Is it better to...

[Luckyelephant1]

Pour the majority of savings into a house deposit to reduce monthly mortgage payments, or put a smaller deposit down and maintain a healthier looking savings account?

About to offer on a house at the top end of our budget but getting slightly cold feet. We can afford it but we will definitely need to cut back on certain frivolities for a good while.

What would you do? Forget about actual figures

Sorry I pressed post too soon!!! Forget about actual figures, what is generally the more sensible option?

Will a larger deposit move you onto a different LTV for your mortgage?

As well as considering LTV (you will get a better interest rate if the LTV is 59% instead of 81%) you'll also have to pass income multiplier and affordability checks.

But it also depends on how much your savings are. It might make a difference if you're comparing £1000 vs £10000 but not £10k vs £100k. But also depends on the lender, they all have their own rules and preferences.

If you’re not sure you could get a higher flexible mortgage that allows overpayments. You could pay extra from savings when you are able to.

Four years ago we had to decide like you either to put all our savings into house deposit or keep some savings. We decided to put a lower deposit and see how we would go the following Months after paying out the Mortgage payments. As we were in a 2 year fixed rate Mortgage we saved up and also had the cushion of the savings and paid a lump sum after the first two years. We are coming up to another 2 years and shall again be paying a lump sum from savings therefore reducing the mortgage.

No, not unless we put every penny of savings in which we definitely won't do.

@Taz0032 I think we'd be most likely to do what you did, we just have to be disciplined and make sure we do actually make the overpayments as its all too easy to put the money towards savings or something else!

Why not get an offset mortgage? Then you can keep your savings in that (instant access if you need them) but while they sit in the savings account they offset what you owe on your mortgage and you only pay interest on the difference. Best of both worlds.

I would keep more savings. You never know what might happen in the future and if rates go up and you need to take more out the house later you will be worse off.