Never too young to start saving for a house deposit! Some questions/advice please.

Kenny_D

Hi,

Not that it matters but I'm 22, finished my degree and working full time for over a year and have decided I want to start saving for house deposit with intent to assess the housing market in 2011. I'm lucky enough to live within walking/cycling distance to work so I plan on selling my car. I was hoping to put this straight into a savings account which brings me to my first question:

Savings Accounts: I worked out that I can save in the region of 15-20k between now and january 2011 including the money from my car. I want to set up some kind of direct debit from my current account to a savings account to make sure I stick to my budget. What is the best account to go for? Will I receive much extra on top of putting say 20k into the account in a year?

How likely am I to be able to get a mortgage at 23/24 with a full time job of 2-2.5 years with 20k in the bank? If it makes any difference I have had 2-3 loans from the credit union ranging from 1-3k all paid off on time every month.

What else do I need to consider? Any help, thoughts, suggestions very much welcome as this all seems a bit over my head at the moment but I'm committed now to going for it.

Thanks

johnnyskeleton

GStormcrow wrote: »

Savings Accounts: I worked out that I can save in the region of 15-20k between now and january 2011 including the money from my car. I want to set up some kind of direct debit from my current account to a savings account to make sure I stick to my budget. What is the best account to go for? Will I receive much extra on top of putting say 20k into the account in a year?

Might you need to dip into your savings over this time? If so, go for a lump sum account that has instant access or access on notice. Halifax, AIB, INBS and a few other banks do a good rate on lump sum savings under 10k (see here).

You should bear in mind the relative safety and convenience of whichever bank you choose in addition to whoever pays the best rates.

If you are certain you won't need to dip into them, you can get a 1 year fixed rate from investec (see here). Seems a bit pointless when the halifax on demand account pays a higher interest rate, but if savings rates go down over the course of the year, it might be better to have the guaranteed rate (although it may be that halifax are guaranteeing that the 1st year rate is 3.75%).

For the money you save from your income, get a regular saver account, as these have the best interest rates of all but you have to save a certain amount each month and some have penalties if you withdraw.

You might want to have all these accounts in the one bank so that it is easier for the standing orders to be set up and also for easy withdrawals in case of emergency. On the other hand, it might be good to have the money spread among a few banks for safety and also so that you can ringfence some of the savings as untouchable.

There's a lot of choice out there, and if you are not sure, AIB and Halifax offer a good mix of high rates and actual branch banking (so no filling around with internet accounts etc).

GStormcrow wrote: »

How likely am I to be able to get a mortgage at 23/24 with a full time job of 2-2.5 years with 20k in the bank? If it makes any difference I have had 2-3 loans from the credit union ranging from 1-3k all paid off on time every month.

How permanet is your job? If you are a public sector worker then there is a good chance, otherwise it's difficult to know.

Expect that not all of your 20k will go towards a deposit, because you will be expected to pay fees (e.g. solicitors, surveyor, valuer, admin fees etc) and may have to buy furniture upfront. This could reduce it to c. 15-16k. If banks require an 8-10% deposit then you may be able to borrow up to 150-200k, but again expect the amount you can borrow to be capped by your income x3-5. Hopefully house prices will have dropped to such an extent that this won't be a problem.

GStormcrow wrote: »

What else do I need to consider? Any help, thoughts, suggestions very much welcome as this all seems a bit over my head at the moment but I'm committed now to going for it.

It's a very important decision, so be very careful. Don't buy a small apartment far from work - the myth of the property ladder (that you buy a small apartment, live there for 3 years and sell it at a huge profit to put a deposit on the house you actually want) has been disproved. On the other hand, if you find a property that you really want to live in long term and can afford it, go for it.

Remember that there are a lot of hidden costs to home ownership too, like bin/water/management fees, home insurance, repairs, the impending property tax etc. These should be considered before you work out whether the mortgage repayments can easily be met by you.

