In this article we take a close look at how the monthly cost of your mortgage varies dramatically with the size of the deposit you can put down when you buy a house.
Lenders lend in Loan To Values ( What is Loan To Value? ) therefore the smaller the deposit the higher the interest rate and the larger the deposit the lower the interest rate.
The following examples are based on a First Time Buyer purchasing their first property for £125,000 and shows what monthly mortgage payments would be depending on current interest rates and having a 5%, 10% or 15% deposit available.
The rates are quoted for 2, 3 & 5 year fixed rates with and without lenders arrangement fee on a repayment mortgage over 35 years.
| 5% Deposit | Interest Rate | Mortgage Payment | Arrangement Fee |
|---|---|---|---|
| 2 year fixed | 2.69 % | £ 437 per month | £ 892 |
| 3 year fixed | 2.99 % | £ 457 per month | £ 599 |
| 5 year fixed | 3.09 % | £ 463 per month | £ 599 |
| 2 year fixed | 3.18 % | £ 470 per month | £ 0 |
| 3 year fixed | 3.27 % | £ 475 per month | £ 0 |
| 5 year fixed | 3.47 % | £ 488 per month | £ 0 |
| 10% Deposit | Interest Rate | Mortgage payment | Arrangement Fee |
|---|---|---|---|
| 2 year fixed | 1.89 % | £ 370 per month | £ 995 |
| 3 year fixed | 2.18 % | £ 387 per month | £ 995 |
| 5 year fixed | 2.34 % | £ 397 per month | £ 995 |
| 2 year fixed | 2.17 % | £ 383 per month | £ 0 |
| 3 year fixed | 2.44 % | £ 399 per month | £ 0 |
| 5 year fixed | 2.51 % | £ 403 per month | £ 0 |
| 15% Deposit | Interest Rate | Mortgage payment | Arrangement Fee |
|---|---|---|---|
| 2 year fixed | 1.69 % | £ 339 per month | £ 999 |
| 3 year fixed | 1.99 % | £ 355 per month | £ 995 |
| 5 year fixed | 2.14 % | £ 363 per month | £ 995 |
| 2 year fixed | 1.99 % | £ 352 per month | £ 0 |
| 3 year fixed | 2.24 % | £ 366 per month | £ 0 |
| 5 year fixed | 2.39 % | £ 374 per month | £ 0 |
All the above rates are from various lenders as Manchester Mortgages are whole of market ( independent ) mortgage brokers and are subject to you meeting lenders criteria.
Mortgage rates are subject to change without notice and are based on rates available as at 8 November 2018.
As you can see there are many permutations available with thousands of other rates available with and without arrangement fees.
Manchester Mortgages welcomes enquiries not only from First Time Buyers but Home-movers, Re-mortgagors, and Buy to Let investors.
Save yourself the stress of trying to work out which mortgage is best for you by calling Manchester Mortgages on 0161 706 0242 to discuss your requirements.
Go to our First Time Buyers in Manchester section.
