How much of a Deposit will I need?
- January 14, 2021
- Phil Wells
Saving for your first property can be a very daunting challenge but ensuring that you have a clear and sensible target will help you get to your target. Most Mortgage providers require a minimum of 5%, but this varies from provider to provider.
Increasing your deposit by as much as 1% can help reduce your monthly mortgage payments. It might also be worth speaking to an independent Mortgage Advisor who can do comparison for you, and show what different deals are available just by increasing your deposit by 1%.
Researching the location that you would like live in will help you gain a better understand of the current market, and give you a better idea how much of a deposit you will need to buy your first home. Using websites like Rightmove or Zoopla can help find the current houses on the market and what sale prices they are current at the websites will also show you how much previous house sales where.
Once you have worked out how much you need to save in order to reach 5% deposit, it is advisable to use a mortgage borrowing calculator to work out how much providers are likely to lend to you. Normally, the less you earn, the smaller the mortgage you will be offered by your provider.
It is also worth researching purchasing a house with a relative, a partner or even a friend. You will need to consider the legal side of this, but it could help you get to the 5% threshold quicker, and even obtain a larger mortgage.