How to save for a home of your own

How to save for a home of your own

Representative example: for a mortgage loan with immovable destination of EUR 170,000, fully secured by a mortgage inscription, with a term of 240 months at a fixed interest rate of 5.32% and an annual percentage rate of 5.67%, you pay 240 monthly repayments of 1,140.30 euros, a loan organisation fee of 500 euros, notary public's fees of 4,160.97 euros and a total repayable amount of 273,671.69 euros.

Does the thought of having your own home seem like a financial impossibility? If you're well-prepared, it doesn't have to be. 

Saving for your future home

When you buy a house, you need to be able to put up some of the cost yourself. The more capital you have available from the outset, the more choice you'll have on the property market.

Whether owning a home has been your goal for some time, or you're not so sure if it is, building a capital base now is never a bad idea. Saving is always a good idea no matter what.

How much savings do I need to buy or build a home?

What your home will cost you comes to more than just the actual purchase price. There are other costs to bear in mind as well, such as notarial charges, mortgage fees and, if you're building a house, VAT.
A good general rule of thumb is 20% on top of the purchase price.

Savings products with tax benefits

You could opt for a savings product with tax benefits to save for your future home.

This could be a (class 21) savings insurance plan. Your savings pot can be used to pay for your loan balance insurance (i.e. mortgage cover life insurance) when you take out a home loan with us.

The amounts deposited before you took out your home loan and after the last repayment can be included in your tax return and qualify for 30% annual tax relief.

If you end up deciding to rent instead and you don't need a home loan, you can always put the amount you've saved towards your pension instead.

You can also use the savings pot in a pension savings insurance plan to pay for your loan balance insurance (i.e. mortgage cover life insurance) when you take out a home loan with us.

You can even continue to benefit from savings-related tax breaks during the period you pay off your home loan. The only thing you have to do is include the deposits in your tax return, which will entitle you to 30% annual tax relief. 

Classic savings products

As well as saving to cut your tax bill, you can also use more classic methods to save larger sums with a view to accruing capital for yourself to get you and your plans started.

If you prefer to play it safe with your savings and/or you're already planning to buy your own home within the next five years, saving automatically at regular intervals is the way to go. This is a highly effective way to build up the capital you need to get started.

Systematic investment

If buying your own home is still very far down the road, building up the money for it through an investment plan is well worth considering. With systematic investment, you automatically invest a certain sum of money at regular intervals. It's precisely this regularity that gives you more chance of a higher return. Your investment is spread over time and is less dependent on prices at one particular moment.