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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Have just secured a mortgage, with the help and expertise of Rob Ferguson in the Alton office, and supported by Cara Simpson-Hayter. From the very first conversation with Rob, I felt that he was out to ensure he got us the best deal he could. The face to face consultation was very informative and the one thing that really shone through was his transparency and integrity. Something that will definitely have us going back again when the current deal will be up for renewal in a few years time. This guy knows what he is talking about, he took the time to look at the best options for us and to ensure that with a prior credit history 'blip', he managed to secure a deal that was much more competitive than any of the high street lenders for those with perfect credit history. All the time, Cara has been there in the background. Regularly keeping me up to date with progress and when anything else was needed she was super efficient in getting the info to the lender. Buying a house can be a pretty stressful time, especially securing the mortgage, but I simply cannot rate Rob and Cara highly enough as they really took a lot of the stress away. I felt completely reassured from the very start that we would be looked after, and they certainly lived up to my expectations and more. My sincerest thanks to you both.

Raymond M

April 2020

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