loan.
Hopkins put £500 towards our legal fees as a gesture of goodwill but we saved the deposit up ourselves.
Why did you decide on the location?
I was brought up in Stowmarket, Suffolk, so we were keen to look around the area.
We were searching for our forever home so we gave ourselves lots of time to look for a property.
It was in December 2019 when we started searching, and we reserved our house a year later.
That gave us plenty of time to look around all the different developments upcoming in the area plus wait to see the ones that were planned but construction hadn’t started.
It was luck that we saw this plot. We’d not been able to get an appointment for our first choice on a different site.
When we visited this development, the adviser said they had a new plot not yet advertised. We loved it so we reserved it with a £500 deposit straight away. It was a case of right place right time.
It’s half a mile down the road from my family and close to a country pub with lots of walks nearby.
How did you save for it?
In February 2019, I qualified as a paramedic and started my career with the NHS.
After that we could put a little bit of money aside. We decided to get serious with our house hunt in December 2019 and began putting more money away.
I lived with my mum and dad and paid them £200 a month for rent and bills.
My basic wage plus a 25% allowance for working nights and weekends takes my total salary to around £40,000 a year. On top of that I get lots of opportunity to do overtime.
I do around three to four extra shifts a month and get paid between £1,000 to £1,500 extra for this – which boosted my deposit savings by £10,000.
Kye earns £24,500 as a paralegal. He was paying £450 a month in rent which included all his utilities, council tax and broadband.
He set himself a savings target of £750 a month. To help him meet his goal, he cut back his weekly food shopping budget from £40 to £25 a week saving him £720 over a year.
We both also scrapped our habit of paying for lunch at work. By making our own pack lunches we saved £1,152 a year in total.
Any complications?
It was tough finding a mortgage lender that would take my 25% salary top up into account. Even though I’m guaranteed that payment it doesn’t go down on my payslip as a part of a regular wage.
Some lenders would only take half or 75% of it.
Thankfully we were using a mortgage broker and he searched the market for us to find a lender that would use all of it.
We got a deal with NatWest who were happy to use all the allowance so we could get the mortgage we needed.
How have you furnished it?
My mum and dad had been secretly saving my £200 board every month and gave it back to us for furniture.
That gave us £2,500 to buy a sofa, dining table and six chairs and bedroom furniture.
Kye’s parents bought us all our appliances because they didn’t come with the house. They got us the fridge freezer, washing machine, dishwasher and tumble dryer.
What’s your advice for other first-time buyers?
We gave ourselves a lot of time to make a decision on which development was right for us so I’d say don’t rush into choosing a house.
Use a spread sheet to keep track of your savings. It’s a good way of planning what you’ll put away the next month.
You can use a formula that adds your savings up for you. It’s lovely seeing your money build up.
You can use the spreadsheet to see what you will have in six to 12 months’ time based on your current rate of saving or how much you need to increase it by to achieve a bigger goal. It’s a great motivator.
Here’s how one couple saved nearly half the deposit needed by ditching trips away for their £297,000 first home.
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