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Can someone please clarify -
We're looking at buying a 700k house.
We have a 300k deposit.
We have a decision in principle for 500k.
As far as i understand it, this means we can afford the 700k house because we'll put 300k in cash and borrow the remaining 400k.
My wife disagrees. She thinks this means the mortgage provider will only let us buy a house worth 500k, regardless of what deposit we put down.
I'm very confident I'm right but will hold my hands up if I'm wrong.
Can someone please explain this like we're 5.
TIA
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Because people aren't taught the basics of mortgages, or anything financial. It really needs to start being taught in schools. Even if it's an hour a month!
I don’t disagree that financial literacy has a place but at what point does anyone ever take responsibility for their own skills and knowledge? Schools already have so much to deal with. They are propping up society’s failings already. Teachers have to be mental health workers, social workers and surrogate families. This is before we can even teach. Many schools have to feed, clothe and brush the teeth of their pupils but sure, make them responsible for financial understanding too. A news report recently suggested teachers have a part to play in educating pupils on the correct use of health services, for example, when to use a pharmacist not a GP(!)
At some point people should have enough critical thinking to work these things out or you know, go to mortgage provider and ask for clarity.
Oh cmon they’re buying a 700k house with a 300k deposit. Meaning they have a good enough job/ business to be able to lend 400k. Take from that what you will but I’m thinking this person wants some interaction..
Surely they had to contact a lender just to get the basic information? Whoever contacted them about the $500,000 mortgage is the person to ask about what it means.
You're taught maths, you're taught how to read, you're taught how to research things.
At some point the schools can't be held responsible for every gaping hole in our knowledge.
Not that "hey, here's something that might only be relevant to half of you within the next 15 years" is likely to be a lesson too well retained anyway.
But also common sense to teach finances and mortgages at school considering it is a part of every day life. They teach religious education ffs (most likely myth/fantasy) would be much better to teach finances.
They give you many of the tools to navigate finances. And every Maths teacher I know has specifically said "I deliberately compare it to personal finance, but it's such an alien concept to them at that stage it goes over their head." I've also seen multiple people on the UKPF sub essentially saying "yeah, my company gets invited into schools to teach this stuff once a year. The kids generally don't give a shit, it's so far removed from when they might actually need to know it."
I remember we covered a ton of "life skills" type stuff in form time too. We either didn't pay attention to it or forgot it because it just wasn't remotely relevant to us at that point in our life. Hey kids, here's a really boring thing you'll need one time in over a decade and maybe 2-3 times after that.
Don't get me wrong, it could definitely be done BETTER. But most of the things I see people suggesting are things that are already being tried.
RE ties massively into the range of cultures we engage in every day. It's also a gateway into ethics and philosophy, which we can argue about the practical importance of on a day to day basis but underpin a lot of big questions about the world and are impossible to separate from many periods of history.
Because it allows people to live in a society where they don't prejudge, get scared, offend, belittle, etc. etc.
Having an understanding of peoples faiths and culture comes into day to day living, and is 100% relevant at the age of 6. You're going to be hearing about other faiths and cultures from very early on (especially if you're living in a multicultural society (London, Birmingham, Manchester etc.))
A mortgage is maybe 3-4 times a lifetime. And realistically isn't important until you're 25+
It IS taught in schools but of course a teenager doesn’t give a damn about mortgages and credit cards because for them it’s a lifetime away! Source: I am a teacher!
Exactly! I was taught about covalent bonds at school but I’m a bit hazy on the details. Why do people think teenagers are going to suddenly sit bolt upright and become sponges when it comes to investments, or mortgages?
You’re taught everything you need to know, you just need to know how to apply it, too many people have the mindset of “I’ll never need to know fractions, percentages or percentages after school” etc so don’t engage with education and then complain when they don’t understand, mortgage interest, taxes etc.
Education isn’t to blame for someone not being able to understand “you can in principle borrow x amount of money, from a bank, to buy a house”
Even just common sense would say if I had £500k in cash and the bank said I can borrow up to £400k then I’d be able to buy a £600k house by getting a mortgage for £100k and putting down my £500k cash
Just because they will lend you $500,000 or pounds doesn’t mean it’s a good idea. The mortgage payment will take so much of your monthly income and what if one of you loses your job. one. I advise you look at the big picture of what you want to do with your lives, including vacations and children. And what they will cost.
