The £5K deposit mortgage?

[Juliansfunkyshoes]

Can anyone tell me the downsides to using the new initiative where you only need 5K deposit?
the rates aren’t competitive but still comparable to rent so wouldn’t stretch us too much?

That you might end up in negative equity

More interest to be paid overall and higher repayments compared to a bigger deposit.

It really depends , if you want to stay in the property for a long time. If so, negative equity is not a big problem. You need to have a budget for repairs.

Thanks all.

Not concerned about negative equity as would be looking to stay through child’s school years minimum. Also live in an area of London that’s on the up so I can’t see house prices ever taking a big fall outside something catastrophic happening to the economy.
The repayments are obviously high but it appears the aim is to pay off a decent chunk in that time? A quick calculation shows a 400K house over five years we would pay 138K including interest. I guess then it makes it easier to switch provider?