Deposit
The amount the borrower can contribute towards the cost of buying a property — the ‘deposit’ — is a major consideration. Because most mortgage loans are secured on the value of the property, mortgage providers prefer borrowers who can provide large deposits: the smaller the loan, the lower the lenders’ risk. And the larger the deposit, the lower the borrower’s monthly repayments will be, which reduces his or her outgoings and improves the affordability criteria from the lender’s point of view. In the current financial climate, most lenders expect borrowers to deposit at least 5% of the property’s purchase price.