Saving for a Mortgage

Pecker31

Hi so I am looking for a bit of general advise.

Myself and my o/h are looking to set up a savings account for the next 3 years for a deposit for a house.

We are looking for the best place to save with, we also don't want to be able to touch it, without notice

Can anyone advise on what is a good choice? BOI are only offering a solo savings account or else one with instant access to. They also have another one that they give you money back but you must have it saved in a year (we wish)

JTMan

Have a read of these posts: http://www.askaboutmoney.com/threads/savings-best-buys.90481/

Do you have a lump sum to deposit right now? or will you only be saving per month? or both?

Pecker31

JTMan wrote: »

Have a read of these posts: http://www.askaboutmoney.com/threads/savings-best-buys.90481/

Do you have a lump sum to deposit right now? or will you only be saving per month? or both?

Hi JT ~ thanks for reply ~ no we would be saving weekly like a direct debit from both out accounts. Unfortunately no lump sum

Water John

No extra knowledge of where to save but regular saving for a least 6 months to a dedicated acc. You are right, it should not be raided for holidays or some such.

JTMan

Pecker31 wrote: »

Hi JT ~ thanks for reply ~ no we would be saving weekly like a direct debit from both out accounts. Unfortunately no lump sum

Okay, sounds like you need a regular saver account. You could both open individual accounts. If you can handle some hassle, go with the KBC Regular Saver.

RossieMan

Most banks have a dedicated mortgage savings account, some good offers for them too. 10% extra of what you saved if you take a mortgage out with one particular bank.

I'm sure there's similar offers with others. You'll make nothing on the interest, I'd almost ignore the rates it's so poor.

JTMan

RossieMan wrote: »

Most banks have a dedicated mortgage savings account, some good offers for them too. 10% extra of what you saved if you take a mortgage out with one particular bank.

These offers are gimmicks where interest only applies if you take a mortgage with the same bank.

Choose the highest rate for your savings. Choose the lowest rate for your mortgage. Ignore the gimmicks.

RossieMan

Gimmicks, yes. They offer far more than the crappy interest rate.


The rates for mortgages should be the same roughly on all the big banks once they have a look at their rates later on in the year.

JTMan

RossieMan wrote: »

Gimmicks, yes. They offer far more than the crappy interest rate.

These products (BoI are the worst culprits) are gimmicks because they offer a relatively small savings interest receipt in exchange for massive interest payments with the mortgage. Ignore these gimmicky products that are aimed at idiots.

RossieMan wrote: »

The rates for mortgages should be the same roughly on all the big banks once they have a look at their rates later on in the year.

Rates are never the same across all banks. They are large variances and you can guarantee that will continue into the future.

RossieMan

Any bank you recommend then? I've not kept up in this forum, do you work for one of the banks?

Interested in having myself and found the rates crap, not even worth doing. Money under the bed at the moment.

silent_spark

I am also saving for a deposit, but it's likely to be a few more years before I will be in a position to buy (in the Dublin market). So far, I've been transferring monthly savings to a Credit Union account, and I will have circa €50k built up by the end of the year. There doesn't seem to be much value in savings accounts, and the dividend from the Credit Union has been pretty minimal. I was considering putting some or all of the money in National Solidarity Bonds, maybe in sets of €10k. If I need some or all of the money before the ten year term is up, I can redeem some of the €10k bonds without sacrificing all of the interest on any of the remaining ones, while still getting 0.05% on the ones redeemed early. Are there any pitfalls here that I haven't considered? I want to be conservative, as I will need the money intact at some stage. As it's also possible my circumstances will improve in the coming years and I find I'm in a position to buy sooner than anticipated, would it be more sensible to buy shorter term bonds? Maybe some of both? I'm 34, so am coming to this a little late in the game.

For continued regular savings, I will review what's been suggested above - although I like the ethos of Credit Unions, so may stay there if the difference is minimal.

Water John

Spark, I think I wouldn't bother moving TBH.

JTMan

Do not put your money, even some of your money, in a 10 year product, if you think you will need access, at any stage, over the next 10 years. The interest penalty, for early withdrawal makes it pointless if you will need access to the cash.

silent_spark

JTMan wrote: »

Do not put your money, even some of your money, in a 10 year product, if you think you will need access, at any stage, over the next 10 years. The interest penalty, for early withdrawal makes it pointless if you will need access to the cash.

But it's not definite I will want to redeem it early. Would the risk of only receiving 0.05% interest outweigh the potential benefit of the higher rate on redemption at the end of the 10 years? Is there anything that would give an equivalent rate of return, but is more accessible? The bond offers 16% cumulative interest, after 10 years.

silent_spark

Water John wrote: »

Spark, I think I wouldn't bother moving TBH.

For the lump sum, or the regular savings?