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deposit for property

by compound200 27 October 2009 |

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whats the general rule saving for a deposit house in years

savings v houseprices

the property your saving for increases in value much faster than your savings rate

the current mkt has changed but it still is demoralising

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824

MikeGG1 posted
There is no general rule.. Things have got a lot harder for First Time Buyers in that they now need a 10% deposit instead of a 5% deposit. Also the mortgage interest rate differential is so much greater now between differing Loan To Value levels.
Having said that, you only need to find 10% of the property value, so the increased deposit, year on year only rises by one tenth of the house value rise. But getting that 10% is not easy when you have to pay rent. Better staying on with parents, if possible, until you have that initial deposit. plus fees etc, of course.
At least now you can get relatively high interest rates while saving up that deposit. I refer to the 12 month fixed rate monthly savers that pay up to about 4.5% (Principality, for example).
Good luck.
Mike
Posted on 27 October 2009 | Love 1 love Report
7

compound200 posted
thx
Posted on 27 October 2009 | Love 0 loves Report
59

time2go posted
I also think you should not be too proud to borrow some deposit money from mum and dad (if they can afford it). I was fortunate in this regard. If I had relied on savings alone it would have been much harder and taken longer.
Posted on 28 October 2009 | Love 1 love Report
824

MikeGG1 posted
And if you can tap them for a bit more, you can save more than 1% in interest rate by finding 15% instead of 10%.
Mike
Posted on 29 October 2009 | Love 0 loves Report
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massive posted
Yes you can purchase a house with a 10% deposit but you will be limited in choice ,you would be much better trying to save more money to put down , you also have to think to yourself how you would cope if interest rates went up ,right now i'm looking at the finacial times their is a mortgage in their 10% deposit with a fixed rate for 3 years of 4.94%. could you afford to service the mortgage if rates were higher at the end of the 3 year fix.
Posted on 31 October 2009 | Love 0 loves Report
7

compound200 posted
my flat is valued at £107k
mortgage 40k
say i want to keep property but move up to a property valued about 200k.
once mortgage is paid off--i can expect a rent of £450 a month after letting agent costs.
1.do i pay mortgage off quickly-3 years--then save for a deposit 2 years(5 year time period.
2.keep part mortgage--save up a deposit(interest rates are low)
3.pay off mortgage-seell flat(the next flat i get is the one i will stay rest of my life--im 47
thx
Posted on 09 November 2009 | Love 0 loves Report