How much deposit do I need for a mortgage to buy a house? This article will help you find the answer to this question. Read on.
The decision to buy a house is one of those crucial financial decisions. For many of us, a property is the most valuable possession. But, how much deposit do I need for a mortgage to buy a house?
When it comes to putting down a deposit to buy a house, the more you can save-up, the better, because you’ll also benefit from lower and often better mortgage rates. Having a larger deposit to buy a property can also make things easier in terms of affordability, as it will mean smaller monthly mortgage payments.
What is a deposit account?
A deposit account – like Wikipedia says – is a savings account, current account or any other type of bank account that allows money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank’s books, and the resulting balance is recorded as a liability for the bank and represents the amount owed by the bank to the customer.
Do you need a deposit to buy a house?
In the current UK property market, you’ll usually need a deposit of at least 5% of a property’s value to get a mortgage from a bank. A mortgage lender would then lend you the remaining 95% of the house value. So, if you wanted to buy a £200,000 property, you would need to save up at least £10,000 and borrow £190,000.
How much deposit does a first-time buyer need?
Before looking at properties, you need to save for a deposit. Generally, you need to try to save at least 5% to 20% of the cost of the property you would like. The mortgages with the lowest interest rates are only available when you have a large deposit. So, a 20% or 30% deposit will normally get you a mortgage with a lower interest than a mortgage that lets you have a 5% deposit. Also keep in mind, first-time-buyers will pay no Stamp Duty on the first £300,000 for properties worth up to £500,000.
How much deposit I need to pay for a property in Birmingham?
Selling and buying are complicated and stressful, but with our unrivaled customer service and knowledge of the industry, we will be with you every step of the way. Love Your Postcode™ has become one of the top estate & lettings agents because of how our group pays attention to each client. With us, you’re guaranteed a trusted partner that know property prices in your area better than anyone and employs an experienced staff that anticipates your every need. For example, for an apartment in Mason Way, Birmingham City Centre, B15 2EE with a £200,000 value, considering a 10% deposit, you will need to put on table £20,000 to get a mortgage.
Mortgage calculator
On loveyourpostcode.com website, on every property listing page, you can find our mortgage calculator. Use it to work out how much you could borrow and what kind of deposit you need for a mortgage. *This info on our website does not constitute financial advice, always do your own research.
Use our online calculator to get an idea of how much you could borrow and compare monthly payments. See examples of costs for different mortgages types, payment terms and interest rates.
This information is computer-generated and relies on certain assumptions. It has only been designed to give a useful general indication of costs.
It’s important you always get a specific quote from the lender and double-check the price yourself before acting on the information. We cannot accept responsibility for any errors.
Unsure of what to don and want to talk through your situation? Book an appointment with one of our local area experts or call us on 0800 862 0870.
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