5 Top tips for 18-year-old and how to get a £5000 FREE from the government towards your house deposit!
5 Top Tips for 18-Year-Old School Leavers and How to Get a £5000 FREE from the Government Towards Your House Deposit!
Ewan, who recently joined us on work experience, wrote this comprehensive guide to help other 18-year-olds navigate their financial future.
1. Start Building Your Credit Early
If you want to get a mortgage one day, you’ll need a decent credit score. Most young people don’t think about this, but it matters. Try to get a basic credit card (maybe from your bank), spend a bit each month, and pay it off in full. Don’t go mad with it- it’s about showing you can borrow sensibly. Lenders want to see you’re reliable.
2. (BEST TIP) Open a Savings Account (and Actually Use It)
Saving for a deposit feels miles away at 18, but even small amounts help. Open a proper savings account or a Lifetime ISA- if you’re planning to buy a home in a few years, the government will chip in 25% of what you save; you need to wait 12 months before you can withdraw, though.
That’s free money, basically. You don’t need to put thousands in straight away; you can open it with £1 to get started, and then the 12-month clock starts straight away! See more below:
3. Get a Steady Job (and Stick With It)
When it comes to getting a mortgage, lenders like stability. If you hop around jobs every few months, it doesn’t look great. Try to build up at least a year of pay slips with regular income—part-time or full-time, doesn’t matter- just make it steady. Self-employed? You’ll need a bit more paperwork, but it’s doable.
4. Don’t Get into Unnecessary Debt
It’s tempting to get things on finance- a new phone, car, or clothes- but debt adds up fast. If you’ve already got a loan, fair enough, just keep it under control. When lenders work out how much you can borrow for a mortgage, they look at your outgoings, so less debt = more borrowing power later on.
5. Understand How Mortgages Actually Work
Before you dive into owning your own home, take time to learn what all the jargon means—things like “interest rates”, “loan-to-value”, “fixed-rate vs. tracker”—it’ll all make more sense when you're actually house hunting. The Mortgage Dog has a load of guides and a First Time Buyer series you can use; check out the links above. Speak to an adviser to work out how much you can afford.
BEST TIP - Continued
Right, so a Lifetime ISA — or LISA — is basically a savings account that gives you free money from the government to help you buy your first home (or save for retirement).
If you’re between 18 and 39, it’s 100% worth looking into — especially if owning a home is one of your goals.
How It Works (Simple Terms)
You can put in up to £4,000 a year
The government adds 25% on top
So, if you save £1,000, you get £250 free
Save £4,000? (£333.33 per month) You get £1,000 bonus that year
That bonus gets added every year you save — and it’s not a loan; you don’t have to pay it back.
How to get £5000 FREE from the government towards your house deposit?
So, if you start saving the maximum amount from age 18 for 5 years (when you are ready to buy your first house at age 23) that would be £20,000 and then the government will give you a free £5000! Meaning your total deposit will be £25,000.
Be aware that there’s a penalty for taking money out of a LISA if you’re not putting it towards a deposit.
Minimum Holding Period: Your LISA must be open for at least 12 months before you can use the funds to purchase a property, but even if you think you are years away from buying a house, you can open it with just £1 to get started and when you are ready to start savings the 12 month clock would have already started!
When NOT to use a LISA
If you are looking to buy a house within 12 months – there will be penalties to withdraw early and it could cost you.
If you would like to book in with one of the advisers for a mortgage appointment or just get some initial advice, contact the team!
Your home may be repossessed if you do not keep up repayments on your mortgage.
