• Rachael Panteney

Can I borrow more with a bigger deposit?

A common question

When assessing how much you can borrow, the mortgage companies primary concern is "Can they afford to pay this back?"

Gone are the days of just using a simple method of 4.5 x your income, instead each lender uses a different affordability calculator to assess what you can afford.

They'll look at your income, utility bills and debts, but also at your lifestyle expenses - the gym, eating out, childcare costs etc.

As the size of your deposit doesn't affect your monthly cashflow, then no - having a bigger deposit doesn't immediately translate into having a larger mortgage.

What is does impact, is the amount you'll pay for that mortgage.

Mortgage rates are based on loan to value bandings. (95%, 90%, 85% 80% and so on). The bigger the deposit, the lower the loan to value and in turn the lower your interest rate will be.

You'll pay a higher rate if you borrow £200,000 with £20,000 deposit than you will borrowing £200,000 with a £40,000 deposit.

Some lenders will take the fact you can have a lower rate into account for affordability purposes boosting your borrowing power slightly.

So, bigger deposit doesn't necessarily mean bigger mortgage, but bigger deposit does equal lower interest rate - which really, is the bit we all care about.

Since the coronavirus outbreak, lenders have tightened their lending criteria so it is more important than ever to use a mortgage adviser to make sure you get a the most suitable mortgage for your circumstances.

Get in touch to book a free, no obligation meeting.

Call Rachael on 01323 436680 or email Rachael@Willowtree-fs.co.uk

Willow Tree Financial Services.

A6 Chaucer Business Park,

Dittons Road, Polegate.

East Sussex, UK.

BN26 6QH

01323 436680


The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested. Your home may be repossessed if you do not keep up repayments on your mortgage. 

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