Is a 10% deposit going to be enough?

nm123_2

Title says it all really..

Our plans have changed somewhat recently and we're now bringing out search forward (was going to be end of 2010) I don't think we'd be looking to buy until Sept/Oct this year at the earliest, but obviously less time saving = smaller deposit.

Is 10% enough these days?

geordiepaul2001

Yeah 10% is enough.
5% can secure you a mortgage with the Abbey, but you pay around £1500 for an arrangement fee.
With a 10% deposit you could look at a 5 year fix with Natwest (currently 5.99%), or a 5 year fix with the Post Office (currently 6.01%).

Obviously the more deposit, the better the rate you will be offered.

Paul

dougk_2

And remember you will need some extra money for the other costs involved - eg solicitors , moving costs, Stamp duty if applicable etc etc

nm123_2

Thanks guys... I reckon 10% would be about right for the deposit and then we'd have some left over to "play" with (if you can call fees playing!)... 6% feels high

geordiepaul2001

You may get better deals if your looking for a shorter term fix, or you have a local building society which provides mortgage products.

It all depends how much security you want, certainly not a decision to be made by others.

poppysarah

The more the better though.

Scrimp and save like mad!

blunt_crayon

nm123 wrote: »

6% feels high

6% is high compared to the current base rate of 0.5% but not high at all compared to the base rate historically...averaging 6-7%... so think of that, plus interest, and suddenly this offer is a lot more attractive... a plus side to consider is that fixing at a 'low' rate of 6% would protect you from the abnormally high interest rates that many feel are soon to be inflicted by rampant inflation etc. if you can comfortably afford to buy then don't let the 'high' rate of 6% put you off, as you are unlikely to achieve a better rate in the current climate, given that you have only 10% deposit.

best of luck.