Finally, expect interest rates to go up in the short-medium term. How far up they go is hard to say, but a good guide is to look at what you are planning to borrow, and consider whether if interest rates went up 2-3%, would you be able to keep up with those higher repayments?

stepbar

GStormcrow wrote: »

Hi,

Not that it matters but I'm 22, finished my degree and working full time for over a year and have decided I want to start saving for house deposit with intent to start looking at a house around Jan 2011. I'm lucky enough to live within walking/cycling distance to work so I plan on selling my car. I was hoping to put this straight into a savings account which brings me to my first question:

Savings Accounts: I worked out that I can save in the region of 15-20k between now and january 2011 including the money from my car. I want to set up some kind of direct debit from my current account to a savings account to make sure I stick to my budget. What is the best account to go for? Will I receive much extra on top of putting say 20k into the account in a year?

How likely am I to be able to get a mortgage at 23/24 with a full time job of 2-2.5 years with 20k in the bank? If it makes any difference I have had 2-3 loans from the credit union ranging from 1-3k all paid off on time every month.

What else do I need to consider? Any help, thoughts, suggestions very much welcome as this all seems a bit over my head at the moment but I'm committed now to going for it.

Thanks

First off, well done for having the ambition to want to own your own home. Many people of your age don't place a second thought to this. I know when I was your age I didn't and am paying the price now. But I know I'll get there eventually, if it means owning a 1 bed flat so be it.

TBH, it will really depend on what your wage will be in 2-3 yrs time. So lets say you will be earning 30k, then a mortgage of 5 times your salary is possible.

I'm not sure but this could be a question to put to the Banking forum, more so than here. You might get better responces there.

am i bovvered

Some good advice already.... I would just add that it is great to have the ambition, aim high and you will try to achieve that goal.
I bought my home at the age of 23 in 1996 it was the best financial decision I have made.

Kenny_D

Thanks for the encouragement guys, lots there for me to consider. To answer a few questions:

1. I shouldn't need to withdraw from the account until I need to take it all out for the deposit. I have budgeted so I have some cash each month and I also have some money in my credit union account for emergency purposes. I'm living at home so I don't have a lot of unforeseen expenses and can plan my income/outcome pretty well.

2. I'm currently with AIB so I'll definitely look into their various savings accounts. I actually only really use the online banking, try to avoid going to the branch whenever I can so the ability to manage it all online would be pretty handy actually. Perhaps I should head into the bank and have a chat to someone in there about what savings account would suit me.

3. We all like to think our job is safe right but I'm not fooling myself, however I am contracted for the remainder of the year in a great company. I work in a large private sector software company. Due to our line of work the recession has actually seen our business do quite well over the last 2 years and things look set to continue so I'm happy to go for this now keeping in mind my current employment situation. The company has not had to let any of its 500+ staff go and is currently recruiting in small numbers.

4. I have accounted for about 800 repayments per month and I can cope fine if that goes up to 1000.

johnnyskeleton

GStormcrow wrote: »

Thanks for the encouragement guys, lots there for me to consider. To answer a few questions:

1. I shouldn't need to withdraw from the account until I need to take it all out for the deposit. I have budgeted so I have some cash each month and I also have some money in my credit union account for emergency purposes. I'm living at home so I don't have a lot of unforeseen expenses and can plan my income/outcome pretty well.

Fair enough, but I'd still recommend a mix of fixed, on demand and regular saver options. Maybe put most of the money from the sale of the car into a fixed account in another bank/building society so that you can't be tempted by it.

GStormcrow wrote: »

2. I'm currently with AIB so I'll definitely look into their various savings accounts. I actually only really use the online banking, try to avoid going to the branch whenever I can so the ability to manage it all online would be pretty handy actually. Perhaps I should head into the bank and have a chat to someone in there about what savings account would suit me.

You can open up a 7 day notice which pays something like 3.25% up to 10k online. You can also open up an online regular saver which pays about 2% which increases for every year you don't make any withdrawals. However, it's fairly flexible as a regular saver in that you can lodge a basic €20 per month and then top this up up to €1k depending on how much you want to save that month.

