Should a FTB borrow as much as possible

[PoundMan]

Interesting thread @jwof2006 , I too have a similar query as a potential first time buyer. Most financial advise out there tends to suggest that it is best to put down as large of a deposit as possible in order to avail of a lower LTV and lower interest rates and ultimately have less money to pay back. I have enough money saved that I could probably afford a 20-30% deposit, but I am wondering in my case if it might be a mistake not to take advantage of first time buyer status of only needing to put down a 10% deposit. First Time Buyer status is something that can only be used once so I'm just worried of the opportunity cost of not leveraging it whilst I have the chance. I would be keen to hear some thoughts on this.

 

[DublinHead54]

My opinion is always to separate the purely mathematically savings and consider your own personal situation. The powers that be have decided that first time borrowers can borrow 4x income. When taking out your mortgage you should start with the maximum borrowing you can afford against the house you want to buy i.e a 90% LTV and 10% deposit and then look at your personal situation and work back from there.

If you are buying a house which doesn't need major renovations, you don't have any large expenses in the short to medium term, and plan to stay in the house long term. Then you should put down a bigger deposit.

If you are buying a starter home and plan to trade up in 5 years you need to factor in the need for a deposit later down the line. That could mean you put down a smaller deposit to retain flexibility of not being dependent on selling your house to free up the equity needed as the deposit to trade up.

If interest rates are > savings rates and you have certainty for the medium to long term it makes sense to minimise mortgage.

a bird in the hand is worth two in the bush.

 

[Pinoy adventure]

Interesting thread @jwof2006 , I too have a similar query as a potential first time buyer. Most financial advise out there tends to suggest that it is best to put down as large of a deposit as possible in order to avail of a lower LTV and lower interest rates and ultimately have less money to pay back. I have enough money saved that I could probably afford a 20-30% deposit, but I am wondering in my case if it might be a mistake not to take advantage of first time buyer status of only needing to put down a 10% deposit. First Time Buyer status is something that can only be used once so I'm just worried of the opportunity cost of not leveraging it whilst I have the chance. I would be keen to hear some thoughts on this.

Could you go with the first time buyer and a variable rate,once up and running with the mortgage you could put the balance of the 20/30% off the balance