Down payment calculator
Mortgage pricing steps at round loan-to-value bands rather than sliding smoothly — typically 95%, 90%, 85%, 80% and 75%. Getting from 90.5% to 89.9% can move you a whole band and cut the rate meaningfully, while going from 89% to 86% often changes nothing at all. Before stretching for a larger deposit, it is worth finding out exactly where the next band sits.
An estimate. Lending criteria, stamp duty or transfer tax, legal fees and survey costs are not included and can add several per cent to what you actually need.
A deposit is the percentage of the purchase price you pay upfront. Ten per cent of 350,000 is 35,000, leaving a 315,000 mortgage at 90% loan-to-value. Below 20% down, most lenders add mortgage insurance or price the rate higher.
How to work out a deposit
The deposit is rarely the whole cash requirement. Stamp duty or transfer tax, legal fees, a survey, mortgage arrangement fees and moving costs commonly add two to five per cent of the price on top, and none of them can be borrowed on the mortgage. A buyer who saves exactly the deposit figure and nothing more discovers this late and awkwardly. The other consideration is what a larger deposit buys: past the loan-to-value band boundary, extra deposit reduces the loan but no longer improves the rate.
Questions
Five per cent is often the minimum, ten is common, and twenty avoids mortgage insurance and usually gets a better rate.