High Deposit Mortgages

If you’re among the lucky minority who has a large mortgage deposit ready to go, you’ll need to know how that impacts your borrowing options.

In this article we’ll look at what counts as a large deposit, how the size of your deposit can impact the interest rates you’ll get, and how a broker can help you secure the best deal.

What is considered a large deposit for a mortgage?

Anything over around 25% is considered a large deposit. This is the threshold at which your high deposit starts to open up better deals and more competitive rates.

The average minimum deposit requirement for a mortgage in the UK is 10%, although it’s sometimes possible to get a mortgage with a 5% deposit, or with none at all, depending on your other circumstances and the type of mortgage.

Is it easier to get a mortgage with a large deposit?

Having a high deposit is certainly going to be a plus point in your mortgage application, but lenders will look at a combination of factors to assess your eligibility, including your credit history, age, and other things such as the type of property you’re buying.

The other key thing lenders will want to assess is affordability. Regardless of the size of your deposit, your lender will want to make sure that you can afford your monthly repayments, so they’ll look at your annual salary and set a cap on lending based on that. On average the maximum you can borrow on a mortgage is 4.5 times your salary, but it is possible to get a 5.5 times salary mortgage, or sometimes even higher, depending on your circumstances. Lenders will also consider other credit commitments as part of their affordability calculations, such as credit cards, loans, dependents and hire purchase.

While a bigger deposit doesn’t mean you can afford to borrow more, as this is capped based on your income, it can mean that together with your loan, you can afford to buy a higher value property.

Loan-to-value calculator

You’ll notice that many lenders will talk about your deposit in terms of your loan to value ratio, or LTV. Your LTV is the size of the loan you want relative to the total value of the property, so a higher deposit means a lower LTV. A deposit of £50,000 for example on a property worth £200,000 equates to an LTV of 75%.

If you’re not sure what your LTV is you can work it out in our simple calculator. Just enter the value of your property and the size of the mortgage you’re looking for and we’ll do the rest.

How to get a better mortgage deal with a large deposit

Just because you have a high deposit doesn’t mean that finding a mortgage will be easy and in fact if you go in over confident, without doing the groundwork, you risk having your mortgage application declined. Luckily there are a few things you can do beforehand to make sure you get the best possible deal.

How does a large deposit affect mortgage repayments?

Increasing the size of your deposit can mean that the amount you need to borrow is reduced, bringing down your monthly repayments too. This is a positive for lenders, especially if you’re on a low income, as it makes your mortgage more affordable.

Use our mortgage repayment calculator below to compare what your mortgage repayments might look like under different terms and rates.

Can you get a mortgage with no job but a large deposit?

Having a large deposit can definitely help you to get a mortgage if you have a low income, but getting a mortgage with no job at all can be difficult. The first thing to do is to consider any other sources of income, as a job isn’t the only income that counts for mortgage purposes. It is possible to use certain benefits as income for a mortgage for example, or income from pensions, investments, rental income or maintenance payments.

Speak to your broker about your situation for a better idea of which lenders might be able to offer you a mortgage with no job but a large deposit.

Can you get a mortgage with bad credit if you have a large deposit?

Mortgage lending always comes down to risk, and while bad credit is seen as a risk factor, some of this risk can definitely be mitigated by offering a larger deposit. The impact of your bad credit will also depend on the details of the credit issue – the type of problem, whether it was something serious like a CCJ or just one missed payment, how much money was involved and how long ago it took place.

Get matched with a broker experienced in dealing with large deposits

While you might think that having a large deposit means it will be easy to secure a mortgage, that’s unfortunately not always the case as so many other factors come into play. You could also be faced with significantly more research, as your high deposit will open up a lot of options and exclusive rate deals. Don’t worry though, a broker will do all of this for you, freeing up your valuable time.

You don’t even need to spend hours finding the best high deposit mortgage broker, as our free broker matching service does the hard work here for you too. Give us a call on 0808 189 2301 or make an online enquiry and we’ll assess your needs and arrange a chat for you with an advisor with specific experience in securing large deposit mortgages. There’s no obligation so you’ve got nothing to lose.