House buying newbie: savings and mortgage

[MotherHubba]

Understand that when you buy a property you need a deposit and also generally a mortgage (being a multiple of salary)...

If you had significant savings, e.g. in an ISA or similar, so not locked away, could you use this as "collateral" against borrowing a higher mortgage? I.e. as proof you could fund the higher repayments - or would the bank want this to be in the deposit?

I don’t see how that would give the bank any security at all, because they can’t stop you from spending it. That’s the issue - they need security, in the form of your estimate earning potential, and (via deposit) in equity in the house.

There are mortgages where a parent can offset their savings against the mortgage interest though.

Speak to a mortgage advisor.

An offset mortgage would let your savings count against the balance of the loan, it saves on interest payments. Not sure how many are offered at the moment, best to speak to a mortgage advisor. And you'll still need a deposit.

I don’t think so generally unless it’s an offset mortgage. I’d speak to an advisor, as above.

I keep significant savings in an ISA wrapper because I’d like to retire before 55. Mortgage advisors have never suggested leveraging it in any way.

I suspect you'd be better off putting down as a bigger deposit, and getting a lower mortgage interest rate (the better your LTV - loan to value - the better your rate, and less your monthly repayments will be).
However you could look in to offset mortgages if there is a specific reason you need to keep the savings instead.

I have an offset mortgage, and it didn’t affect the multiple offered at all. It can be a good way to use your savings, but it offers zero security for the lender, as nothing stops you from spending it.