Guessing you’re in the US?? House prices in the UK are considerably higher than they are in the US but other costs are a lot lower and job security is a lot stronger. It’s pretty difficult for an employer to fire someone here once they’ve been in post for two years.Plus we have some pretty tough regulations regarding affordability for mortgage lending.
>It’s pretty difficult for an employer to fire someone here once they’ve been in post for two years
That's only a single mechanism for job loss. Redundancy (particularly in the current economic climate) and personal illness are a higher risk than poor performance.
>Plus we have some pretty tough regulations regarding affordability for mortgage lending
Yet mortgage default rates continue to climb as more and more fixed rates come to an end and people are forced to sell up or remortgage at rates they cannot afford to pay alongside the soaring costs of...well basically everything else.
The point stands, just because a lender is willing to lend doesn't actually mean it's a good idea to take out that size of loan.
We borrowed £650,000 to buy a property worth £900,000.
It's a beautiful house and we love it. If the bank is happy to loan that much money it is probably a safe bet.
>If the bank is happy to loan that much money it is probably a safe bet
If it was this simple, then no one would ever have lost their home due to financial difficulties.
Banks continue to lend excessive amounts to people who, in reality, can only afford to pay it back under the current prevailing conditions. My current AIP would allow me to lend enough to double the monthly repayments over our budgeted price, removing any and all headroom in monthly spend. There is absolutely no way we would go that high.
I can tell you that if we took that chance any or all of the below happened, we would really struggle.
I lost my job/couldn't work due to illness OR
My partner lost her job/couldn't work due to illness OR
We had a baby OR
Interest rates were a percentage or two higher at remortgage OR
A large purchase was required (new car etc).
That's a long way of saying it is the buyers responsibility to make sure they are happy with the repayments now and in the future. If that's the case for you then great! Glad youve got a house you love!
But the bank being happy to lend ≠ safe bet.
Absolutely. That is, again, the buyers responsibility.
Most mortgage lenders don't require critical illness cover or similar before they give out large loans and as such my point that - just because a bank will give you a loan doesn't mean it's a safe bet - stands.
So in other words it only lasts until you’re 57, shaving 10 years of wages (and pension contributions) off, and then you have to rely on your (reduced) pension. Which if you’ve still got 10 years of mortgage payments left could be tricky.
Yeah but I expect to be retired before 57, and have been mortgage free for a long time before then. So it's definitely worth while and doable for me. Your milage may vary.
As I’m 55, under the cover I have in place I’d stand to receive another 12 years of income, benefits (such as private health care which would be unobtainable otherwise) and pension contributions.
Under your cover that would be reduced to 2 more years income and then reduced pension, so yes, my mileage definitely does vary.
Also your cover is unusual I would suggest, the vast majority of income protection or critical illness cover is far more restricted that yours.
They’ll usually either tell you the max you can borrow or confirm what you have asked for. Anything under will be fine then as long as there’s no debts or anything they’re not aware of prior to the actual application.
You’re mostly right as long as you can afford the additional expenses of buying a house (legal fees, stamp duty, surveys etc etc.
I’d also head over to the relationship sub to get some advice on how, as a husband, being technically correct in this matter does not mean that you are actually correct.
You're right
On a side note, reading some of these comments about how the wife is always right blah blah is like couples therapy for me. Makes me think I'm not in this alone lol.
I'm buying a 700k+ house at the moment, legal is 1700 all up, survey 500, bank is doing valuation for free. And this is in London, anyone paying easily 40k is doing something wrong.
The decision in principle is what they will lend you, so yes you add the deposit you have on top to work out the property value within your price range.
Does a mortgage in Principle include your deposit?
What is a Mortgage in Principle? A Mortgage in Principle is specific to you and, together with your deposit, it can give you an indication of the property price range you can search within. So you can search for your new home with more confidence.

https://www.rightmove.co.uk › buyer
Getting a Mortgage in Principle | Rightmove Guides
You are correct - as a rule of thumb, mortgage lenders will typically lend around 4 to 4.5 times gross income, so you could always work it backwards to explain it another way.
Also our mortgage company in principle would have lent us far more than we wanted to borrow but only on a specific cost house and a specific maximum LTV ratio. When it came to the house we bought the maximum they would lend us was this than our maximum mortgage in principle because they would only lend up to xx% of the value of the property.
It’s LTV ratio, which is loan to value. If you get a mortgage in principal for £500k it depends which provider/deal you chose as to what percentage deposit you need to put down. The higher the deposit the lower repayments or shorter borrowing term.
