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Does deposit/LTV change how much you can borrow?
what7
Posts: 80 Forumite
Does deposit/LTV change how much you can borrow?
Or does it only change the rate of interest?
For (extreme) example: I have £900k deposit, want to buy £1m house, with £100k mortgage, with salary of £20k, so on paper I can only borrow up to 4.5x salary, so I am £10k, will the bank/broker refuse base on the data I have given.
Even though I have a MASSIVE deposit and a low LTV, and unless the house price dropped to less than £100k, the bank will not lose money.
Or does it only change the rate of interest?
For (extreme) example: I have £900k deposit, want to buy £1m house, with £100k mortgage, with salary of £20k, so on paper I can only borrow up to 4.5x salary, so I am £10k, will the bank/broker refuse base on the data I have given.
Even though I have a MASSIVE deposit and a low LTV, and unless the house price dropped to less than £100k, the bank will not lose money.
0
Comments
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If a lender caps their borrowing at 4.5x income and you earn £20k with no debts etc then they will lend you £90k. If you want to buy a £1m property you need to find £910k
There will be some lenders that will lend more than 4.5x have you spoken to a broker?
The caps can be looked at for affordability....in your example you could say that the bank you not lose money on a £1m property if they lent £300k but, despite that they won't lend 15x salary0
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