How much deposit do I need?

28th March 2020

How much do I actually need as a deposit?!

If you’re a first-time buyer and you’re saving for your first home, you’ll want to know how much deposit you’ll need to get together as early on in the process as possible.

Just to clarify – you’ll be classified as a first-time buyer if you’ve never owned a property, either freehold or leasehold in the UK or abroad.

In most cases, you’ll need to have a deposit of between 5% and 20% of the cost of your first home. The more you save, the less you’ll need to borrow. By having less to borrow, the greater access you’ll have to more mortgages with better rates as you’ll be a less risky investment for lenders.

The difference between the deposit you’ve saved and the first-time buyer mortgage you need is known as the loan to value (LTV) ratio – the higher your LTV, the higher the interest rate you’re likely to pay.

Remember there are other costs associated with buying a new home. You’ll need to pay solicitor’s fees, survey and search costs, mortgage arrangement and valuation fees, buildings insurance and removals costs. As a first-time buyer, you don’t have to pay Stamp Duty on the first £300,000 for homes worth up to £500,000.

There are many different Government-led schemes to help first time buyer get onto the property ladder. These include Help to Buy Equity Loan Scheme, 95% mortgages, First Home Scheme, Shared Ownership and more. Be aware that schemes for England, Greater LondonWales and Scotland, and they all vary.

Buying your first home can be as nerve-wracking as it can be exciting, so talk to our team of expert mortgage advisers about your options and we’ll guide you through the process. Call us on 08454 500200 or click here to make an enquiry.

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We started our enquiry not really knowing where we wanted to live or if indeed we were ready to buy our first house. I was passed through to Chawley, the mortgage consultant, and he was fantastic throughout. He took the time to explain things surely out of his remit and became someone I trusted quickly. Once we found our now home Chawley helped with the offer process and even some elements of the home buyers report. Cara helped at this point with insurance and updates, and was also great to work with. Throughout the entire process we felt like Chawley was the only person we worked with who took the time to really make sure we understood the lingo and the market. Thank you!

Becci

August 2020

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