How Much Deposit is Required?

DubShelley

Hi All,

Myself and my boyfriend are currently saving for a deposit on a house. Can someone tell me what the "normal" deposit required would be? We had always thought it was 10% but looking at "I'm an Adult Get Me Out of Here" last series, it would appear that 5% is adequate in most cases?

Anyone know if there's a set requirement? Or does it depend on the mortgage provider?

Thanks,
Shelley

tHE vAGGABOND

The more of a deposit you have, the lower your interest rate will be - so you should be aiming to have more than 8% of the house value [IMHO]

Banks are not throwing around 100% mortgages like they were a while ago, and where they are the interest rate can be nasty. The next 'step' is 92% of the house value, and at this step the interest rate will be lower..

Here is a copy and paste from EBS's website, to show..

Loan Amount Required LTV Margin Rate APR 10 years 15 years 20 years 25 years 30 years 35 years

All loan amounts >95%<=100% 1.25 5.25 5.4 10.73 8.04 6.74 5.99 5.52 5.21
All loan amounts >80%<=95% 1.15 5.15 5.3 10.68 7.99 6.68 5.93 5.46 5.14

patrickolee

It depends. Best to talk to a mortgage advisor. Some people can get 100% mortgages; depends on your circumstance and how much of a risk you represent. Back in my time (2yrs ago!) it was max 92%, but things have changed since then.

Victor

The standard contract needs a 10% deposit. The bank may load you the deposit.

Hedge

Whatever you do, make sure you put down enough of a deposit to prevent you going into negative equity in the current downturn.

8% seems like a wise figure if you can afford it.

Obviously, the more the better.

Don't get sucked into the whole sub-prime borrowing fiasco. Much better to save like mad for a couple of years than to be borrowing 100% at silly interest rates and losing money on the house at the same time. Financial suicide.

Who knows? In a couple of years you may pick up a similar property cheaper than you can today.

DubShelley

Thanks for all your replies everyone!

Looks like we have another year or so of saving before we can start looking then :eek:

superweld

it depends, i recently paid a deposit of 4,000 on a new house costing 200,000so this is only about 2%. so basically if you have a house in mind then just make an enquiry.

ixoy

superweld wrote:

it depends, i recently paid a deposit of 4,000 on a new house costing 200,000so this is only about 2%. so basically if you have a house in mind then just make an enquiry.

Got to ask - where did you recently get a house for 200k?

I'm still looking at a house buy (although not immediately) and would definitely want to try and get around the 90-92% mortgage. Remember, if you're going for an approximate 30 year mortgage, you'd be paying about €2 for every €1 borrowed over the life of the mortgage, once interest is factored in. 25k saved up now, would be nearer 50k overall (assuming, of course, you didn't alter your payment plans or sell early but you get the idea).

superweld

south east waterford area, new house timber frame.

Victor

superweld wrote:

it depends, i recently paid a deposit of 4,000 on a new house costing 200,000so this is only about 2%. so basically if you have a house in mind then just make an enquiry.

That is merely a booking deposit, usually refundable and little legal standing.

Electric

Usually most banks will lend you 92% of the purchase price, unless you are going for a 100% mortgage but as was mentioned before the interest rates aren't great and you are very exposed to any interest rate hikes.

I think the best rule of thumb is that the more you have saved the better. It'll mean you'll have to borrow less and pay less interest. Plus it'll mean that you'll have the 8% deposit and money for surveyors, legal fees etc