calculating percentage of deposit

free4440273

forgive me if this is a silly question. if a house costs 400k and i have deposit of 60k what is the correct way to calculate the percentage of the deposit i have. is it 60 divided by 340 which is 17.5 per cent? because 340k is the amount of loan i will need. or is it 60 divided by 400k. i am thinking it is the former. thanks all.

AndrewSmith

The deposit in this case woud represent 15% .

The deposit represents a percentage of the Purchase Price with the remaining percentage being mortgaged. Thus:

£60,000 = 15% of £400,000 leaving you requiring an 85% mortgage of £340,000


Hope this helps

Andy

Joe_Bloggs

There is also £12,000 to pay in stamp duty land tax on the purchase price. That is 0.03 x £400,000. The 3% rate applies to properties in the price band £250,001 to £500,000. I hope you have factored this amount into your considerations. If you have not the your deposit becomes £48,000 and this as a percentage of purchase price would be (48000/400000) x100 = 12%
J_B.

free4440273

thank you both. very kind