Home & property · 6 min read
How much cash do I actually need to buy a home?
The deposit is usually the biggest number in a home-buying plan, but it is not the whole cash requirement. A stronger plan separates the usable deposit from transaction costs and from the money you want to keep after completion.
Keep the deposit separate
Your deposit is the part of the purchase price not covered by the mortgage. Keeping that number separate makes it much easier to understand loan-to-value and to compare different property-price scenarios.
Add the transaction costs
Depending on the purchase, costs can include property purchase tax, conveyancing, searches, valuation or survey costs, mortgage fees and removals. The exact amount varies, so treat these as a separate planning pot rather than quietly taking them out of the deposit later.
Leave something for after completion
A purchase can create immediate costs for furniture, repairs, utilities and other practical items. Using every available pound on the transaction can leave the household more exposed immediately after moving.
Model more than one property price
A useful plan compares a comfortable target with a stretch target. That shows how much extra deposit, tax, borrowing and monthly payment a higher purchase price would create before you start emotionally anchoring to a property.
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