Mortgage advice - first time buyer

[Captain]

Where are people getting these ridiculous deposit amounts from? You certainly don't need a £100,000 deposit on a £300,000 house.

I'm going through the process at the moment and I'm putting down 5% which on a house value of £180,000 max then I need a £9000 deposit.

In total it will cost me around £13,000 to move out, that's a rough figure which includes solicitors fees, surveyor fees etc but no mortgage broker fees.

 

[BongoHunter]

Where are people getting these ridiculous deposit amounts from? You certainly don't need a £100,000 deposit on a £300,000 house.

I'm going through the process at the moment and I'm putting down 5% which on a house value of £180,000 max then I need a £9000 deposit.

In total it will cost me around £13,000 to move out, that's a rough figure which includes solicitors fees, surveyor fees etc but no mortgage broker fees.

Not all lenders do 5% unfortunately - deposit also can impact the rate they offer you as LTV differs - it's all dependant on where you live and how much of a risk the lender considers you. We scraped around for an extra few K to get to a 15% deposit as it dropped the rate by 0.5% - which worked out to a huge saving per month for us (surprisingly!)

 

[The_Abyss]

Also borrowing the absolute maximum over 30 or 35 years isn't a good idea either. on £200K you would end up paying £100K in interest. which means you would need to sell your £240K house for £341K to make a profit. but if your house has risen by that much then whatever you are buying next has too.

I don't think anyone would disagree that extending mortgage repayment terms and borrowing at a higher rate will cost you more. But I think your subsequent comment about needing to gain £100k in value to make a profit isn't really made in the right context. If the other option was to rent for 35 years at £500 a month then even assuming that £500 never increased it would total £210,000.

Not all lenders do 5% unfortunately - deposit also can impact the rate they offer you as LTV differs - it's all dependant on where you live and how much of a risk the lender considers you. We scraped around for an extra few K to get to a 15% deposit as it dropped the rate by 0.5% - which worked out to a huge saving per month for us (surprisingly!)

This is the real value in saving for a higher deposit - getting access to those lower interest rate deals on lower LTVs makes a massive difference.