Me and Mrs-g want to buy a house and have been saving our deposit. Obviously the bigger the deposit the better the rate you can borrow a mortgage at. Currently we are renting and once we buy it looks like our outgoings will be much the same as they are now, and at the moment we are manageing to save a lot each month. My question is, bearing in mind that month on month we have a lot of spare money, whats to stop me taking out an unsecured loan to accelerate the deposit saving process? The monthly repayments on the loan would be added to my outgoings when calculating if we could afford the mortgage, but as we have more than enough to cover that wis there something else I am missing here that means it is a bad idea?

We have an appointment booked with an IFA so I will ask them, just impatient so thought I would ask here quickly first.

it will reduce the amount you can borrow.

Ah ok.

So assuming that we only want to borrow (morgage) around 55% of what the banks say they would lend us then maybe this would be workable.

I’ll speak to the guy on Saturday

As Jam bo says they will use this as a measure of ‘affordability’ and you may not be able to ‘afford’ to borrow as much.

It’s quite complex but the IFA should model it for you if they are good.

I was in a similar position and the loan i had at the time was easy to pay with the mortgage but limited what mortgage we could have.
Upon clearing the loan the range of products was opened up further.

If you have loads spare why don’t you overpay your new mortgage* each month for the next few years, then remortgage further down the line on a better rate.

*make sure you get a mortgage that allows overpayments.