July 30, 2020
Let's tell you if you can get a mortgage after a quick look at your circumstances
It's really easy to take that first step to getting a mortgage.Get Started
Lenders want at least a minimum deposit of 5%.
This is £5,000 for a £100,000 property or £11,500 for a £230,000 property, the current UK-wide average for a house.
This would mean you’d have a 95% mortgage. It’s called that because the loan to value (LTV) is 95%.
The higher the LTV, the more limited your mortgage options are and, generally, the higher the rate of interest you will be charged. Equally, the bigger your deposit (and the lower the LTV) the lower the interest rates will be.
Most lenders start to offer more choice (and better rates) when you have at least a 10% deposit.
It may be worth knowing that the average deposit for first-time buyers is £43,433. That’s enough for a £430,000 house at a 90% LTV.
That said, the price of a first-time buyer home is £217,200, which makes the £43,433 deposit more like 20%.
Remember, Mojo can show you right now what first-time buyer mortgages your deposit can get you.
Maybe before the credit crunch. Now the only 0% deposit mortgages are guarantor mortgages. Here, you’ll need someone else – usually your parents – to be liable to pay your mortgage if you can’t afford to do so.
You can learn more about Help to Buy here, but the minimum deposit allowed with Help to Buy is 5%. However, with a Help to Buy Equity loan that could be enough for a LTV of 75%.
Furthermore, if you save for your deposit with a Help to Buy Isa, the government will boost your deposit by an additional 25% of what you have saved. Bear in mind that, if you haven’t opened a Help to Buy Isa already, you no longer can, but it may be worth looking at Lifetime Isas.
Here's a few other articles you may find useful.
Want to see what skeletons are in the financial closet? It's pretty easy to do and can be the difference to getting a mortgage or not.
It's a big question, isn't it! Fortunately Mojo is exactly the right place to find the answer. See what matters here and be ready to see your rates in minutes.