How much you need to save for a mortgage deposit, according to experts

Buying your first home can be daunting when you consider the financial decisions you will be making. Among these decisions are mortgage loan options.

Before buying a property, it’s important to familiarize yourself with how mortgage deposits work, including how much you’ll need to save and the rules on endowment deposits. Experts from which? they shared how much money you will need for a deposit.

According to Which?, mortgages are generally available at 95% loan-to-value (LTV), meaning it’s possible to get on the property ladder with a deposit of 5% of the purchase price and a mortgage to cover the rest of 95% %.

Here’s how much money you should put down for a £200,000 property, based on different deposit sizes:

• 5% deposit: £10,000
• 10% deposit: £20,000
• 15% deposit: £30,000

To work out how much you might need to save for your mortgage deposit, you should consider typical property prices and monthly repayment costs. You should also think about property prices in your area – you can get a rough idea of ​​local house prices from property portals such as Rightmove and Zoopla and by talking to local estate agents.

However, the figures listed on portals and agents’ websites are asking prices, so they might be slightly higher than the property’s value. For more concrete information, you can check how much homes in the area have sold for using the Land Registry’s paid price tool.

Each monthly mortgage payment will include interest as well as a portion of the loan itself – and the bigger the deposit, the smaller the loan and the less interest you’ll pay.

You should also think about factors such as mortgage fees, early repayment fees and how many years you want to repay the loan (mortgage term). To find out how much a mortgage could cost you each month, you can use Which? Mortgage repayment calculator here.