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Higher mortgage or bigger deposit?

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Hello,
I've just had an offer accepted on a house and trying to work out how large my deposit should be. There seems to be a significant difference in the monthly payments and amount paid overall with a higher deposit, but is it worth digging deeper into savings to account for this? I wondered what other people have done when it came to working out deposits.

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  • K_S
    K_S Posts: 6,880 Forumite
    1,000 Posts Fourth Anniversary Photogenic Name Dropper
    @Deleted_User Given the rate-environment at the moment, there isn't a huge difference in mainstream interest rates between 60% LTV and high LTV.

    But even so, given that rates are relatively high at the moment, it would make sense to take out the smallest mortgage you can while leaving sufficient cash that you may need access to. For things like any work you need to do on the house, your rainy day fund, etc. 
    Hello,
    I've just had an offer accepted on a house and trying to work out how large my deposit should be. There seems to be a significant difference in the monthly payments and amount paid overall with a higher deposit, but is it worth digging deeper into savings to account for this? I wondered what other people have done when it came to working out deposits.

    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. 

    PLEASE DO NOT SEND PMs asking for one-to-one-advice, or representation.

  • Great advice @K_S, thank you!
  • jj_43
    jj_43 Posts: 336 Forumite
    100 Posts First Anniversary Name Dropper
    i can see the following: 
    60% LTV 4.34% v
    90% LTV 5.49%
    so a substantial difference, go with 60% LTV if you can.
  • jj_43 said:
    i can see the following: 
    60% LTV 4.34% v
    90% LTV 5.49%
    so a substantial difference, go with 60% LTV if you can.
    Yes, but you can't compare 60% to 90%. If you are looking at 60% to 75% there is very little in it. Obviously over 80% that gap widens.
  • dimbo61
    dimbo61 Posts: 13,727 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Have you looked at Offset mortgages ?
    Still putting down a good deposit but putting your savings to good use !
    Keeping your savings in an offset account means you can tap into cheap borrowing if necessary!
    When you have an spare money you save into the offset account.
    Now Barclays even allow current accounts to be used to offset the mortgage debt
  • @dimbo61 I haven't but I certainly will now! Barclays are my first choice for a mortgage anyway so will look into this, thank you!
  • @dimbo61 I haven't but I certainly will now! Barclays are my first choice for a mortgage anyway so will look into this, thank you!
    Barclays only do tracker offset but Yorkshire building society do fixed. 
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