Once I've got my finances straight I'd like to think about getting my own place, but what sort of money am I looking at to have under my belt before I can begin thinking?

Is it right that the UK mortgage market still requires a 20% deposit? Most places round here are round the 100k mark so getting 20k might be a little challenging (I've been advised to take a separate loan for the deposit, but that sounds messy)

What about fees etc? Stamp duty? I've done some of the online calculators, putting in 21k as my annual salary before tax, estimates to give me a mortgage of 50k, whats that gonna get...a caravan?

Can anyone give me some good advice? There must be hundreds of people in my situation...

up vote 3 down vote accepted

In the current climate, most good deals are for people looking for a 75% LTV or less. There are mortgages available with ok APRs for up to 90% LTV though. At the moment you would struggle to find a mortgage with greater than a 90% LTV.

You can use an online comparison site like Money Supermarket to find a deal. Plugging in the numbers you gave in your question (house price 100K, income 21K) with a few other assumptions (10K deposit for 90% LTV, 300/month other outgoings) gives a number of results at around 6% APR, which isn't great, but the payments would be around £600/month which you may be able to afford.

  • I've recently bought a 111K house with a 10% deposit and managed to get a mortgage. Interest rates isn't great at 6.75% but I pay roughly £620 per month. The benefit I had was that it was a join application, our existing debt was <8K (damn cars) and our combined pre-tax income was over 40K. Our advisor told us that it's possible with a 10% deposit but at 15% is where the deals are alot better. Hope this helps – TWith2Sugars Sep 5 '10 at 16:26
  • Oh and as for fees we paid £500 product fee, no stamp duty, £800 solicitors fee and £255 fee when we finish the mortgage. – TWith2Sugars Sep 5 '10 at 16:28

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