In the UK less than 50% of mortgages are fixed for terms of longer than 5 years. ...and less than 1% of recent mortgage completions are with 5% deposits (the m

In the UK less than 50% of mortgages are fixed for terms of longer than 5 years. ...and less than 1% of recent mortgage completions are with 5% deposits (the minimum here)[0] There is one big reason deposit size matters: affordability and risk. PMI doesn't exist in the UK, it's built in to the rate. When you're stretching what you're borrowing to the maximum (thanks to these high price/income multiples) every 1% on a mortgage can be the difference between relative comfort, and being 'House Poor' and living with constant anxiety about rates rising before you can refinance. At the moment with 10% down: - 25 year fix: 4.64% - 5 year fix: 2.50% - 2 year fix: 2.10% With 20% down: - 25 year fix: 3.80% - 5 year fix: 1.70% - 2 year fix: 1.40% The other thing, that some other commenters have mentioned is that most lenders won't lend at high LTVs on high value properties, or on certain property types, like flats (minimum deposits of 20% on flats are common, which is particularly problematic given that they tend to be the most affordable properties). [0] https://www.financialreporter.co.uk/mortgages/95-ltv-mortgages-accounting-for-just-1-of-completions-trussle.html https://www.financialreporter.co.uk/mortgages/95-ltv-mortgag...