Both of these accounts can be opened instantly online. You should look around to get the best deal, but if you wanted a quick and easy option now it's worth looking into. You could always open the accounts and change over if you see a better deal.

GStormcrow wrote: »

3. We all like to think our job is safe right but I'm not fooling myself, however I am contracted for the remainder of the year in a great company. I work in a large private sector software company. Due to our line of work the recession has actually seen our business do quite well over the last 2 years and things look set to continue so I'm happy to go for this now keeping in mind my current employment situation. The company has not had to let any of its 500+ staff go and is currently recruiting in small numbers.

Sorry to be the bearer of bad news, but if current lending practices remain the same, you are not likely to get a mortgage if you are employed on a contract basis. The banks usually require that you are in permanent full time employment. However, perhaps by this time next year the company will offer you a permanent position. Certainly you should be angling towards this if possible.

GStormcrow wrote: »

4. I have accounted for about 800 repayments per month and I can cope fine if that goes up to 1000.

I take it then you will be looking for a mortgage in the region of 175k. This is not a particularly large amount relative to what was being taken out over the last few years, but it is important that you recognise the actual amount you will be borrowing, and not just look at the monthly figures. That is to say, if you're ever stuck, will you be able to cope with that level of debt?

Best of luck.

The_Conductor

Other pre-existing loans may have a greater impact on your borrowing potential/capacity, than having your deposit saved up. It may (you should check this out- I am not saying so for definite) make more sense to make accelerated payments to clear all other debt than to start saving in parallel to paying off pre-existing debt. Also- when you factor DIRT etc into the equation- you'd be doing quite well to get an equivalent interest rate to that which you're currently paying on your pre-existing debt.

Spending an hour or two with a personal financial advisor might be money well spent in this case.

Its a refreshing breath of fresh air to come across people like you- who actually seem to be grasping their finances in both hands- rather than taking the ostrich approach. Do please update this thread and let us know how things work out for you.

Guell72

My brother did something similar to you OP. He saved all they could for 3 years. 2 weeks ago he drew down on his mortgage. He said it was a very easy process, despite everyone telling him he would not get a mortgage as a contractor.

He went back to live with the parents for the last year too - might be an idea. You can save more that way.

He works as a contractor in a software company too. Probably one of the few sectors to escape the downturn.

The_Conductor

Guell72 wrote: »

He works as a contractor in a software company too. Probably one of the few sectors to escape the downturn.

It didn't escape the downturn- seriously it didn't. Very few of our contractors had more than 8 months work last year, and some as few as 3 or 4 months.......

It really depends on specific skillsets- things that were all the rage a few years ago- such as Java, are not the be-all and end-all that they once used to be.

Kenny_D

Sorry, I probably phrased that wrong. I am in a full-time permanent position in the company. I was referring to my yearly review where my contract with the company is renewed. I assume this is normal for most people in the software industry. If anything I'm likely to go up a pay level in October.

I've no pre-existing loans. I've always tried to clear my past loans as soon as I had some extra money. My loans are usually short term and paid off fast to avoid paying extra interest.

Yup, I'd be looking to borrow between 180-200k over 25 years depending on what I can save and what I'm looking for.

If worse comes, yes I'll be able to cope with the debt through the help of my parents and the strength of their assets.

Thanks again everyone for the advice, I'll keep this updated

Guell72

smccarrick wrote: »

It didn't escape the downturn- seriously it didn't. Very few of our contractors had more than 8 months work last year, and some as few as 3 or 4 months.......

It really depends on specific skillsets- things that were all the rage a few years ago- such as Java, are not the be-all and end-all that they once used to be.

Im in the sector myself. The fact that myself, in a management position, and many other people i know in management positions too, are finding it very hard to get developers with any level of experience and have to raise the salaries to keep those we have, tells me that things are rosy in IT land. Bar support jobs, which are taking a hammering, but it would be a stretch to call support jobs IT jobs.

