Is it worth putting down a bigger deposit?

tyler80

Looking at different mortgage products now that our offer has been accepted. We're in the position that we'd just be able to put down 25% deposit rather than 20%, which would bring the rate down to 5.19 rather than 5.29 (5 year fix).

I've not got my maths head on this morning, can't work out whether we'd be better keeping some money back as contingency and going with the higher rate (we have money set aside for fees etc. separately) or putting down the 25% deposit.

Any advice?

powerwin

It really boils down to how likely it is that you might run into difficulty paying the mortgage. Personally, I like to err on the side of caution. Also, the interest rate difference isn't huge, so how much money will it save you?

Rgds

tyler80

Well if I've got my sums right it seems like putting down the extra 5% will save us a total of 2200 quid give or take a few pence over the 5 year fixed term.

Don't anticipate any problems paying the mortgage, it's a good chunk lower than our current rent and manageable on one salary should either of us lose our jobs.

marlasinger

Odd that an extra 5% will not give you a much better rate. When we got our mortgage last year, a 20% deposit gave us 5.26%, but a 25% deposit gave us 3.69%. It was a no-brainer which we went for.

I think you also have to consider how much savings you will have left when you buy. We didn't have much left in savings, but had so much furniture to buy that we did struggle for a few months.

kingstreet

tyler80 wrote: »

Looking at different mortgage products now that our offer has been accepted. We're in the position that we'd just be able to put down 25% deposit rather than 20%, which would bring the rate down to 5.19 rather than 5.29 (5 year fix).

I've not got my maths head on this morning, can't work out whether we'd be better keeping some money back as contingency and going with the higher rate (we have money set aside for fees etc. separately) or putting down the 25% deposit.

Any advice?

Can't you go for the Yorkshire, Barnsley or ING deals between 4.39% and 4.59%, all with low fees?

tyler80

I can look at other deals yes, but need to factor in first time buyer incentives etc. as well not just the headline rate. Because our mortgage isn't going to be huge something like 500 quid towards solicitors fees makes a fair difference to overall value.

I too thought that getting into the 75% LTV bracket would allow us access to much better deals but so far at the deals I've looked at it doesn't seem to be the case.

We have lived in unfurnished rented accommodation for years so we have furniture and some appliances already so we don't really have to consider the cost of that too much.

kingstreet

In which case, Yorkshire Building Society is offering 5.69% fixed until 30/6/2016 with no valuation fee, no arrangement fee, free legals and £500 cashback.

You need to work out what combination of rate, fee, cashback etc works out best for you.

tyler80

You need to work out what combination of rate, fee, cashback etc works out best for you.

I know, just haven't got my maths head on today :-)