Does having a 15% deposit really make a difference

saints1996

Hello,
On Wednesday I applied for a NatWest mortgage after being messed around by the Abbey for 2 weeks.
Anyway yesterday i got a call from the NatWest saying all my income and other factors where fine but I kept failing credit check. However if i could find 15% instead of 10% it would go through.
Though I know a bigger deposit will always help, does 5% extra really help that much?
In some ways it seems 90% mortgages are advertised but in reality they don't want you to have one.
Any info on the above would be appreciated. Thanks

GMS

The higher the deposit you have the less the risk is to the lender. As a result the credit scoring will be easier with a lower Loan to Value.

_Andy_

saints1996 wrote: »

However if i could find 15% instead of 10% it would go through.
Though I know a bigger deposit will always help, does 5% extra really help that much?

You've just answered your own question, surely.

Ilya_Ilyich

A 15% deposit is 50% bigger than a 10% deposit -- that's a big difference!

saints1996

Thanks for the replies.
I just honestly didn't think an extra 5% would make any real difference in the lending criteria.

hcb42

they have told you it will, so i guess it does!

_Andy_

saints1996 wrote: »

Thanks for the replies.
I just honestly didn't think an extra 5% would make any real difference in the lending criteria.

OK but as you've found out, it does. Still not quite sure what your query is to be honest.

kaylz39

I understand what you mean, 5% doesn't sound like much but saying that it could be a very large sum of money depending on the value of the house you're interested in buying.

Andy- either woke up on the wrong side of the bed when he replied above or didn't read Martins request to be especially nice to newbies!

_Andy_

kaylz39 wrote: »

I understand what you mean, 5% doesn't sound like much but saying that it could be a very large sum of money depending on the value of the house you're interested in buying.

Andy- either woke up on the wrong side of the bed when he replied above or didn't read Martins request to be especially nice to newbies!

I fail to see what's 'not nice' about what I've put - it's factual. Just because I don't dress it up with a hundred emoticons etc doesn't make it rude and frankly I resent your comment

Brock_and_Roll

As a banker myself, I know how they think. Basically the way the market is at the moment they want as big a deposit as possible, but they have to keep the "headline rate" fairly low in order to get enquiries through the door - after all no business, no job!

From the banks perspective, if you only have a 10% deposit, they could very soon have an unsecured risk. Aside from the fact that house prices are/expected to fall by circa 5% or so depending on where you live this year and with the economy in big trouble, if for example the op found themselves out of work in a year or so, by the time the bank repossessed and sold it would have a siginificant shortfall.

property.advert

It would be interesting for someone working in the field to come forward with actual risk attributes at the 10% and 15% deposit level (and actually all other levels as well !).

I suspect the borrower could just as easily have re-jigged their expenses to increase the affordability element of the mortgage. I would expect a wholly different interest rate at 85% LTV to 90% LTV.