Why your deposit matters
The loan a lender offers mostly depends on your income, so your deposit adds directly to the price you can afford. A bigger deposit also lowers your loan-to-value, which often unlocks better rates: rates commonly improve at bands such as 90%, 85%, 75% and 60% loan-to-value.
Most lenders need a deposit of at least 5% to 10% of the price.
Worked example
On a £50,000 income at 4.5 times, you could borrow about £225,000. With a £25,000 deposit you could afford about £250,000; with £50,000, about £275,000. The payment on the £225,000 loan at 4.5% over 25 years is £1,250.62 a month either way.
Remember the other costs
Keep some savings back for stamp duty, legal fees, surveys and moving costs.
This is an estimate. Lenders make their own decision based on your full circumstances and credit history.
Inputs for the home loan borrowing calculator with deposit
Annual income
Your gross annual income.
Income multiple
4.5 times is common.
Deposit
The savings you'll put towards the purchase.
Interest rate (per year)
The annual interest rate on your mortgage. The rate shown is only an example, so enter the rate from your quote.
Term
How many years you'd repay over. A longer term lets you borrow more for the same payment but costs more interest.
CALCULATOR QUESTIONS
Home loan borrowing calculator with deposit questions
Does a bigger deposit let me borrow more?
Not usually; the loan depends mainly on income. But a bigger deposit raises the price you can afford and can get you a better rate.
How much deposit do I need?
Usually at least 5% to 10% of the price.
What is loan-to-value?
Your mortgage as a percentage of the property's price or value. Lower LTVs often get better rates.
What other costs should I save for?
Stamp duty, legal fees, surveys and moving costs.