How Much Deposit Do First-Time Buyers Really Need in 2025? [UK Guide]

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:

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)

---

Is a Bigger Deposit Always Better?

Generally yes . Here’s why:

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 B saves £219/month just by putting down a larger deposit.

---

Final Advice: How to Decide Your Ideal Deposit

1. Use a mortgage calculator to see how different deposits affect your monthly payments.

2. Talk to a mortgage broker to understand what lenders will offer you based on your circumstances.

3. 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.