I think the OP will be safe for a while.

johndaman66

First of just to mention fair play to you GStormcrow for giving your future such careful thought and consideration at a young age and considering and saving towards what probably may be one of the most important if not the most important decision of your life. I know its not easy to give up a car when you are used to having your own wheels for some time so all due respect to you for that and hope everything goes ok regarding the commuting and travel. Slightly off topic but do bear in mind also that after a certain amount of time any no claims bonus that you have built up on your motor insurance will also expire. This is only a consideration if you intend to take up driving again in the future.

I think reading through the posts the quality of the advice and potential pitfalls that people are pointing out are very good and thorough generally so far. Just a point or two to mention though as I don't think they were mentioned thus far or else only touched upon.

Do consider at 22/23 years of age you are very young in the scheme of things. Its a young age to be settling down. Granted nobody knows the future for sure but I'm sure many would agree that we can see house price declines for the next few years and certainly shouldn't expect to see a rise in house prices in the near future. Jobs for life are virtually unheard of in this day and age. If a new and better employment prospect for you were to surface in the other side of the country in a few years time it may prove extremely difficult or even impossible to up sticks and sell your house, particularly and God forebid you were to find yourself in a negative equity situation. I am now 28, left college at 22 and am in my third job since (all in completely different parts of the country). For this reason among others renting has being the most attractive proposition for myself thus far. Furthermore I have a friend at work (a couple of years older than me) who is very eager to and would jet of to Australia for six months or a year in a fit but can't as he needs to repay the mortgage and absolutely no guarntee the job would remain open for him when he comes back.

Just to mention also that interest rates are at the moment histicorally low. Whatever about house price declines you can be sure and certain that interest rates will go up in the medium to long term or even in the short term the way things are looking at the moment. Don't base your mortgage repayment figures on current interest rates as such would be a foolish exercise. Double or even triple current interest rates and you will have a clearer picture of what you could expect your mortgage repayment rates to be.

Also interest rate hikes would have the affect of ultimately pushing house prices down further. Simple economics dictates that as the cost of borrowing increases for home buyers that less people will enter the housing market so long as other factors remain relatively constant. Furthermore people already struggling making mortgage repayments with unemployment etc may end up defaulting on their loans to such an extent that repossessions become widespread. Given that supply needs to meet demand somewhere you could potentially be looking at further major price drops. Don't assume the bottom of any curve will have being seen on or before January 2011 and I would suggest you totally ignore any thoughts of upward spirals to this curve for the next number of years. Are you the sort of person who wouldn't mind buying at a certain price and then six months down the line see the house next door being sold for 20k or 30k less than what you paid? I know it would eat away at me, for a fair while at least.

Sorry if I come across as the grim reaper in my post! It is a major decision just want to mention what I would consider major pitfalls as and aside from the advantages to buying a house now or indeed at any stage. I too am saving all the time towards a house but don't think I'll be buying as soon as January 2011 as I feel prices will still be declining then unless something absolutely dramatic happens in the meantime, which I don't hold out any hope for. Its not an easy call to make and you hear so many conflicting opinions. But as it stands I feel that house prices need to and will drop considerably further before they become relatively affordable, certainly around this neck of the woods anyway.

DJDC

Buying a house in your early 20s is crazy in my opinion and something uniquely hard-wired into a significant component of the Irish population, primarily due to a number of historical reasons. Anchoring yourself to a country with some of the worst growth prospects in the developing world doesn't exactly sound like a great move. I could give you a whole host of reasons why you will lose it out in the long run from missing out on new cultures/perspectives to lowering your future potential earnings. But it seems for many Irish people, house buying at a young age is something where basic logic doesn't apply.

Victor

Shop around. Several of the banks are looking for regular saver as opposed to lump sum savers.

SLUSK

Why the hurry with getting a house? Have you made a proper cost benefit analysis? Will owning a house be cheaper than renting it? Also consider when something breaks down in the house the landlord has to fix it but if you own the house, this will be an expense that you will have to pay out of your own pocket.