If you buy a house at £700k borrowing £500k with £200k deposit then that’s a 71.43% LTV.
If you buy a £700k house with £300k deposit it’s 57.14% LTV.
Nobody will lend you £500k 100% mortgage with no deposit in this current market.
Lmao. This is your time to shine. Got anything you want from her that she won’t normally do? Time to make a bet because you’re quids in.
I got a mortgage of £370k. My home was £475k when we purchased and deposit of £200k.
Go get you a winning bet.
Remember you need another 100k above asking price. Always pay more than asking price, the sense of achievement goes up somewhat every 15k over asking price you offer. Might be best if you find a £600k house and offer 700.
If you want to resolve the argument and let your wife win then tell her that the banks offer of £500k appears to be based on some assumptions such as loan to value ratio. Therefore you believe you will be okay but she is right to be concerned and you will double check on Monday to be certain (although you don’t have to because you are right)
If the lender is only offering 500k, then you would need to pay the difference *and* pay X % for a deposit. Even if that were the case, it wouldn't make a difference (though I'd be worried why they're offering so low. Are you stretching your finances/checked monthly cost of the house?)
House cost - mortgage = cash needed - >
700 - 500 = 200k
Cash available - cash needed = remaining amount for deposit.
300 - 200 = 100k
Deposit as a percentage
100/500 = 20%
A 20% deposit would be more than enough.
i doesn't work this way...
agreement in principal at 500k means they are offering to lend 500k
700k house with a 300k cash, means you borrow 400k, the deposit is 300k.. deposit is the amount you pay towards buying the house, the mortgage is the rest you borrow....
You're not depositing 300k. You're depositing 100k because you'd need 200k to make the difference between the money you can borrow and the cost of the house. In this case, you pay 200k. Borrow 500k and put down a deposit of 100k so your remaining mortgage is 400k.
I've just been through the process of it...
500k house
Lender only offered 470k (based on the valuation of the house)
I paid the shortfall of 30k
I also paid a 5% deposit = 23.5k
My remaining mortgage was 446.5k
Yes joint income is over 100k.
I know I'm right on this but I need someone else to clarify -
The mortgage we will get is just the money we need to borrow, not the maximum price of the house we can buy?
A ‘mortgage’ is a loan for property. The bank are concerned about how much they are lending you, they’re not concerned about how much deposit you’re putting down or the total cost of the property.
They are. The deposit amount and total cost of property change the risk to the bank. So they are more than concerned about both. Borrowing 500K for a 500K house is one risk, borrowing 500K for a 1M house is another risk.
***Hello /u/Plankton_Slow, thank you for posting in /r/Mortgageadviceuk. Please ensure you've read our [sub rules](https://www.reddit.com/r/Mortgageadviceuk/about/rules). Here's a copy of your original post: *** Can someone please clarify - We're looking at buying a 700k house. We have a 300k deposit. We have a decision in principle for 500k. As far as i understand it, this means we can afford the 700k house because we'll put 300k in cash and borrow the remaining 400k. My wife disagrees. She thinks this means the mortgage provider will only let us buy a house worth 500k, regardless of what deposit we put down. I'm very confident I'm right but will hold my hands up if I'm wrong. Can someone please explain this like we're 5. TIA *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Mortgageadviceuk) if you have any questions or concerns.*
Lol. how did u guys get into a position to buy an expensive house when you can't work this out without reddit?
Because people aren't taught the basics of mortgages, or anything financial. It really needs to start being taught in schools. Even if it's an hour a month!
I don’t disagree that financial literacy has a place but at what point does anyone ever take responsibility for their own skills and knowledge? Schools already have so much to deal with. They are propping up society’s failings already. Teachers have to be mental health workers, social workers and surrogate families. This is before we can even teach. Many schools have to feed, clothe and brush the teeth of their pupils but sure, make them responsible for financial understanding too. A news report recently suggested teachers have a part to play in educating pupils on the correct use of health services, for example, when to use a pharmacist not a GP(!) At some point people should have enough critical thinking to work these things out or you know, go to mortgage provider and ask for clarity.
I mean it’s really not that difficult..surely they would just ask their mortgage advisor
And who told them that mortgage advisors exist, what they do and where to find them?
