Savings - How much to use for deposit?

Tom2001

I'm a FTB and after years of saving I've managed to accumulate £130,000 in savings.

I'm a bit torn as to how much of my savings I should use as a deposit?

What are people's recommendations as to the amount I should use as a deposit, to leave enough to furnish/decorate, cover the fees etc?
What is a sensible amount to leave in the bank?

FireWyrm

Use it all and buy outright, or at the very least only have a teeny tiny mortgage. Think about it, you borrow £100K for instance, you will pay back £200K over the life of the mortgage. On the other hand, buy outright, have a little mortgage of £20-30K and never have to worry about interest rates killing you and your debt with depreciate with time to almost nothing. To give you an example, my parents hade a mortgage of 6K in the 80s which seemed to them like a never ending millstone. How many of us now could raise that on a credit card these days? All of us? You would be in the same scenario in about 15 years. Yes, you would pay back £60K, but that's a heck of allot better than £200K and you would never worry about negative equity and you would have a true investment.

SuzieSue

I would use £100k for the deposit. Keep £15k for fees, decorating etc and £15k for emergencies (redundancy, illnesss etc) assuming you don't have any other rainy day savings.

pinkshoes

Are you buying a £1 Million mansion or a £200k semi? The price of the property will play a big part. I think the minimum amount for a mortgage is £25k.

Tom2001

Thanks for the replies.

Would love to buy outright or have a tiny mortgage, but I live in London, so no chance of that.

100k was about the figure I had in mind, as I don't have any other rainy day savings.

FireWyrm

Tom2001 wrote: »

Thanks for the replies.

Would love to buy outright or have a tiny mortgage, but I live in London, so no chance of that.

100k was about the figure I had in mind, as I don't have any other rainy day savings.

You do know there is a whole other part of the country outside the M25 right :rotfl: ?

most of us manage to live quite well and never need to visit the Big Smoke except on special occasions...there's even work out here...honest. You can buy a very nice 3 bed semi/terrace in a village for £150K....we have accassionally been known to forgoe the hay waggon in favour of a train....it happens, trust me. We view such progressives with distrust, but this is the 21st century.

shegar

Firstly well done on saving up a good bit, depends really on your area that you want to buy in, and how much property is what you are looking for.........Id want to keep at least 20 thou in savings, for rainy days etc, because once that lump sum has gone you wont be able to save like that again with a house to run.....In the area that you want to buy what are property prices like.? How far would hundred thou go in property.? I hope you find your ideal home ......

Tom2001

FireWyrm wrote: »

You do know there is a whole other part of the country outside the M25 right :rotfl: ?.

True enough, but I have a very good secure job in London, and I'm not going to give that up easily!

Also I'm not really keen on doing lengthy commutes, plus what you might save on the property price, you lose on the cost of commuting

Tom2001

shegar wrote: »

Firstly well done on saving up a good bit, depends really on your area that you want to buy in, and how much property is what you are looking for

I guess it really depends on whether I look to buy a flat or a house.
I'd prefer try to step on the ladder slightly higher and aim for a freehold house.

Probably looking at somewhere in south east London, where I guess I'd be looking in the region of 220-250k.

shegar

Tom2001 wrote: »

I guess it really depends on whether I look to buy a flat or a house.
I'd prefer try to step on the ladder slightly higher and aim for a freehold house.

Probably looking at somewhere in south east London, where I guess I'd be looking in the region of 220-250k.

Well in that case id definately put 100 thou down so you will have less to pay back on tick.......It also depends on your age , cos you dont want to end up 65 or more with a huge mortgage do you.?..

AdmiralX

Tom2001 wrote: »

I'm a FTB and after years of saving I've managed to accumulate £130,000 in savings.

I'm a bit torn as to how much of my savings I should use as a deposit?

What are people's recommendations as to the amount I should use as a deposit, to leave enough to furnish/decorate, cover the fees etc?
What is a sensible amount to leave in the bank?

Do you think you need to keep a certain amount as slush fund? or for any unforeseen costs?

The range you quoted is v good for 3 bed in SE London and should find those in certain conservartion areas , I live there. Some PCs are overpriced and some coming up.