Moonbeam

You have the right idea save,save,save!
If you have some savings and a permanent job and earn enough then there is no reason that you will not get a mortgage.
Though if you earn 20k and want to earn a 200k house there is no chance if you earn 40k and want to buy a 150k house there is a good chance.
I was around your age when I bought my house and have never regretted it.

Kenny_D

DJDC wrote: »

Buying a house in your early 20s is crazy in my opinion and something uniquely hard-wired into a significant component of the Irish population, primarily due to a number of historical reasons. Anchoring yourself to a country with some of the worst growth prospects in the developing world doesn't exactly sound like a great move. I could give you a whole host of reasons why you will lose it out in the long run from missing out on new cultures/perspectives to lowering your future potential earnings. But it seems for many Irish people, house buying at a young age is something where basic logic doesn't apply.

You make far too many assumptions and generalisations here.

I was born here and all my relations and friends are here. I never said I intended on living here for the rest of my life. I want to get my roots established here first so I'll have somewhere to come back to if/when I do decide to travel. I've every intention to travel before my 30's, getting the house out of the way early means I'll have somewhere to come back to. I may end up trying to rent to cover the mortgage and move abroad. I know people who have done this living in australia. Nice to know they have a house in their home country to come back to.

We are in the midst of a global recession, does it not make sense to make sure I have good foundation and a fall-back plan before I think about packing up and heading abroad to a new country where there's no guarantee things will work out. I'm in a job I'm happy in, that pays well and is a nice 25 min walk to work which means I can live at home and actually save the money right now to think about this. My job also has offices and customers around the world and there are travel opportunities which I'm hoping to take advantage of in a few years (one of my team members is working in vancouver at the moment).

I understand what you're saying might be true for some people but given my circumstances I dont agree.

Sure this country is expensive and has a lot of flaws but at the end of the day I'm Irish and I'll miss this place if I move abroad so I'd like to have my own place here.

Can anyone recommend a good financial advisor? I don't want to rush into making any rash decisions and want to look at this from all angles/possibilities

dan_d

OP I don't have much advise on the financial advisor front, but I will say this. It doesn't matter a damn how young you are, or what you're saving for. Keep saving. A lot of the problem we're in now was brought on by the "because I'm worth it attitude" part of which was "sure I'm young there's loads of time for that". I've got a mortgage and I'm saving like nobody's business. I saved when I was living at home too, "just in case". I'm 27 and I've been paying into a pension for the last 3 years aswell. That probably falls under the category of "what the hell" for most people. But it's money I'd never be able to buy back in later years. Doesn't matter what industry you're in - just save all you can, while you can afford it.
Anyway, keep saving. For whatever. There's loads of advice on websites right now. I don't know how good or bad it is, but I have heard a guy called the money doctor - not sure of his exact name - on the radio once or twice and he offers advise on stuff like this. Apparently he's written a book - if you google him, you'll probably get it. Again I'm not sure how good it is, but it might be worth looking in to.
Best of luck , and you've a great attitude.:)

Firetrap

Good on ya OP for wanting to save. Hopefully you'll buy your house at a time that's right for you. Even if you don't buy now, it's no harm to have savings. I just wish I'd had the presence of mind to put a few bob aside when I was your age

stepbar

GStormcrow wrote: »

You make far too many assumptions and generalisations here.

I was born here and all my relations and friends are here. I never said I intended on living here for the rest of my life. I want to get my roots established here first so I'll have somewhere to come back to if/when I do decide to travel. I've every intention to travel before my 30's, getting the house out of the way early means I'll have somewhere to come back to. I may end up trying to rent to cover the mortgage and move abroad. I know people who have done this living in australia. Nice to know they have a house in their home country to come back to.

We are in the midst of a global recession, does it not make sense to make sure I have good foundation and a fall-back plan before I think about packing up and heading abroad to a new country where there's no guarantee things will work out. I'm in a job I'm happy in, that pays well and is a nice 25 min walk to work which means I can live at home and actually save the money right now to think about this. My job also has offices and customers around the world and there are travel opportunities which I'm hoping to take advantage of in a few years (one of my team members is working in vancouver at the moment).

