10% or 15% deposit?

soplum

Hi all,

Our top budget is £280k and we have just had our offer accepted on a house for £250k. We can afford a 15% deposit with this price and it'll leave us £5k to pay for solicitors fee and some furniture when we move in.

However we would like some spare cash to do some small renovations and to have some spare savings. 

A 10% deposit on this house will leave us just over £15k in cash to do some renovations, pay solicitors, buy our furniture and have some left for savings!

How much of a difference in product cost and difference in interest rates would putting a 10% deposit be?

We are so below our top budget I would presume we are still safe buyers with a 10% deposit because we are no where near borrowing our full amount!

We are very new to this so sorry if its simple!

K_S

@soplum To get a rough idea of the difference in costs for 90% vs 85%, just plug in both scenarios here

https://www.moneysavingexpert.com/mortgages/best-buys/

If you have a broker, you can ask them to recommend the most cost-effective product available for you at both LTVs.

Thrugelmir

Try here

https://www.moneysavingexpert.com/mortgages/best-buys/

soplum

Ah thank you both! 

£17 difference a month!

Hopefully our broker can find us a better deal as well.

Even though they say 15% deposit is better, 10% deposit opens so many extra doors for us!

getmore4less

What gave you £17pm difference, 
Just the different level of borrowing £12,500  over 35 years on 0% would be £30pm
2.5% over 35y  the difference on the same rate is £45

Better to look at the costings properly rather than just a monthly difference
What rate difference are you looking at for a £250k place 
90% LTV £25k/£225k
85% LTV.£37.5/£212.5k
(Most mainstream lenders have ~0.6% difference )

If you take the say nationwide 5 year rates.  they are 
90% 3.34% £1,499 fee  
85% 2.74% £1,499 fee

taken on 35y term in 5 years 
90%

amount	rate	payment	owing	interest
£226,499.00	3.34%	£915.22	£207,929.25	£36,343.67

85%

amount	rate	payment	owing	interest
£213,999.00	2.74%	£792.84	£194,460.92	£28,032.32

85% paying the 95% amount

amount	rate	payment	owing	interest
£213,999.00	2.74%	£915.22	£186,600.96	£27,515.16

putting the extra £12.5k down saves  ~£9k in interest over  the 5 years

I see Platform have better rates but the differences are still around the same ~0.5%
(MSE seems to have lost the fees on those)