How Much Deposit Do First-Time Buyers Really Need in 2025? [UK Guide]
Wondering how much deposit you need to buy your first home in 2025? This UK-first-time buyer guide breaks down deposit requirements, options with 5% down, lender expectations, and government schemes.
Introduction: The Truth About Deposits in 2025 for First-Time Buyers
Buying your first home is one of life’s most exciting (and financially demanding) milestones. One of the first big questions every first-time buyer in the UK faces is:
“How much deposit do I actually need to buy a house?”
With rising house prices inflation and stricter lending rules the deposit required in 2025 can feel like a moving target. Some say you need 5% others 10% and some advisors still recommend 15%–20%.
In this expert guide we’ll break down exactly how much deposit is needed in today’s market what it means in pounds and pence how lenders assess your application and how government schemes can help first-time buyers secure a home with as little as 5% down.
What Is a Mortgage Deposit?
A mortgage deposit is the upfront cash you pay towards the purchase of a property. The remaining cost is typically covered by your mortgage provider.
For example if you’re buying a £250 000 home:
A 5% deposit = £12 500
A 10% deposit = £25 000
A 15% deposit = £37 500
The higher your deposit the less you’ll need to borrow—and the better your mortgage rates will be.
How Much Deposit Do First-Time Buyers Need in 2025?
In 2025 most UK lenders require a minimum deposit of 5% —but this is just the starting point.
Here’s a breakdown of deposit tiers and what they mean:
Deposit Size | Loan-to-Value (LTV) | Typical Access & Rates |
|---|---|---|
5% deposit | 95% LTV | Available via select lenders & schemes |
10% deposit | 90% LTV | Wider lender choice & improved rates |
15%–20% deposit | 80%–85% LTV | Much lower interest rates and fees |
25%+ deposit | 75% LTV or less | Best deals and approval chances |
WiseNest Tip:
While 5% is technically possible many lenders favour buyers with at least 10%–15% deposit due to affordability and risk concerns.
Average First-Time Buyer Deposit in the UK (2025)
According to recent market data:
UK average first-time buyer deposit: ~£34 500
London average: Over £70 000
Northern regions (e.g. North East): ~£18 000–£22 000
These figures depend heavily on property prices in your area. A 10% deposit in Manchester is very different from a 10% deposit in London.
What Determines the Deposit You’ll Need?
1. Property Value
Higher property prices = higher deposit required.
2. Mortgage Type
Standard repayment shared ownership or guarantor mortgages may have different requirements.
3. Credit History
With poor credit lenders may ask for a higher deposit to offset risk.
4. Income and Affordability
Even with a small deposit you must prove that monthly repayments are affordable based on your income and debts.
5. Government Schemes
Using a Help to Buy or First Homes scheme can reduce your upfront deposit.
5% Deposit Mortgages in 2025: Are They Still a Thing?
Yes—but they’re more limited and competitive .
Most 95% LTV mortgages in 2025 are available under one of the following:
Mortgage Guarantee Scheme (extended) – Supports buyers with 5% deposits.
Private 95% LTV mortgage offers – Available to applicants with strong credit and stable income .
Shared ownership or First Homes scheme – Allows deposits based on discounted property prices.
Important: Not all lenders offer 5% deposit mortgages and interest rates are usually higher.
How to Save for a Deposit Faster
Open a Lifetime ISA (LISA)
Save up to £4 000/year
Government adds 25% bonus (£1 000 max/year)
Must be used for first home or retirement
Automate Savings Monthly
Set up a standing order on payday into a high-interest savings account.
Cut Temporary Costs
Reduce rent by living with family or flat-sharing while saving.
Track Progress
Use apps or budgeting tools to stay motivated and reach milestones.
Can I Use a Gifted Deposit?
Yes. Many first-time buyers in 2025 receive help from parents or family in the form of a gifted deposit .
Lenders usually require:
A signed letter stating the money is a gift (not a loan)
Proof of funds and source (for anti-money laundering)
Government Schemes to Help with Deposits (2025)
Scheme | How It Helps | Eligibility |
|---|---|---|
First Homes | Properties sold at 30%–50% discount | First-time buyers & key workers |
Mortgage Guarantee Scheme | Enables 95% mortgages | First-time & existing buyers |
Lifetime ISA | 25% government bonus on savings | Age 18–39 max home price £450k |
Shared Ownership | Buy a share (25%–75%) and rent the rest | Income under £80k (£90k in London) |
Is a Bigger Deposit Always Better?
Generally yes . Here’s why:
Bigger Deposit Means… | Benefit |
|---|---|
Lower mortgage amount | Smaller monthly payments |
Better interest rates | Save thousands long-term |
More lender options | Easier approval |
Increased equity upfront | Better security |
However don’t wait forever to save a huge deposit—property prices and rent could rise faster than your savings.
Real-Life Example: Two Buyers, Two Deposits
Buyer A | Buyer B |
|---|---|
£250 000 home | £250 000 home |
5% deposit (£12.5k) | 15% deposit (£37.5k) |
Higher rate (~6.2%) | Lower rate (~4.8%) |
Monthly: ~£1 506 | Monthly: ~£1 287 |
Buyer B saves £219/month just by putting down a larger deposit.
Final Advice: How to Decide Your Ideal Deposit
Use a mortgage calculator to see how different deposits affect your monthly payments.
Talk to a mortgage broker to understand what lenders will offer you based on your circumstances.
Factor in ALL costs —deposit is only part of the upfront cost. You’ll also need to budget for solicitor fees moving costs surveys and insurance.
Editorial Standards & Expertise
WiseNest Editorial Team
Our expert editorial team consists of seasoned technology professionals, business strategists, and digital transformation specialists with over 15 years of combined experience in helping businesses navigate the digital landscape.
This content is optimized to answer these questions comprehensively.
What is the minimum deposit required to buy a house in the UK in 2025?
The minimum is 5%, but many lenders prefer 10% or more, especially in competitive markets.
Is a 5% deposit realistic for first-time buyers?
Yes, but availability is limited. You’ll need strong credit, good income, and may pay higher interest rates.
How much is a typical deposit for a first home in the UK?
On average, around £34,500, though this varies widely by region.
Can I use a Lifetime ISA for my deposit?
Yes—LISAs are ideal for first-time buyers, with a 25% government bonus on your savings.
Can my parents give me the deposit?
Yes, gifted deposits are allowed, but lenders will require proof it’s not a loan.
Should I wait to save more or buy with a smaller deposit?
It depends. A bigger deposit saves money in the long term, but delaying might mean paying more later if property prices rise.
What is LTV and why does it matter?
LTV = Loan to Value. A lower LTV (e.g., 80%) means better mortgage deals. Higher LTVs (e.g., 95%) are riskier for lenders and usually come with higher rates.
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