Save £8,000 on your mortgage

• The size of the deposit at your disposal when applying for a mortgage has rarely been so important. Two years ago, even if you had little or no money available as a downpayment on a house, you still had a wide range of options, and would not have had to pay much more than those with massive deposits.
• All that has changed. There is now a significant difference in the rate you can access depending on just how much cash you can hand over upfront, and it's getting worse by the week.
• I've put together some tables which show just how hard you will be hit if you only have a relatively small deposit.
  
• The long-term fixers
  Let's start with what in my view is the most sensible type of mortgage deal if you are about to buy your first home: five-year fixed rate mortgages . Below I have put together the market-leading deals in each loan-to-value (LTV) bracket, based on a 25-year repayment mortgage of £150,000.
• Now that's pretty shocking isn't it? My table shows that if you only have a 10% deposit (90% LTV) to put down, you will pay around £1,600 a year extra in mortgage payments, compared to a borrower with a 40% equity stake (60% LTV). Over the course of a five year deal, that means you'd pay an extra £8,160 !
• Even the jump between a 60% LTV mortgage and a 70% LTV mortgage is a difference of almost £400 each year, hardly an insignificant sum. And remember, these are the market-leading products. Should you go for a different product, the contrast is even starker.
• The good news is that there is precious little difference between the rates on offer if you have a 20% deposit compared to those with 40% equity burning a hole in their pocket.
  However, if you are unable to convert your 10% deposit into a 20% deposit, then you will end up paying an extra £1,416 a year. That's an extra £4,248 over the course of the three-year deal.
• Once again, while things are pretty close with the very cheapest products on offer, when you move beyond the market-leading rates, wider gaps do begin to emerge - so be sure to shop around .
• Gambling on a tracker
  And finally, I had a look at the variable mortgage products on offer at the moment. Personally I think you have to be crazy to even consider a tracker mortgage at the moment, because I think interest rates will only go up in the near future, not down. But for the sake of balance, here are the best deals on a three-year variable deal.
• There are no products available at 90% loan-to-value on a tracker basis, though certain small building societies (such as Cumberland BS) are offering deals at 85% loan-to-value to local borrowers.
• While there is an obvious anomaly with the 70% LTV deal from the Co-op, which is the market leader by a fair distance, it again shows that those with a 40% deposit face much smaller payments than those with just 20%.
• It's all about choice
  Of course, it's not just about the cheapest products, but also how many different mortgages you can choose from in each loan-to-value band.
• The table below, which comes from mortgage sourcing firm TrigoldCrystal, outlines just how scarce high loan-to-value deals are - and how the situation is getting worse.

By http://www.michaeljackson50.com/