MOVING ON UP
Thrifty couple who bought first home age 23 plan to be mortgage-free by 40
Abigail Davey, 24, and her fiancé Jeremy Blackman, 24, bought their first home - a £187,500 three-bedroom house in Devon - in August last year
THRIFTY couple who bought their first home aged 23 are now planning to pay off their mortgage before they hit 40.
Abigail Davey, 24, and her fiancé Jeremy Blackman, 24, bought their first home - a three-bedroom house in Devon - in August last year.
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The average first-time buyer is now 33 years old, meaning the dream of being mortgage-free is often only reached much later on in life.
But, thanks to some hardcore saving, many younger people are managing to get on the property ladder well before then - with some keeping up their frugal habits in a bid to pay off their home loan.
Abigail and Jeremy successfully bucked a national trend which has seen the average age of a first-time buyer increase steadily over recent years as house prices have shot up across the country.
The pair, who have been together almost five years, managed to buy their three-bedroom semi-detached house in Devon for £187,500 by supercharging their savings with a Help to Buy Isa.
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These savings accounts get you a 25 per cent bonus from the Government on money you set aside for your first home.
While you can’t open these accounts any longer, if you already have one you will still get the bonus. Meanwhile, new savers can get the same boost using a new Lifetime Isa, into which you can save up to £4,000 a year.
Abigail and Jeremy set up Help to Buy Isas within days of the scheme being launched in 2015.
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They bagged accounts with Halifax that paid 5 per cent interest and each got a hefty £1,200 bonus from the Government when they bought their house after saving nearly £5,000 each into their accounts.
Abigail said: “House prices were going up so much, we didn’t know how we would ever manage to buy.
"A Help to Buy Isa seemed like a great way to top up our savings – the bonus we got covered our Stamp Duty and solicitor fees.”
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Savvy Abigail, who is a midwife, further boosted her savings by opening up several different current accounts that paid high rates of interest and rewards.
She set up the accounts so they would transfer money into each other every month to meet the criteria needed to get the rewards.
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a grim task but there are schemes out there to help first-time buyers own their own home.
Help to Buy ISA - It's a tax-free savings account where for every £200 you save, the government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move.
Help to Buy equity loan - The government will lend you up to 20 per cent of the home's value - or 40 per cent in London - after you've put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime ISA - Another government scheme that gives anyone aged 18 and 39 the chance to save tax-free and get a bonus of up to £32,000 towards your first home. You can save up to £4,000 a year and the government will add 25 per cent on top.
Shared ownership - Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you're restricted to specific ones.
"First dibs" in London - London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative - A government scheme that will see 200,000 new-build homes in England to be sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest .
She said: “Each account didn’t pay much but over a year those small amounts added up.”
The couple, who recently got engaged managed to put down a chunky deposit of 25 per cent.
Abigail says: “We knew the more we could put down the better interest rate we could get and the lower our monthly repayments would be.”
They secured a five-year fixed rate mortgage with Virgin at 1.99 per cent.
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Crucially, it doesn’t charge them for making overpayments up to 10 per cent of the total they owe on their mortgage, something they are taking full advantage of.
Instead of just making their monthly repayment of £518, Abigail and Jeremy are paying off a whopping £900 a month – an overpayment of £382.
They estimate it should shave around 12 years off of the 30-year mortgage term if they can keep it up.
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Abigail said: “The quicker we can repay the less interest we’ll pay.
"Being mortgage-free would be a dream so anything we have we are just putting back into the house.”
To earn some extra cash Abigail keeps her eyes peeled for bargain pieces of furniture, which she can upcycle and sell on.
MOST READ IN PROPERTY
The pair also make regular use of cashback website TopCashback to earn money back on purchases they make online – Jeremy recently got £50 back on an Aviva insurance policy while Abigail has earned £430 from various purchases over the past 18 months.
Abigail says: “We have both had part-time jobs since we were 14 and went into full-time work at a young age – this was a life of savings put down in one go but it was totally worth it.
"We love having our own home, it’s given us all the independence we wanted.”
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