Getting on the property ladder is hard! With at least 5% of the property value required to get a mortgage and average house prices in the UK currently standing at over £220,000, it’s a pricey endeavour.

So it’s tempting to consider taking out a loan to fund a mortgage deposit and you may already have looked at this as a serious option.

There are no lenders, at the time of writing, who promote mortgage deposit loans. And that’s because of the concern over affordability.

Let’s say you buy a house at the average price of £220,000. That means the deposit you need is £11,000 (plus all the fees associated with buying a house).

Taking out a relatively large unsecured loan for £11,000 could leave you with a sizeable repayment each month, which reduces the affordability of your mortgage repayments.

On that basis, many lenders will ask you to prove the source of your deposit.



Alternative Sources for a Mortgage Deposit

 

 

Other Fees to Take into Account

If you are saving for a mortgage deposit, don’t forget about the additional costs:

The above, as the minimum, are fees you should be saving alongside your deposit.

 

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