Mortgages can be a confusing topic especially as you move closer to finding your next home. Deposits are no exception to the rule. Our handy guide will walk you through how much deposit you need for a mortgage and provide tips, tricks and access to our calculator to help you along the way.
In the current mortgage market, you’ll need a deposit of at least 5% of a property’s value to get a mortgage. A lender would then lend you 95% of the property’s value. So, if you wanted to buy a £150,000 property, you would need to save up at least £7,500 and borrow £142,500. However, the bigger the deposit you can save, the better. According to research from Halifax, the average deposit put down by those buying their first home in the first half of 2018 was 16%.
It’s generally better to save a bigger deposit. This has a number of great benefits including:
Saving for your mortgage is notoriously difficult. Below are some simple tips and tricks for putting yourself in the best possible position to save for your deposit.
Take a look around this interactive map, find your area and see the average deposit size needed for a property in that area.
Remember this is only an estimate and only considers your income in how much you could potentially borrow. Banks and building societies take into account a number of different factors when calculating how much they will lend to you including monthly outgoings and other debts so the actual amount you can borrow may vary considerably. If you receive an annual bonus this may increase the amount you can borrow.
Mortgage lenders really want to know if you can offer the repayments on your home. Because of this how much you can borrow will be based on a variety of things including your salary (how much you earn), along with your credit score (your financial history).
We always advise speaking to an expert advisor as they can help understand your individual wants and needs and point you in the right direction. Did you know it’s free to book a mortgage appointment? Get in touch with us today.