Mortgage and School Fees

G_samy

Hi all,

Looking for any insight into how banks might view our situation when looking for a mortgage in the near future.

My wife and I are currently looking to buy our first UK home.

I have a deposit of £200k and our household income is £65k per annum. 

I am expecting to buy a house worth of £450k and expect to get mortgage based on income and pay the difference from the deposit. We have no other investments except for the savings

 My 10 year old has been offered a place in the fantastic,  academically-selective, independent school in town. At £16k/year.

I would like to keep £50k of my deposit for paying school fees for the next four years.

What would the banks make of the above arrangement? Will they still loan us 5 times the annual income if we have school fees commitments of £65k upto GCSE level? Will they let me ringfence the existing savings?

Thank you for your help.

MovingForwards

You're better off asking on the mortgage board as a few brokers comment on posts.

sourcrates

Moved for you.

dimbo61

Please look for a  mortgage brokers help with this.
You could also consider an Offset mortgage 

theoretica

Some schools have schemes where you can pay school fees in advance - which might serve to remove the outgoing of school fees from mortgage affordability calculations.  Or might be an overcomplicated scheme that would not help...  but it is another question to ask.

MWT

School fees amounting to roughly 1/3 of your net income is going to have an impact on affordability for sure, and 5x may be out of reach as well.

Time to talk to a broker, and maybe see what one or two of the affordability calculators say...

MWT

G_samy said:

My wife and I are currently looking to buy our first UK home.

Also one small question, when you phrase it as you have, does it suggest that you own property outside the UK?

Only reason to ask is the additional SDLT is going to put a strain on that £200k 'deposit' money, especially after taking out a lump sum to help with the school fees.

MEM62

G_samy said:

Will they let me ringfence the existing savings?

Will they let you?  They have no say in it.  A bank does not dictate what you do with your savings.  Of course, the amount of deposit that you put down does impact on the mortgage lending but that is an entirely different discussion

Thrugelmir

G_samy said:

 Will they let me ringfence the existing savings?

Your savings will be of no interest. Outside the lenders control. Lenders will base their decision on the facts at the point of application. 

[Deleted User]

Certain lenders will allow school fees to be disregarded if there is another way to pay them. This might be having capital reserves or it might be that a 3rd party pays them.  Its not the normal approach but it can be done.  

Sncjw

Why do you need. 450k house could you not just buy somewhere smaller