8 Steps on How to Save For a House That Actually Work

No matter where you are in the process, buying a home is a real experience! You will be dealing with banks and meeting brokers.

You will have to disclose information about every little aspect of your finances from your income to your expenses. In this guide we want to help you learn:

So, how do you save for a house?

If you have plenty of time, the best way to save money is to buy funds or stocks. Historically, they have had a development of over 8 percent per year. Here, however, it is important to point out that this applies to long-term savings. If there are only a few years left until your desired house purchase, it may be better to save with lower risk through mixed funds or fixed income funds.

To be able to save as much as possible, it is good if you have good routines for your savings and that you reduce your expenses in general.

You can start from how much cash you need to calculate how much money you need to save for your house.

The average price of a villa in most counties is between 200 and 500 thousand dollars. Let’s assume that you intend to buy a house that costs 300 thousand dollars.

In other words, you need to save up for a cash investment of at least $45.000.

It is a large sum of money that needs to be saved.

Sure – it is possible to take out a private loan for the cash investment, but it is best if you manage to save some of the money yourself.

My top 8 steps on how to save for a house that actually work:

1. Save in funds or stocks

You get almost no interest on a regular bank account anymore, not even if it is a lock-in period.

You get the best return by saving in funds or shares. It does not really require any prior knowledge to save money in funds.

Choose with advantage cheap and broad index funds.

A US fund and a global fund are actually enough to get well-diversified savings. If you have knowledge of the stock market, you can buy shares, but it requires you to familiarize yourself with the stock market a little more.

Regardless of whether you save in funds or shares, this presupposes that the house purchase is at least five years ahead.

If it is imminent, mixed funds or fixed income funds may be a better choice.

2. Be smart and buy a little at a time

First and foremost, you should think about which home you are looking to buy and where it should be located.

A home outside the city center is always cheaper than one in the city center.

Can you imagine first buying a home on the outskirts of town, continuing your savings and then moving closer to the center?

If you are looking for an apartment in a small town, you may not need to save very long at all if you plan to borrow at 85% of the cost of the home.

3. Calculate how much you need to save

Calculate how much you want to borrow and how much cash you need to save.

Keep in mind that a larger cash investment means a smaller loan-to-value ratio, which can feel good in the future.

4. Open a savings account

Open a savings account. If you have no money saved, you must first save around $1000 in a savings account and then you should transfer them to a fixed interest account where the return is much better.

Have a savings account next to it that you use for monthly savings.

5. Reduce expenses

Reduce your cost of living. See if you can save more money in your everyday life, perhaps by selling things you do not need.

Be careful with all kinds of expenses and expensive habits. A coffee in town every day costs a lot in the long run.

Subscriptions to streaming services and magazines as well.

It is often possible to find cheaper alternatives or skip the cost altogether.

6. Motivate yourself

Set smaller savings goals regularly.

This will motivate you to continue fighting against your highest priority right now – your first home purchase.

7. Share a home

See if you might be able to share a home with someone else while you are saving.

Maybe you can move in with a close friend or family member for a while so you can really cut down on your expenses.

8. Do not give up!

Hold out and see the light in the tunnel.

Do not stop fighting even when it attracts the most.

Saving for a large cash investment can sometimes feel extra difficult, but it will pay off when you stand there with the keys to your first home in hand.

What does it mean to save for the house purchase?

A home purchase is in most cases a large investment in the private financial level. There are few who can or want to buy a villa entirely with saved money.

When you talk about saving for a house, it is therefore mainly about saving for the cash contribution.

In America, it is the law that the cash contribution must be at least 20 percent of the house price. Of course, it is positive if you can save more money than the mandatory 20 percent.

For example, saving 40 percent of your cash investment instead provides several benefits.

You get a lower monthly cost on the loan and have room to extend the mortgage in the future, for example if you want to renovate.

In addition, the amortization requirement is reduced to 1 percent if the loan-to-value ratio is below 70 percent of the value of the house.

If it is below 50 percent of the value, there is no requirement to amortize.

That’s how much you have to pay in cash

The cash contribution for a home obviously varies depending on how much you borrow and how much the home costs.

Of course, you do not need to borrow up to 85% of the cost of the home, but you choose whether you want to borrow maybe 50% or more.

The more money you have saved, the less you need to borrow and that is always positive.

So the very best thing is to save up for so much of the cash investment on your own so you do not have to borrow too much.

Of course, this is not the easiest thing to do, especially if you have not started saving for housing in good time.


When trying to save money for a home, you may feel overwhelmed.

Do not feel that way! Instead, just open a savings account for your home purchase and start saving a little here and there.

You may have to make big changes, absolutely.

But even the smallest changes can help you save money for a house quickly and painlessly – you will move into your new house faster than you think!










This article has been reviewed by our editorial board and has been approved for publication in accordance with our editorial policies.

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