Deposit vs savings & bigger mortgage

[Ruralbliss]

I now have an offer on my house & have made an offer on a house to the numbers are less conceptual now.

I'll have pretty much depleted my savings in blinging up current house ahead of selling so ideally would like to hold monies back from deposit in new house (needs nothing doing as new build but I'd like to spend some cash on the blank canvas of a garden with seating, raised beds etc.

How to decide how much for savings vs how much to go towards deposit and thus keeping monthly payments lower?

I'm starting with the principle of having 6 months outgoings in savings is a good emergency fund so that gives me a number add a bit more for garden improvements and possibly some new furnishings and the rest of proceeds from sale towards deposit?

Am I being daft? I can't seem to think straight anymore and no partner this time so keen to ask here what I might have missed with calculations.

I don't want to have low savings but I don't want a high monthly mortgage bill either.

What difference does it make to your LTV/size of deposit? If you can get into a better band of LTV then this can bring the interest rate down and is worth doing.

I would go for as large a mortgage as possible as long as repayments are affordable. Interest rates now are at an almost all time low so its never been cheaper to borrow money. And you can always make overpayments to mortgage if you find you have excess left at the end of your home improvements.

As long as it doesn't push you into a higher ltv bracket or cause difficulties with affordability I'd err on the side of a larger mortgage. Most mortgages allow you to overpay by 10% a year so if you don't need the money you can always pay it back.

I think you have to be honest about whether you are a saver or a spender. If you tend to spend money that you have, perhaps justifying it as an investment in… the house.. the new capsule wardrobe etc… then keeping the money safely tucked away in your home equity might be good?

Our plan is to have a 10k buffer and that is it. We will live with the house and save up for improvements. In our case, like yours, the house is livable, and in fact very nice, just not to our taste. We are taking on a (for us) biggish mortgage though. We will also aim to overpay, so improvements will come from whatever is left. Our mortgage is fixed for 5 years, so would like that to be as low we can get it for renewal in case rates go up.

Oh wow thanks everyone for your wise thoughts and ideas.

It does of course make sense to have a slightly larger mortgage with interest rates so low plus need to consider LTV bands as have no idea what they are but I'm considering putting 50% or thereabouts mortgage to make monthly repayments affordable once the kids dad stops child maintenance for two of them - imminent as could have stopped in January when they turned 18.

Also very good point regarding spending/saving habits. I've got an idea that I don't want to be strapped for cash as I have been in this place and perhaps would rather the option to save spare money each month than dip into savings as the psychological impact of doing that is horrible.

I will run the numbers again with variations as mortgage provider has told me I'm borrowing way under what they are prepared to lend.