How Much Do You Really Need for a House Deposit in the UK?
One of the biggest questions for first-time buyers is: How much do I actually need to save for a deposit? The answer isn’t always straightforward, but understanding how deposits work is key to planning your home-buying journey.
One of the biggest questions for first-time buyers is: How much do I actually need to save for a deposit? The answer isn’t always straightforward but understanding how deposits work is key to planning your home-buying journey.
In this post we’ll break down the different deposit requirements show how your savings affect your mortgage options and help you estimate how much you really need.
What Is a House Deposit?
A house deposit is the upfront amount you pay towards the purchase of a property. The rest of the price is usually covered by a mortgage from a bank or lender.
Minimum Deposit Required
The minimum deposit for most mortgages is 5% of the property’s value.
For example if the house costs £250 000 you’ll need at least £12 500 as a deposit.
But a larger deposit often means better mortgage deals (lower interest rates smaller monthly payments).
How Deposit Size Affects Mortgage Rates
Deposit (Loan-to-Value) | Typical Mortgage Rate | Notes |
|---|---|---|
5% (95% LTV) | Higher rate | Easier to access as a first-time buyer |
10% (90% LTV) | Better rate | Lower monthly repayments |
15–20%+ | Even better rates | More choice of lenders and products |
40%+ | Best rates available | Often reserved for remortgaging or high equity |
LTV = Loan to Value or the portion of the property's value you're borrowing.
Should You Aim for More Than 5%?
While 5% is enough to get started there are strong reasons to aim for more:
Access to better interest rates
Smaller monthly repayments
Less risk of negative equity
More negotiating power when applying for a mortgage
Extra Costs to Consider
Your deposit isn’t the only thing you’ll need to save for. Don’t forget to budget for:
Stamp Duty (may be discounted or exempt for first-time buyers)
Legal fees and solicitor costs
Survey and valuation
Mortgage arrangement fees
Moving costs
Furniture and setup costs
Together these can easily add £3 000–£5 000+ to your total upfront cost.
Help for First-Time Buyers
If you’re struggling to save a big deposit there are schemes that can help:
Lifetime ISA (LISA): Save up to £4 000 per year and the government adds a 25% bonus.
Shared Ownership: Buy a share of a property (from 10%) and pay rent on the rest.
First Homes Scheme: Discounted new-build homes for local first-time buyers and key workers.
Realistic Saving Targets
Here’s a rough idea of what you’d need to save for different property prices:
Property Price | 5% Deposit | 10% Deposit |
|---|---|---|
£200 000 | £10 000 | £20 000 |
£250 000 | £12 500 | £25 000 |
£300 000 | £15 000 | £30 000 |
These figures don’t include the extra costs mentioned above.
Final Thoughts
There’s no one-size-fits-all answer — but knowing the numbers helps you set clear savings goals. Even if you’re not ready to buy this year starting now with the right plan (and possibly a LISA) can get you closer.
Create your free WiseNest account to build a personalised plan for your first home and track your savings progress step by step.
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