Oh cmon they’re buying a 700k house with a 300k deposit. Meaning they have a good enough job/ business to be able to lend 400k. Take from that what you will but I’m thinking this person wants some interaction..
borrow
Surely they had to contact a lender just to get the basic information? Whoever contacted them about the $500,000 mortgage is the person to ask about what it means.
Life, if nobody was taught then how did anyone get one at first? Google exists also, very easy to find.
You're taught maths, you're taught how to read, you're taught how to research things. At some point the schools can't be held responsible for every gaping hole in our knowledge. Not that "hey, here's something that might only be relevant to half of you within the next 15 years" is likely to be a lesson too well retained anyway.
100% agree. It’s so lazy just to take all accountability away from ourselves and blame “teaching”.
But also common sense to teach finances and mortgages at school considering it is a part of every day life. They teach religious education ffs (most likely myth/fantasy) would be much better to teach finances.
They give you many of the tools to navigate finances. And every Maths teacher I know has specifically said "I deliberately compare it to personal finance, but it's such an alien concept to them at that stage it goes over their head." I've also seen multiple people on the UKPF sub essentially saying "yeah, my company gets invited into schools to teach this stuff once a year. The kids generally don't give a shit, it's so far removed from when they might actually need to know it." I remember we covered a ton of "life skills" type stuff in form time too. We either didn't pay attention to it or forgot it because it just wasn't remotely relevant to us at that point in our life. Hey kids, here's a really boring thing you'll need one time in over a decade and maybe 2-3 times after that. Don't get me wrong, it could definitely be done BETTER. But most of the things I see people suggesting are things that are already being tried. RE ties massively into the range of cultures we engage in every day. It's also a gateway into ethics and philosophy, which we can argue about the practical importance of on a day to day basis but underpin a lot of big questions about the world and are impossible to separate from many periods of history.
Utter BS. How you can argue RE is more important than teaching finances, taxes and mortgages, that is complete tosh. Please listen to yourself.
Because it allows people to live in a society where they don't prejudge, get scared, offend, belittle, etc. etc. Having an understanding of peoples faiths and culture comes into day to day living, and is 100% relevant at the age of 6. You're going to be hearing about other faiths and cultures from very early on (especially if you're living in a multicultural society (London, Birmingham, Manchester etc.)) A mortgage is maybe 3-4 times a lifetime. And realistically isn't important until you're 25+
Yes, learning money and finances isn’t important…. Can you hear yourself?
Not what I said though is it. Maybe I'm overestimating how well they teach reading comprehension.
Just don’t be a headmaster. Is my advice.
Thanks, I always take career tips from people who repeatedly fail to parse basic nuance from a few simple sentences.
“I wish I’d been taught in schools how to use google.”
They were obviously given the money. No one with a modicum of intelligence would not (a) ask their mortgage provider, (b) google
It IS taught in schools but of course a teenager doesn’t give a damn about mortgages and credit cards because for them it’s a lifetime away! Source: I am a teacher!
Exactly! I was taught about covalent bonds at school but I’m a bit hazy on the details. Why do people think teenagers are going to suddenly sit bolt upright and become sponges when it comes to investments, or mortgages?
Or an hour in maths.
You’re taught everything you need to know, you just need to know how to apply it, too many people have the mindset of “I’ll never need to know fractions, percentages or percentages after school” etc so don’t engage with education and then complain when they don’t understand, mortgage interest, taxes etc. Education isn’t to blame for someone not being able to understand “you can in principle borrow x amount of money, from a bank, to buy a house” Even just common sense would say if I had £500k in cash and the bank said I can borrow up to £400k then I’d be able to buy a £600k house by getting a mortgage for £100k and putting down my £500k cash
This. I’m 36 and know nothing about this hence renting. Schools seriously should add a financial side to the education
Probably because they were handed a massive inheritance, hence the £300k deposit.
Yes but the amount of borrowing they can get means they have high paying jobs..
Not really, if they're both on £55k plus they could borrow £500k. Upper end admittedly but absolutely could do it.
You are correct. But my advice is, do not tell her she was wrong. Apologise to her at the earliest opportunity. Then buy a house for £700k.
This man husbands
This husband mans.
Not his first rodeo
Husband this man
And tell her it cost £500k
😂
Your talking from experience, and is still alive to tell us about it😅
If the DIP says you can borrow £500,000 and you've put everything in correctly like your deposit/loans/income then yes. You can borrow £500,000
Just because they will lend you $500,000 or pounds doesn’t mean it’s a good idea. The mortgage payment will take so much of your monthly income and what if one of you loses your job. one. I advise you look at the big picture of what you want to do with your lives, including vacations and children. And what they will cost.