I understand what you're saying might be true for some people but given my circumstances I dont agree.

Sure this country is expensive and has a lot of flaws but at the end of the day I'm Irish and I'll miss this place if I move abroad so I'd like to have my own place here.

Can anyone recommend a good financial advisor? I don't want to rush into making any rash decisions and want to look at this from all angles/possibilities

I'd be happy to throw you a bit of advice (100% without having any bias towards my employer, for that I can guarentee). I'm 1 away from the QFA.

sham69

Fair play OP.
I wish I had your determination when I was your age.
I am almost 35, renting for the past 4 years with partner and 2 kids and little or no savings.
Having kids has changed my view on the property market and I gues I just want a family home and want to avoid moving the kids from a to b and different schools etc.
We have rented 2 properties in this timeframe and both properties have been of poor standard which is another reason we have made this decision.
We are moving in with the other half's mother for approx 2 years.
I have already started clearing my small debts and have started saving.
I reckon we will have 20-25k in 2 years.
It is going to be tough as I love my own space and I know that as much as I am told to treat the house as my own etc I will not be very comfortable there.
I am doing it for the kids and am hopeful that in 2 years we will have our own house.
Best of luck with your challenge, hope it works out for you.

Guell72

sham69 wrote: »

Fair play OP.
I wish I had your determination when I was your age.
I am almost 35, renting for the past 4 years with partner and 2 kids and little or no savings.
Having kids has changed my view on the property market and I gues I just want a family home and want to avoid moving the kids from a to b and different schools etc.
We have rented 2 properties in this timeframe and both properties have been of poor standard which is another reason we have made this decision.
We are moving in with the other half's mother for approx 2 years.
I have already started clearing my small debts and have started saving.
I reckon we will have 20-25k in 2 years.
It is going to be tough as I love my own space and I know that as much as I am told to treat the house as my own etc I will not be very comfortable there.
I am doing it for the kids and am hopeful that in 2 years we will have our own house.
Best of luck with your challenge, hope it works out for you.

We got a 35 year mortgage in 1999 and overpaid over the years. Had it all paid off last year after just under 10 years. Its great now not having a mortgage or having to rent at the age of 38. And when people find out i have a house they act like they feel sorry for me. :rolleyes: I suppose people think that everyone who owns a house is in debt up to their eyes.

Unusualtrend

Hello contributors,
Would just like to say, very informative thread for people wishing to take advantage of the current economic trends to take that formidable step onto the property ladder. I am in a very similar position to GS in that i am 22 and just starting out on the path to saving for a mortgage deposit for my first property. The difference between our situations is that, I am in the public service which will benefit me when applying for a mortgage for reasons everyone is well aware of. I have educated myself on the ins and outs of the mortgage system, which everyone knows is no easy feat, and i must say that the advice given here is very accurate (which for blog sites, honest informed advice is seldom found). To the nay sayers that have spoken against people sub 30 yrs purchasing homes, claiming it is an ingrained knee jerk reflex for Irish people to purchase a fixed abode as soon as they begin in full time employment, I say, Switch On! Owning a property is an investment not a commitment to end all aspirations they had for their lives. Anyone purchasing a property now is seeing a golden era in the market with a window to make some serious cash in the future. I have many friends that purchased homes & Apartments in the age of the, now thankfully extinct, 100% mortgage for exassperated amounts that have now left them on the bread line (& in some cases below) with very little, Financially, to show for it as a result of negative equity. Anyone willing to notice market trends at the moment will see an ideal investment oppertunity to gain your first property without the pitfalls of recent years. If you purchase wisely you will not experience the harrowing experience of Negative Equity & Crazy exaggerated property prices. You will also have a property that in the future (taking into consideration you watch for the elusive "bottoming out" of the property market, and choose wisely), will harbour a return . A property should be looked at as an Investment not a Ball and chain. The options available to an individual who Purchases a home and wishes to travel, are lucrative and plentiful. Rental prices since the collapse in the financial markets have fluctuated and fallen but they reached their basis quickly, rental prices on the market now, are not predicted to fall further by a great margin. Due to people previously that were considering purchasing a home or were in the financial standing to purchase a home are now not so secure, are remaining on the rental market, this looks unlikely to change according to economic analysis of the market. To conclude, anyone who has made big on property, bought in recession - sold in boom, the risks are minimal compared with eventual gains. If you have the financial means, security and savvy, save hard, buy lean, secure your financial future and leave the nay sayers to the wayside to sit and speculate.

