CAN YOU afford to buy a property in Bournemouth with the new five per-cent deposit scheme?

Chancellor Rishi Sunak’s latest Budget includes a government guarantee for 95 per-cent mortgages which he claims will turn ‘generation rent’ into ‘generation buy’. 

Loanbird wanted to ascertain just how much you’d need to earn to buy a property, in each city in the UK.

To do this, they took the average property price in each city, took away a five per-cent deposit to leave the 95 per-cent owed.

They then worked out monthly mortgage repayments and salary needed, based on a mortgage over 25 years with an interest rate of 4.5 per-cent.  

Their research is based on one person buying a property on their own. 

Bournemouth was named in the top five most expensive places to buy property in the study, behind only London, Cambridge and Oxford. 

READ MORE: How the new Budget affects the Dorset housing market

READ MORE: Martin Lewis issues warning to first-time buyers over five per cent mortgages

The average property price in Bournemouth comes in at £294,800.

If you were to buy the average house in Bournemouth with a 95 per-cent mortgage this would you  with £280,000 outstanding. 

This would mean that monthly mortgage repayments would come in at a whopping £1,556.66. 

Loanbird multiplied the monthly repayments by three, ascertaining this would be the amount needed to live comfortably. 

This means that your monthly take-home pay as an individual would need to be £4,669,98.

Making the total salary needed for a single adult to buy an average-price property in Bournemouth £81,638.64. 

Bournemouth Echo:

A single person needs to ears £81,638.64 a year to buy the average priced property in Bournemouth (image PA). 

What is a 95 per-cent mortgage?

A 95 per-cent mortgage enables you to borrow up to 95 per-cent of the purchase price of the property you want to buy, with the remaining 5 per-cent made up of your deposit.

Having a five per-cent deposit could help you get on the property ladder sooner, as you’ll need to save less of a lump sum.

However, the lowest mortgage interest rates are reserved for borrowers with large deposits of around 40 per-cent or more, but there are competitive deals for buyers with just 5 per-cent to put down.

Buyers should also be aware that a smaller deposit does mean that your choice of mortgages will be more limited.

Working out how much you need to save

If you're looking to future and hoping to buy a property then it's crucial that you work out early on how you will need to save and what you'll be able to afford.

Using a salary calculator can help you set your sights on how much you will need to earn whilst a mortgage calculator will show you how much you can borrow.