Flat below budget: lower mortgage or keep back some of deposit?

[feelingnaive]

We’ve put in an offer on a flat that is perfect for us and £100k below our budget (flat costs £415k).

In this situation, is it generally better to put down our full deposit and have a lower mortgage or hold back some of the deposit to keep as savings? We’d want to redecorate and put in a new kitchen for personal taste but no major works required.

Chatting to our mortgage broker tomorrow but curious to hear opinions! FTB.

Can you get an offset mortgage? That way you have the flexibility to take money out from mortgage e.g. if you need to fund a new kitchen, or to only pay interest in the portion against which you don't have savings? First direct do a great offset mortgage product and have really good customer service (I don't work for them).

Personally I'd keep a chunk back, purely because cash in the bank gives flexibility for anything that comes along. You can always overpay the mortgage if you change your mind.

If it was more expensive but still needed work to be done, how would you have funded it?

When you have the work done, will that then be reflected in its new price?

I would do a half-way point between the two. Keep back a little of your deposit but only about half as much as you theoretically could. It's good to have more affordable monthly payments but it is also really good to have savings in case your boiler packs in and you suddenly need £10k for a new one.

Agree with @KihoBebiluPute. Having a pot for some future repairs or works is sensible, as is having a slightly smaller mortgage. Just because you can borrow X amount of money now doesn't mean you should.

See if you've got enough to get to the next LTV "step" and a lower interest rate. Then keep the rest for refurb/emergency fund.