Increasing the deposit you put down when buying a new property can significantly reduce the interest rate you have to pay. First time buyers looking for their first mortgage could be looking at rates of around 6% with a 5% deposit (ballpark figure) but this could reduce to around 5.75% with a 10% deposit.
Another thing to consider is that if just putting down a five percent deposit many lenders will also charge a higher lending fee, which will put up the cost of a mortgage considerably.
Many lenders will also charge a higher fee when putting down a smaller deposit, so it always pays to put as large a deposit as you can to reduce the cost of your mortgage and get the best deals available.
Arrangement fee's for mortgages have also gone up recently. You can still get deals with zero arrangement fee's, but they are generally at a high percentage rate. Typical fees range from around £299 to £2000 or more.
It is therefore vital that you shop around to find the best deals, an independent mortgage broker will have access to the whole market, and should be able to find the right mortgage to suit your individual needs.
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