💼 Moving Home? Why Calculating Your Deposit Properly Is Critical to a Smooth Purchase

At Mortgage321, we regularly help clients navigate the financial complexities of moving home. One of the most common mistakes we see? Sellers overestimating how much they’ll have available for their next property deposit.

It’s easy to assume that the equity in your current home will seamlessly fund your next move. But without accurate calculations, this can quickly unravel—causing delays, stress, or worse, a failed transaction.

Here’s how to avoid that scenario and make sure your onward purchase is built on solid financial ground.

🧮 Step-by-Step: How to Calculate Your Deposit for the Next Property

To work out your true deposit amount, you need to account for all associated costs. Follow these steps:

1. Estimate Your Sale Proceeds
Start with your estimated sale price. Then deduct:

• Any remaining mortgage balance on your current home
  
• Estate agent fees (typically 1%–1.5% + VAT of the sale price)
  
• Solicitor fees for the sale (usually £750–£1,200)
  
• Redemption fees from your lender (can be £100–£300 or more)
  
• Early repayment charges (if applicable – check your mortgage offer)
  

Example:

Sale price: £350,000
Remaining mortgage: £250,000
Estate agent fees (1.2%): £4,200
Solicitor fees: £1,000
Redemption & early repayment: £1,000

Net sale proceeds = £93,800

2. Calculate Costs for the New Purchase
Next, factor in all the buying costs:

• Deposit (typically 5%–25% depending on the lender and product)
  
• Stamp Duty Land Tax (SDLT) – based on property value
  
• Legal fees for purchase (£1,000–£1,500)
  
• Survey/valuation costs (£250–£1,000)
  
• Moving costs (removals, storage, temporary accommodation if chain breaks)
  
• Broker or advisor fees (e.g. Mortgage321’s fee of 0.5%, £200 payable on application)
   
  

  ⚠️ Common Pitfalls: Where Buyers Often Go Wrong

  🔸 Underestimating Selling Costs
  Sellers often forget estate agent VAT, early redemption fees, or the actual balance owed after daily interest.

🔸 Overestimating Sale Price
Relying on an optimistic agent valuation without considering market fluctuations or condition of property can backfire—especially if you accept an offer lower than asking price.

🔸 Ignoring Tax
Stamp Duty remains one of the largest costs when buying a new home. Even at modest purchase levels, it can significantly erode available deposit funds.

🔸 Chain Delays and Temporary Costs
If your onward chain stalls, costs like temporary accommodation or double removals may arise—these are rarely budgeted for but can add hundreds or even thousands.

📈 Where Costs Typically Escalate

Even with careful planning, some costs tend to increase unexpectedly:

• Legal costs if issues arise with titles, leases, or searches
  
• Survey upgrades when a basic valuation flags structural issues
  
• Stamp Duty recalculations if completion is delayed into a new tax year or if your status as a buyer changes (e.g. second home vs. main residence)
  
• Mortgage interest if the completion is delayed and your current deal ends before drawdown
  
• Removal and storage fees if your moving date changes last minute
   

  ✅ How Mortgage321 Helps You Stay in Control

At Mortgage321, we specialise in helping movers understand the full financial picture. Our process includes:

• Realistic affordability calculations
  
• Review of all likely sale and purchase costs
  
• Guidance on sale proceeds vs. onward deposit
  
• Access to lenders suited to your timeline, credit profile, and property type
  
• Strategic advice if your chain is complex
  

With over 30 years of specialist mortgage experience, we help you plan ahead and avoid surprises—ensuring you can move with confidence.

🏠 Final Thought

When it comes to moving home, assumptions are costly. Before making an offer on your next property, make sure your figures are watertight. A conversation with an experienced broker can highlight hidden costs, stress-test your affordability, and secure a product that fits your timeline.

Ready to calculate your true budget and move with confidence?
📞 Call Mortgage321 today on 01255 440142 or complete our online form for a tailored affordability assessment.