How much do I need for a down payment?
This is a very common question that seems to be asked, and in the current market, it seems that you will need about 5% of the value of the property that you would like to buy. So, for example if you were looking to buy a house that was worth £200,000 you would have to pay £10,000 in a down payment. With this 5% being payed, this means the remaining 95% would be payed off by a mortgage lender. So, if we carried on with the example from earlier of a house being £200,000 then the mortgage broker would pay the remaining £190,000.
However, it really depends on how much you would also like to put down as a down payment. There are both advantages and disadvantages about having a small down payment, with advantages being that you can become a homeowner faster, and you won’t have to spend as much upfront cash. However, with a small down payment also comes with paying PMI to your mortgage lender, which increases the monthly costs. While also having increased interest onto the monthly payments. So in full, you will be paying a lot more monthly costs.
To conclude, the amount to pay on a down payment may vary depending on the property you want to buy or the mortgage broker that you use, however it will most likely be about 5% of the property’s value.
If you would like a link to a mortgage deposit calculator then we will provide one below for you.