Tembo’s HomeSaver savings account is a bit different to ordinary savings accounts — here’s how it works and how to make the most of it
Tembo has launched a pretty unique savings account that pays a rate of 5.75%, but it requires you to take out a mortgage with Tembo to get the full payout. If you don’t want to buy a house or need to remortgage, the underlying rate is pretty decent, as it has a 12 month fix added on for the first year making it 4.55%. Here’s how the account works and how to get the top rate.
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What is the Tembo HomeSaver?
The Tembo HomeSaver is a savings account that’s designed for those looking to buy a home or remortgage within the next three years. It offers a bonus on top of the underlying rate that you can only get if you choose to take out a mortgage through Tembo within three years of first depositing into the account.
What is the Tembo HomeSaver rate?
The full rate on the account is 5.75%. This is split into three parts:
Underlying rate
The rate on the account is 3% AER variable. This part of the rate can change at any time.
Bonus
Then, there’s a 12-month fixed bonus rate of 1.55%. This part is fixed, so it won’t change within the 12 month period. There’s no condition to getting this bit, you just have to sign up as a new customer while it’s being offered.
Extra conditional bonus
The third part is a bonus of 1.2% that’s only for people who take out a mortgage that’s been arranged by Tembo. So, anyone can get the 4.55%, and to boost it to 5.75%, you need to meet Tembo’s conditions, outlined below.
Featured switching deal
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- Switch bonus£200
- Offer endsUnknown
- Extra bonus£25 Amazon Gift Card
- FSCS Protected? Yes
- Switch bonus requirements Switch using the Current Account Switch Service and close your old account within 60 days of starting the switch
- Deposit requirements Deposit £1,500 in the first 60 days from opening the account
- Direct debits transferred over Set up two Direct Debits before or after the switch from a selected list of household bills
- Existing customers? Can't have held any Santander current account on 1 January 2025
- Restrictions Can't have received a switching bonus from Santander already, offer limited to once per person
- Eligible accounts Open a new or hold an existing Everyday, Edge, Edge Up or Edge Explorer current account
- £25 Amazon Gift Card requirements To qualify for the gift card, you need to complete a full switch using CASS, and make five debit card transactions within 30 days of opening the account
What are the conditions for the Tembo HomeSaver bonus?
To get the extra 1.2%, you need to complete a mortgage or remortgage arranged using Tembo’s mortgage advice services between one and three years of first depositing into this savings account.
Do you have to be a first-time buyer?
No, you don’t have to be a first time buyer to get the bonus on this account, making this a good alternative to a Lifetime ISA for those moving house or remortgaging. You can also use it for buy-to-let purchases.
What if you don’t end up getting a mortgage through Tembo?
If you don’t go ahead with a mortgage through Tembo, either if you don’t choose to get a mortgage at all, or if you get one via another provider, you’ll only get the underlying 3% and the 1.55% boosted rate on top of it, but not the additional 1.2%.
Can you make withdrawals?
You can withdraw from the account, however, any withdrawals before 12 months is up will not earn any of the bonus interest, and will not earn the additional HomeSaver bonus interest, so the rate is 3%.
If you make a withdrawal after 12 months, you’ll be able to withdraw your funds with 4.55% interest (assuming the underlying 3% doesn’t drop). The HomeSaver bonus is exclusive to those that get a mortgage through Tembo, and this is handled differently.
Is it an ISA?
The Tembo HomeSaver isn’t an ISA, this means that any interest you make on your savings might be taxed.
It might be worth weighing up whether you’re better off saving into this account or a Lifetime ISA, or saving into both account types.
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Alternatives to the Tembo HomeSaver
If this isn’t quite the right account for you, you could consider saving into a Lifetime ISA. With this account, you get a 25% boost from the Government on up to £4,000 of savings per year. That could get you a nice bonus of up to £1,000 on top of your savings. Interest you earn is tax free, as well.
However, this bonus is only available to people buying their first home. If you’ve already bought a house, or are looking to remortgage your existing debt, a Lifetime ISA doesn’t offer any advantage over a normal ISA.
The Tembo HomeSaver is a good option for first-time buyers after you’ve exhausted your Lifetime ISA allowance each year, or you can opt for an ISA — we have the full details of the accounts you can use in our guide on how to save for a house.
The other consideration is tax. Higher-rate taxpayers can only earn £500 of interest a year before a 40% tax is applied. That would reduce your earnings from the Tembo HomeSaver to effectively 3.45%, at which point a standard ISA could pay you more, without the restrictions on taking out a mortgage.
Summary: is the Tembo HomeSaver any good?
Zoe’s analysis
This is a great savings account, as the savings rate is only beatable by regular savers, which you’d need to drip feed money into.
However, while it’s pretty decent, it isn’t as good as a Lifetime ISA, which gets you a great 25% bonus on top of your savings, completely unbeatable by a savings account, however this has its own restrictions — if you’re remortgaging or purchasing a buy-to-let, the Lifetime ISA isn’t an option. But if you’re eligible for the Lifetime ISA, the HomeSaver probably isn’t worth considering until you’ve made use of your Lifetime ISA allowance for the year.
However, aside from buying a home, even without the additional HomeSaver bonus, it’s a pretty decent savings account, but you need to remember that the underlying 3% rate is variable, so this rate could drop at any time.
How to get the Tembo HomeSaver
If you’re interested in signing up, you can see all of the full details on the Tembo website. You’ll need to be 18 or over and a UK resident.