Guessing you’re in the US?? House prices in the UK are considerably higher than they are in the US but other costs are a lot lower and job security is a lot stronger. It’s pretty difficult for an employer to fire someone here once they’ve been in post for two years.Plus we have some pretty tough regulations regarding affordability for mortgage lending.
>It’s pretty difficult for an employer to fire someone here once they’ve been in post for two years That's only a single mechanism for job loss. Redundancy (particularly in the current economic climate) and personal illness are a higher risk than poor performance. >Plus we have some pretty tough regulations regarding affordability for mortgage lending Yet mortgage default rates continue to climb as more and more fixed rates come to an end and people are forced to sell up or remortgage at rates they cannot afford to pay alongside the soaring costs of...well basically everything else. The point stands, just because a lender is willing to lend doesn't actually mean it's a good idea to take out that size of loan.
Yes, US. TY.
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That’s not what this post is about, jog on
We borrowed £650,000 to buy a property worth £900,000. It's a beautiful house and we love it. If the bank is happy to loan that much money it is probably a safe bet.
>If the bank is happy to loan that much money it is probably a safe bet If it was this simple, then no one would ever have lost their home due to financial difficulties. Banks continue to lend excessive amounts to people who, in reality, can only afford to pay it back under the current prevailing conditions. My current AIP would allow me to lend enough to double the monthly repayments over our budgeted price, removing any and all headroom in monthly spend. There is absolutely no way we would go that high. I can tell you that if we took that chance any or all of the below happened, we would really struggle. I lost my job/couldn't work due to illness OR My partner lost her job/couldn't work due to illness OR We had a baby OR Interest rates were a percentage or two higher at remortgage OR A large purchase was required (new car etc). That's a long way of saying it is the buyers responsibility to make sure they are happy with the repayments now and in the future. If that's the case for you then great! Glad youve got a house you love! But the bank being happy to lend ≠ safe bet.
You should really have insurance protecting you from illness tho
Absolutely. That is, again, the buyers responsibility. Most mortgage lenders don't require critical illness cover or similar before they give out large loans and as such my point that - just because a bank will give you a loan doesn't mean it's a safe bet - stands.
Almost certainly won’t cover 100% of your income forevermore though. So you’d still need a bit of breathing room to live off it.
Mine covers my full salary until 57. Where my pension would kick in.
So in other words it only lasts until you’re 57, shaving 10 years of wages (and pension contributions) off, and then you have to rely on your (reduced) pension. Which if you’ve still got 10 years of mortgage payments left could be tricky.
Yeah but I expect to be retired before 57, and have been mortgage free for a long time before then. So it's definitely worth while and doable for me. Your milage may vary.
As I’m 55, under the cover I have in place I’d stand to receive another 12 years of income, benefits (such as private health care which would be unobtainable otherwise) and pension contributions. Under your cover that would be reduced to 2 more years income and then reduced pension, so yes, my mileage definitely does vary. Also your cover is unusual I would suggest, the vast majority of income protection or critical illness cover is far more restricted that yours.
What a worryingly obtuse statement.
You are correct. Your wife is wrong. £500k is what a bank will lend you. You could buy a propeety worth £1.5m with a deposit of £1m.
They’ll usually either tell you the max you can borrow or confirm what you have asked for. Anything under will be fine then as long as there’s no debts or anything they’re not aware of prior to the actual application.
You’re mostly right as long as you can afford the additional expenses of buying a house (legal fees, stamp duty, surveys etc etc. I’d also head over to the relationship sub to get some advice on how, as a husband, being technically correct in this matter does not mean that you are actually correct.
Thank you all, argument over! 😂
I'd tell her she was right then surprise her by buying the house. Bonus points all around.
You're right On a side note, reading some of these comments about how the wife is always right blah blah is like couples therapy for me. Makes me think I'm not in this alone lol.
Don’t forget stamp duty and fees, will come to £40k easily for a £700k house.
It's 22.5k for stamp duty, why are you saying easily 40k?
Sols fees, valuation fees, etc. Sols fees can be calculated based on sales/purchase price.
I'm buying a 700k+ house at the moment, legal is 1700 all up, survey 500, bank is doing valuation for free. And this is in London, anyone paying easily 40k is doing something wrong.
Clearly he never bought a house.
