What do you consider a large deposit?

kmmr

What - the one month rate? You think they fund your mortgage using 1M, or even 3M rates? Banks buy funding for long term, anything funded using shorter term markets can't be used for mortgages. They have to hold most of what they borrow for less thatn 3 months in government bonds.

Forget the interest rate risk, there is a liquidity cost - the bank has to find long term (variable or fixed) borrowing to fund your mortgage.

borrowing short and lending long was one of the catalysts of the last crisis! So rather than (or perhaps as well as!) profiteering the banks are trying to be prudent.

delmar39

I put down around 36%, circa £84k. Makes me feel like downsizing and pocketing some cash and going off on holiday for a year! It's great that people progress up the housing ladder, but I'd be happy to live in a smaller house and have plenty of dosh to do what I wanted. However, downsizing now I guess would stop me from doing it later on in life. Might start a post on the subject....

serious_saver

neverdespairgirl wrote: »

There's nothing necessarily wrong with being self-employed - OH and I both are, and we're OK for getting a mortgage in the near future. Do you have 3 years' accounts?

Unfortunately not, I have nearly two years freelance accounts and prior to that I was on a sort of training scheme/apprenticship for a year. It was funded on a part time basis and I was able to work freelance on my free days to build up extra cash. Before that I worked in very different but secure employment.

Unfortunatly despite the fact that I was working freelance for the duration of my training they don't want to consider that year because I was backed up by additional funding.

neverdespairgirl

serious_saver wrote: »

Unfortunately not, I have nearly two years freelance accounts and prior to that I was on a sort of training scheme/apprenticship for a year.

That's the problem, I reckon.

If you can hang on until you have 3 years' accounts, it's much, much easier.

PasturesNew

A single person on £15k/year might struggle to save £5k over 3 years, to put down a 10% deposit on a cheap studio.

A couple where each earns £25k/year might be able to save £75k over the same time, to put down a 25% deposit on a huge £300k house.

Circumstances and income make a lot of difference to what's achievable.

hshen

kmmr wrote: »

sigh... do people really still think banks fund mortgages using overnight borrowing from the bank of england? Just so you know - they cant and dont!

true, but BoE talking up low interest rate for the medium term does impact (i.e. lower) the coupon you pay for longer term borrowing in the market!