How Much Deposit Do I Need to Buy a Home?

Introduction: The Deposit can be an Obstacle.

The deposit is usually the biggest single obstacle between renting and owning. It’s the lump sum you put down upfront, with a mortgage covering the rest — and how much you need depends on the lender, the property, and how good a deal you want. Here’s what the numbers actually look like.

The Minimum Deposit You Need

5% Is the Standard Minimum

For most residential mortgages, the minimum deposit is 5% of the property’s value. This has become more widely available thanks to the government-backed Mortgage Guarantee Scheme, which encourages lenders to keep offering low-deposit mortgages to buyers who can’t yet save a larger sum. Some specialist lenders will go even lower in specific circumstances, such as with a family guarantee behind the loan, but 5% remains the standard floor for most buyers.

Worked Example: A £250,000 Home

Say you’re buying a home priced at £250,000. A 5% deposit means finding £12,500 upfront, with a mortgage covering the remaining £237,500. On the UK average house price of around £290,000, a 5% deposit works out to roughly £14,500. Scale that up to a £350,000 home in a pricier area, and the same 5% becomes £17,500 — a reminder that the deposit you need is always relative to the price of the home you’re aiming for, not a fixed national figure.

Why Does a Bigger Deposit Pay Off?

Better Rates, Lower Payments

Putting down more than the minimum almost always works in your favour. The bigger your deposit, the less risk a lender is taking on, and the better the interest rate they’re typically willing to offer. That translates directly into lower monthly repayments and considerably less interest paid over the life of the mortgage. A larger deposit can also widen the pool of lenders willing to consider your application, since some of the more competitive deals are reserved for buyers putting down 10% or more.

Worked Example: £12,500 vs £50,000

Take that same £250,000 home. A 5% deposit of £12,500 leaves a mortgage of £237,500. Stretch to a 20% deposit of £50,000, and the mortgage falls to £200,000 — a saving of £37,500 in borrowing before you even factor in the better interest rate a larger deposit tends to unlock. Over a 25-year term, that combination of a smaller loan and a lower rate can easily save a buyer tens of thousands of pounds in interest. Even a smaller jump makes a difference: moving from a 5% deposit to a 10% deposit on the same £250,000 home takes your upfront contribution from £12,500 to £25,000, but it’s often enough on its own to move you into a noticeably cheaper rate band.

A Buffer Against Falling Prices

A bigger deposit also gives you a cushion. If house prices dip after you buy, a larger deposit means you’re less likely to end up owing more than your home is worth — a situation known as negative equity, which can make it difficult to remortgage or sell until prices recover. Buyers stretching to the 5% minimum have far less room for that kind of shock.

What Buyers Typically Save

First-Time Buyer Averages

While 5% remains the legal minimum, most first-time buyers put down considerably more. National figures for 2025–2026 suggest typical first-time buyer deposits of £50,000 to £70,000, often equating to 15–25% of the purchase price. Many buyers get there gradually, combining personal savings with help from family or a workplace bonus, rather than reaching the full amount from one source.

Regional Differences

Where you’re buying makes a real difference to the size of deposit you’ll need. In London, a 10% deposit on a typical first-time buyer property can exceed £44,000 — roughly double the equivalent figure across much of the rest of the country. Buyers targeting more affordable regions can often reach a workable deposit considerably faster, sometimes in half the time it would take to save the same percentage in the capital.

Ways to Build Your Deposit Faster

The Lifetime ISA

The Lifetime ISA is one of the most valuable tools available to first-time buyers. Save up to £4,000 a year, and the government adds a 25% bonus on top — worth up to £1,000 annually. Save £4,000 a year for five years, for example, and you’d have £20,000 in contributions plus £5,000 in bonuses: a £25,000 deposit built from £20,000 of your own savings. It’s open to anyone aged 18 to 39, for a property costing £450,000 or less. Withdraw the money for anything other than a first home or retirement, though, and you’ll lose 25% of the withdrawal as a penalty, so it’s worth being confident about your plans before locking money away.

Gifted Deposits

Many buyers also rely on a gifted deposit — money from a parent or close family member, put toward the purchase with no expectation of repayment. Lenders will typically ask for a signed letter confirming this, along with evidence of where the money came from, as part of their anti-money-laundering checks. Combining a gifted lump sum with your own savings is one of the most common ways buyers bridge the gap between a 5% deposit and a more comfortable 10% or 15%.

Consistent, Documented Saving

Whatever the source, lenders want to see a clear paper trail. Regular monthly transfers into a dedicated savings account, built up over three to six months or longer, tend to be viewed more favourably than large, unexplained lump sums appearing shortly before an application. Setting up a standing order the moment you decide to buy is a simple habit that pays off later in the process.

What Comes After the Deposit?

Saving the deposit is the first milestone, but it isn’t the only cost of buying a home — Stamp Duty, legal fees, and surveys all need budgeting for too, and we cover exactly what to set aside in our guide to the true cost of buying a house. Once your deposit is in place, the next big decision is which type of mortgage actually suits your circumstances, which is where we turn next.