Getting a second mortgage-15% deposit?

sugarcoma101

Hi all,

Hoping someone can advise!

I'm currently saving hard to buy a property with my partner. We have a joint income of £110K, and £35K in joint savings.

I already own a one bed flat, which I once lived in, but is now let out to tenant when I moved in with my partner. The rent is £975 p.c.m and mortgage payments are £430 a month. I have £95K left to pay off on that mortgage. If it's relevant, the flat is now worth about £190K but I'm not currently interested in selling it.

I spoke to a mortgage broker a few weeks back (the same one I used when I bought my flat), and assumed that we would be able to get a mortgage with a 10% deposit to buy somewhere in the £300K range.

However, he said there was very little likelihood of us being able to get a mortgage with a 10% deposit as I already had a mortgage for the other flat. We would instead need a 15% deposit. He was very adamant about this.

Now, this has obviously totally scuppered our plans. Saving the extra 5% deposit is setting us back a lot, we're keen to buy somewhere, and it's really frustrating that we both have good financial situations and savings, but need a whopping 15% deposit.

Does anyone know if this is a hard and fast rule? Or was this broker just being cautious?

It would change things for us significantly if we could get a mortgage with a 10% deposit. We're living in London where costs are astronomical anyways and scraping up an extra 5% deposit is a challenge.

All help appreciated!!

GMS

Speak to another broker. There are lenders who will consider.

Alternatively would you consider raising funds on the rented property to increase deposit?

Thrugelmir

£110k income plus income from a let property and still struggling to save. Suggest the problem lies elsewhere than just living in London.

Why not sell your flat and use the equity. More tax efficient ways of saving for retirement.