Mortgage Possibility?

[Scarlett]

I was wondering whether anyone knew the figures nowadays for people wishing to get on the ladder. ie- what would they have to be earning/how much would their deposit need to be (in %), are interest-only mortgages a thing of the past, if they wanted to buy a £160,000 house for example? My friend is 45 and very frustrated that on his £20k salary he believes he will never be able to buy a house. Is he correct?

[Hymie]

Based on the numbers you quote, if your friend was able to find a bank/building society willing to loan him 4 times his annual salary – then he would need a deposit of £80k in order to buy a property at £160k.

However I would advise that he has an amount of at least an extra £5k to cover costs involved in the purchase (solicitor fees, survey etc).

[CheekyChops]

Well I earn roughly that amount and I've bought a house. Not a £160,00 one mind, can't afford that!

As Hymie has said, you can usually borrow 4 or 4.5 x your salary so your friend is looking at a mortgage of roughly £80,000 - £90,000. He will also need a deposit of about 10% of purchase price so I would say that he should be looking at buying around the £100,00 mark maximum.

Don't forget that there are also givernment schemes to help first time buyers get on the ladder. Another thing to consider is his age, at 45 a 25yr mortgage will take him to 70 before its repaid and I wouldn't like to be repaying a mortgage at that age.