Milk & Honey

As someone who saved money during the recession of the 80s when I was aged between 21 and 25 and then bought a house, I would strongly advise young people to save. My house was paid off entirely after 17 years, having risen over 20 fold in value. Other people my age were only "getting on the ladder" when I was virtually mortgage free, with repayments down to half a weeks wages every month.

Tech3

Fair play OP, I would throw whatever capital you have at the moment into either a lump sum deposit account or just a regular saver. There is some good interest rates around for saving accounts and should increase in the next year or so. I would advise against investing if your set on reaching your goal unless you know what your doing.

Also house prices look to be decreasing still so holding out for a few years may result in a lesser mortgage taken out. If you like to keep an eye on property drops to see the way the market is going over the next few years I would visit this website from time to time:

http://www.collapso.net/index.html

billybigunz

Guell72 wrote: »

We got a 35 year mortgage in 1999 and overpaid over the years. Had it all paid off last year after just under 10 years. Its great now not having a mortgage or having to rent at the age of 38. And when people find out i have a house they act like they feel sorry for me. :rolleyes: I suppose people think that everyone who owns a house is in debt up to their eyes.

You were just a bit lucky though in fairness that your mortgage coincided with so much inflation and wage increases.

rightwingdub

I'm 30 myself and I'm glad I didn't buy a mortgage in the last 5 years otherwise I'd be up to my neck in negative equity but fair play to the OP for having the ambition to buy at such a young age, I do personally think house prices have further to fall to be quite honest, by at least another 20%, the housing market is still over priced.

To the OP I'm glad you have such a sensible attitude towards saving, a lot of Irish people lack such basic common sense that you seem to have in abundance, myself I over €20k in savings in the bank and that will be used on a deposit on a house hopefully in 2012, I'm sharing with 3 others in rented accomadation at the moment and because I share with others instead of living on my own it means I save quite a bit of money each month.

I have personally rules on taking out a mortgage though, I wouldn't take out a mortgage more than 4.5 times my salary and secondly I'd put down a minimum 10%, ideally I'd be aiming for a 15% deposit, I tend to be quite conservative when it comes to mortgages.

Amhran Nua

Unusualtrend wrote: »

and leave the nay sayers to the wayside to sit and speculate.

I thought it was speculators that got us into this mess!

In purely personal financial terms OP, house prices are still falling and will continue to do so for a few years yet. Meanwhile, your savings will be increasing. Both of these factors converge on having a larger deposit for a cheaper property, which means you will be paying less in interest over the lifetime of the mortgage. If you save 20k more, bringing it to 40k deposit, and the property you were looking at drops 10% from say 200k to 180k, thats 60k you don't need to pay interest on, which adds up to quite a tidy sum of money over the years.

Also keep in mind that while you have saved the money, you have options - you can emigrate or move around as it suits you. I'd hold off as long as possible or at least as long as seems reasonable, you'll end up saving yourself a six figure sum by doing so.

Kenny_D

I guess I should provide a bit of an update. I've decided to hold off for a little longer and continue to save. I've opened up two seperate savings accounts with standing orders and am putting away about 1200 a month now. I'm still hoping to buy in the next few years but I'm hoping to need a much lower mortgage if I can keep saving. A big thanks to everyone who has contributed so far, it has all been interesting and helpful.