advice on deposit and mortgage amount

lilmissclass

i earn 30k a year and want to buy a house alone. I am making that 90 - 120k i may get allowed as a mortgage.

My question is how much of a percentage deposit should I offer, 5? 10? more than that?

Also what is the benefit to me offering a 20k deposit?

poppy10_2

A larger 20k deposit will increase the range of mortages available to you, and make it more likely that you will get a better rate

lilmissclass

but will that mean instead of giving me 100k mortgage they would increase it< im not sure i want that or that it would be wise for me longterm.

or does it mean i would get a smaller mortgage at 80k and therefore overall pay less money for my home?

sorry im rubbish at stuff like this

lilmissclass

any ideas folks

CHR15

lilmissclass wrote: »

but will that mean instead of giving me 100k mortgage they would increase it<

What do you mean by that??

If you can get £120k mortgage on £30k salary, it means you can buy (afford) a £140k house with your £20k deposit

Or... you only need a £100K mortgage for a £120k house.

The larger the deposit, the lower the LTV which can lead to better deals on the mortgage (because there is less risk for them)

carefullycautious

Just because you have a bigger deposit it does not mean you have to have a bigger mortgage or look at dearer houses. So if you have a 20% deposit on 100,000 it would bring the overall amount owing down. I think that is how I have read your post.

poppysarah

Ideally you'd have the whole amount in cash.
The more cash you put in the less mortgage you pay.

As much as possible. Live like a pauper for a few months and save like mad. See how much you can squeeze into that deposit fund.

Bufger

If you can save 10% that would be the minimum. Every 5% after that you will find yourself with a slightly better rate.

Ivana_B_Rich

lilmissclass wrote: »

or does it mean i would get a smaller mortgage at 80k and therefore overall pay less money for my home?

Exactly. The bigger the deposit, the smaller the mortgage. Over the term of the mortgage you pay lees interest :j