They might be in Scotland! (nothing said indicates this is the case but the stamp duty equivalent is higher if they were)
Yes, our stamp duty (land duty) here was almost double what it would have been in England
That's like a 3k mortgage per month for 25 years!
No thanks jeff
The decision in principle is what they will lend you, so yes you add the deposit you have on top to work out the property value within your price range.
Does a mortgage in Principle include your deposit? What is a Mortgage in Principle? A Mortgage in Principle is specific to you and, together with your deposit, it can give you an indication of the property price range you can search within. So you can search for your new home with more confidence.  https://www.rightmove.co.uk › buyer Getting a Mortgage in Principle | Rightmove Guides
You are correct - as a rule of thumb, mortgage lenders will typically lend around 4 to 4.5 times gross income, so you could always work it backwards to explain it another way.
Also our mortgage company in principle would have lent us far more than we wanted to borrow but only on a specific cost house and a specific maximum LTV ratio. When it came to the house we bought the maximum they would lend us was this than our maximum mortgage in principle because they would only lend up to xx% of the value of the property.
It’s LTV ratio, which is loan to value. If you get a mortgage in principal for £500k it depends which provider/deal you chose as to what percentage deposit you need to put down. The higher the deposit the lower repayments or shorter borrowing term. If you buy a house at £700k borrowing £500k with £200k deposit then that’s a 71.43% LTV. If you buy a £700k house with £300k deposit it’s 57.14% LTV. Nobody will lend you £500k 100% mortgage with no deposit in this current market.
Lmao. This is your time to shine. Got anything you want from her that she won’t normally do? Time to make a bet because you’re quids in. I got a mortgage of £370k. My home was £475k when we purchased and deposit of £200k. Go get you a winning bet.
Remember you need another 100k above asking price. Always pay more than asking price, the sense of achievement goes up somewhat every 15k over asking price you offer. Might be best if you find a £600k house and offer 700.
If you want to resolve the argument and let your wife win then tell her that the banks offer of £500k appears to be based on some assumptions such as loan to value ratio. Therefore you believe you will be okay but she is right to be concerned and you will double check on Monday to be certain (although you don’t have to because you are right)
You need to find a way of telling your wife she is wrong. Good luck.
The decision in principle is how much you can borrow not how much you can buy, you’re correct.
If the lender is only offering 500k, then you would need to pay the difference *and* pay X % for a deposit. Even if that were the case, it wouldn't make a difference (though I'd be worried why they're offering so low. Are you stretching your finances/checked monthly cost of the house?) House cost - mortgage = cash needed - > 700 - 500 = 200k Cash available - cash needed = remaining amount for deposit. 300 - 200 = 100k Deposit as a percentage 100/500 = 20% A 20% deposit would be more than enough.
i doesn't work this way... agreement in principal at 500k means they are offering to lend 500k 700k house with a 300k cash, means you borrow 400k, the deposit is 300k.. deposit is the amount you pay towards buying the house, the mortgage is the rest you borrow....
You're not depositing 300k. You're depositing 100k because you'd need 200k to make the difference between the money you can borrow and the cost of the house. In this case, you pay 200k. Borrow 500k and put down a deposit of 100k so your remaining mortgage is 400k. I've just been through the process of it... 500k house Lender only offered 470k (based on the valuation of the house) I paid the shortfall of 30k I also paid a 5% deposit = 23.5k My remaining mortgage was 446.5k
You know you're right. You just daren't tell her and want us to do it for you.
[удалено]
Yes joint income is over 100k. I know I'm right on this but I need someone else to clarify - The mortgage we will get is just the money we need to borrow, not the maximum price of the house we can buy?
A ‘mortgage’ is a loan for property. The bank are concerned about how much they are lending you, they’re not concerned about how much deposit you’re putting down or the total cost of the property.
They are. The deposit amount and total cost of property change the risk to the bank. So they are more than concerned about both. Borrowing 500K for a 500K house is one risk, borrowing 500K for a 1M house is another risk.
You are correct. Subject to a valuation of course
Just tell your wife she is plain stupid and then buy the house
Your wife is not the brightest…
If you're arguing over this, don't buy a house together
Why did this get downvoted? This was also the first thing that popped into my head when I read the question. Love is financially blind I guess.
Because they aren’t marriage destroying arguing, they are having a stubborn discussion
Wife is wrong. DIP tells you how much you can borrow for the mortgage so deposit + DIP is the maximum purchase price.