A first-time buyer savings plan starts with one number: the total cash you need on completion day, which is your deposit plus buying costs. Divide that by the number of months until you want to buy and you have your monthly target. For a £250,000 home with a 10% deposit and around £3,000 of costs, that is £28,000, or about £580 a month over four years before any interest or Lifetime ISA bonus.
This guide walks through each step, with tables you can use to sense-check your own plan.
Step 1: Set a realistic price range
Your price range depends on two things: how much a lender will offer and how much deposit you can build. Many lenders cap mortgages at around 4 to 4.5 times household income, with some going higher for certain buyers, and all of them check that the monthly payments are affordable once your other commitments are counted. Use the mortgage calculator to see what a loan would cost each month at different rates, then look at what that buys in the areas you want to live.
Pick a target price and a backup price slightly below it. Planning around the lower figure gives you room if prices or rates move.
Step 2: Choose your deposit size
You can buy with a 5% deposit, but a larger deposit usually unlocks lower mortgage rates and smaller monthly payments. Rates tend to step down at 10%, 15% and 25% deposits, so it can be worth waiting a few months to cross one of those lines.
| Price | 5% deposit | 10% deposit | 10% over 4 years |
|---|---|---|---|
| £150,000 | £7,500 | £15,000 | £313 a month |
| £250,000 | £12,500 | £25,000 | £521 a month |
| £350,000 | £17,500 | £35,000 | £729 a month |
The monthly figures ignore interest and bonuses, so they are a slightly cautious guide. Buying costs come on top.
Step 3: Add the costs beyond the deposit
Plenty of buyers save the deposit and then discover they are a few thousand pounds short. Budget for these from the start:
- Stamp duty: in England and Northern Ireland, first-time buyers pay nothing up to £300,000 and 5% on the portion from £300,001 to £500,000. Above £500,000 the relief does not apply. A £350,000 first home has £2,500 of stamp duty. Scotland and Wales use different taxes and thresholds; check with the stamp duty calculator.
- Conveyancing: solicitor fees plus searches and Land Registry fees.
- Survey: the lender's valuation is not a survey; a separate survey costs extra.
- Mortgage fees: some deals charge arrangement fees, which can be added to the loan but then accrue interest.
- Moving and setting up: removals, basic furniture and the first round of bills.
Step 4: Use a Lifetime ISA if you are eligible
If you are aged 18 to 39, a Lifetime ISA lets you save up to £4,000 a year and the government adds a 25% bonus, worth up to £1,000 a year. The money can go towards a first home costing £450,000 or less, bought with a mortgage, and the account must have been open for at least 12 months before you use it. Withdrawing for any other reason before 60 usually triggers a 25% charge, which takes back the bonus and a little of your own money.
Saving £333 a month into a Lifetime ISA for four years puts in £16,000 and attracts £4,000 of bonus, giving £20,000 before interest. That alone covers most of the 10% deposit on a £200,000 home. HM Treasury consulted in 2026 on replacing the Lifetime ISA with a new First Time Buyer ISA; Lifetime ISAs can still be opened and paid into while that is decided. Our Lifetime ISA guide for first-time buyers covers the rules in detail.
Step 5: Build the monthly plan
Put the numbers together: deposit plus costs, minus anything you already have, divided by the months left. Then split the monthly amount between accounts.
| Example: £250,000 home | Amount |
|---|---|
| 10% deposit | £25,000 |
| Buying costs (no stamp duty below £300,000) | £3,000 |
| Total needed | £28,000 |
| Lifetime ISA over 4 years (incl. £4,000 bonus) | £20,000 |
| Easy-access savings over 4 years | £8,000 (about £167 a month) |
In this example, £333 a month into a Lifetime ISA plus about £167 into an easy-access account reaches the target in four years, a total of £500 a month. Keep your buying costs in the easy-access pot, because some must be paid before completion. The savings goal calculator shows how changing the monthly amount or the deadline shifts the plan.
Step 6: Find the monthly amount
If the target is higher than you can currently save, adjust one of three levers: a cheaper property, a smaller deposit or a longer timeline. Small changes add up. Moving the deadline from four years to five cuts the monthly amount by a fifth.
Automate the saving on payday so it happens before you spend. Couples can each open a Lifetime ISA and both claim a bonus on the same purchase. If you are struggling to get started, a daily savings habit can help; SYM tells you how much to set aside each day and tracks your streak, while your money stays in your own accounts.
Keep the plan on track
Check progress every three months. If you are ahead, consider whether to buy sooner or aim for the next deposit band. If you are behind, decide early which lever to pull rather than letting the date drift. Keep your credit file clean in the year before applying: pay everything on time, avoid new credit applications and make sure you are on the electoral roll. For a fuller timeline, see how long it takes to save a deposit, and for the full list of fees read first-time buyer costs beyond the deposit.
Frequently asked questions
How much should a first-time buyer save each month?
How much deposit do I need for a first home in the UK?
Do first-time buyers pay stamp duty?
Can I use a Lifetime ISA and a normal savings account together?
Is it better to save a bigger deposit or buy sooner?
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