The deposit is the biggest hurdle for most buyers, and the size of it shapes everything else about the purchase: which lenders will consider you, the interest rate you pay, and what your monthly payments look like. This guide explains the minimum you realistically need, why each extra 5% matters, and the schemes and tactics that help UK buyers get there sooner.
Most UK lenders ask for at least 5% of the property price, so £12,500 on a £250,000 home. In practice 10% opens up meaningfully better mortgage rates, and each loan-to-value step down (90%, 85%, 80%, 75%) tends to improve the rate again. Aim for the largest deposit you can manage without emptying the fund you need for fees and moving costs.
The standard minimum for residential mortgages is 5%, meaning the mortgage covers 95% of the price. A small number of specialist products go lower, including some 100% mortgages aimed at long-term renters with strong payment histories, but criteria are strict and rates are higher.
A 5% deposit gets you on the ladder sooner, but it comes with the highest rates, the smallest choice of lenders and the least protection if house prices dip. Buyers with 5% deposits are also assessed more cautiously on affordability, so the amount you can borrow may be lower than you expect.
Lenders price mortgages in loan-to-value (LTV) bands. LTV is the mortgage as a percentage of the property's value, so a £225,000 loan on a £250,000 home is 90% LTV. Typical pricing bands sit at 95%, 90%, 85%, 80% and 75% LTV.
Dropping from 95% to 90% LTV often cuts the rate noticeably, and the improvements continue down to around 60% LTV where the best rates sit. On a £250,000 home, the difference between a 95% and a 90% mortgage rate can be worth tens of pounds a month and thousands over a five-year fix, which is why saving a little longer can pay for itself.
On a £200,000 home: 5% is £10,000, 10% is £20,000 and 15% is £30,000. On a £300,000 home: 5% is £15,000, 10% is £30,000 and 15% is £45,000. On a £400,000 home: 5% is £20,000, 10% is £40,000 and 15% is £60,000.
Remember that the deposit is not the only cash you need on completion day. Stamp Duty (where it applies), legal fees, surveys and moving costs typically add several thousand pounds on top. Our hidden costs guide breaks these down, and our mortgage calculator shows what each deposit level does to the monthly payment.
The Lifetime ISA is the standout for first-time buyers: save up to £4,000 a year and the government adds a 25% bonus, up to £1,000 a year. The home must cost £450,000 or less and the account must have been open at least 12 months. Withdrawing for anything other than a qualifying first home or retirement triggers a penalty.
First-time buyer Stamp Duty relief means no SDLT on the first £300,000 of a home costing up to £500,000 in England and Northern Ireland, freeing more of your cash for the deposit. Shared ownership lets you buy a share of a home, typically 10% to 75%, with a deposit based only on the share you buy. Some lenders also offer family-assisted mortgages where a relative's savings or property act as security.
Treat the deposit like a bill: a standing order into a separate account on payday beats saving whatever is left at the end of the month. Use the Lifetime ISA bonus if you qualify, and put the rest in the highest-rate easy-access or fixed account that matches your timescale, since deposit money for a purchase within a few years generally should not be invested in shares.
Cutting the biggest costs moves the needle fastest: renegotiating rent, moving in with family for a period, or pausing expensive commitments can shorten the savings timeline by years. Our savings calculator shows how a monthly amount grows towards a target at different rates.
Waiting to save a larger deposit gets you a better rate and lower payments, but you keep paying rent in the meantime, and prices may rise while you wait. Buying sooner with a smaller deposit starts building equity earlier, but at higher cost and with thinner protection against price falls.
There is no universal answer; it depends on local prices, your rent and how quickly you can save. Our bigger deposit vs buying now comparison and rent vs buy calculator are built to test exactly this trade-off with your own numbers.
A £12,500 deposit means a £237,500 mortgage at 95% LTV. With first-time buyer relief there is no Stamp Duty, but fees and moving costs still need around £2,000 to £3,000 on top of the deposit.
Saving £25,000 drops the LTV to 90%, which typically unlocks a cheaper rate and reduces the monthly payment. The extra £12,500 of saving often pays back through lower interest within the first fixed period.
Saving £4,000 a year into a Lifetime ISA for four years gives £16,000 of contributions plus £4,000 of government bonus, a £20,000 deposit pot before any interest.
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Read comparisonYes, 95% mortgages are widely available, though rates are higher than at lower loan-to-values and lending criteria are stricter. A 5% deposit on a £250,000 home is £12,500.
Usually, yes. At 90% LTV you get access to more lenders and better rates than at 95%, which lowers the monthly payment and the total interest. Each further 5% step down tends to help again.
LTV is the mortgage as a percentage of the property value. A £180,000 mortgage on a £200,000 home is 90% LTV. Lenders price their rates in LTV bands, so a bigger deposit means a lower LTV and usually a cheaper rate.
Yes. Budget for legal fees, searches, any survey, mortgage fees, removals and Stamp Duty where it applies. For many purchases that adds £2,000 to £5,000 or more on top of the deposit.
For most eligible first-time buyers, yes: the 25% government bonus is up to £1,000 a year of free money. Check the rules first, especially the £450,000 property price cap and the withdrawal penalty for non-qualifying use.
It depends on how fast you can save, your rent and what prices do while you wait. A bigger deposit means cheaper borrowing; buying sooner means building equity earlier. Our comparison pages and rent vs buy calculator help you test both paths.