How Much Deposit Do I Need to Buy a Home?

So, how much deposit for a house do you need? In the UK, you’ll usually need at least 5% of the property’s price to get a mortgage, so around £12,500 on a £250,000 home. A bigger deposit can open up more mortgage deals and lower rates, but it isn’t the only thing lenders look at.

This guide explains how much deposit you may need, how deposit size links to loan-to-value (LTV), what a bigger deposit can and can’t do, the help available to first-time buyers, and the other costs to budget for on top.

What is a mortgage deposit?

Your deposit is the part of the price you pay yourself. The mortgage covers the rest. If you buy a £250,000 home with a £25,000 deposit, you’d borrow £225,000.

The deposit matters to lenders because it’s your stake in the home. If house prices fall, a bigger deposit gives you, and the lender, more of a cushion before the home is worth less than the mortgage.

The minimum mortgage deposit in the UK

For most residential mortgages, the minimum deposit is 5% of the property’s value. MoneyHelper gives the example of a £280,000 home, where you’d usually need at least £14,000 as a deposit.

A 5% deposit means a 95% mortgage. Fewer lenders offer deals at this level, and the rates are usually higher than for bigger deposits.

Having the minimum deposit doesn’t guarantee a mortgage. Lenders also look at your income, your regular outgoings and your credit history to decide how much they’re willing to lend.

Working out how much deposit for a house you need

A simple way to work out how much deposit for a house you’ll need is to start from the price range you’re looking at and work through it step by step.

1. Pick a realistic price Look at what similar homes in the area you like have actually sold for, not just the asking prices.
2. Work out the minimum Multiply the price by 5%. On a £250,000 home, that’s £12,500.
3. Check the next bands down Work out 10% and 15% too (£25,000 and £37,500 on the same home), so you can see how far away the lower LTV bands are.
4. Add your buying costs Legal fees, surveys, mortgage fees, moving and any Stamp Duty all come on top of the deposit (see the costs section below).
5. Add a cushion Think about how much you’d like left over for emergencies and setting up your new home.

The total is the amount you’re really saving towards. It’s usually more than the deposit alone, and knowing the full figure early can help you set a realistic target and timescale.

It’s also worth remembering that the deposit is only one half of the picture. The other half is how much a lender will let you borrow, which depends on your income and outgoings. Our guide to how much you can borrow for a mortgage explains how lenders work this out. If the mortgage you could get is smaller than the price minus your deposit, you’d need a bigger deposit or a cheaper home to make up the gap.

How your deposit sets your loan-to-value (LTV)

Loan-to-value is the size of your mortgage compared with the value of the home, shown as a percentage. It’s the other side of your deposit: a 10% deposit means a 90% LTV.

Many lenders set their rates in LTV bands, such as 60%, 75%, 80%, 85%, 90% and 95%. Moving down into a lower band can give you access to more deals. Bands and criteria vary from lender to lender.

Here’s an illustrative example for a £250,000 home:

%Loan-to-value calculatorTry your own figures and see how much more deposit would reach the next bandTry it →

Does a bigger deposit get you a better rate?

Often, yes. In general, the lower your LTV, the more deals may be open to you and the lower the rates tend to be. MoneyHelper notes that the cheapest deals are typically available with a deposit of at least 40% of the property’s value.

A bigger deposit also means a smaller mortgage, so your monthly payments and the total interest you pay over the term will be lower. Our mortgage repayment calculator can show how the loan size changes your payment.

But a bigger deposit isn’t automatically the right choice for everyone. Putting every penny into your deposit can leave you short for buying costs, furniture or an emergency. Depending on your circumstances, it may be worth considering how much of a savings cushion you’d like to keep after you move in.

Your rate also depends on the type of mortgage you choose. Our guide to fixed, variable and tracker mortgages explains the main options.

Can I buy a home with a 5% deposit?

Yes, many lenders offer 95% mortgages for buyers with a 5% deposit, including first-time buyers. You’ll still need to meet the lender’s affordability and credit checks, and some lenders have stricter criteria at 95% LTV, such as limits on the type of property.

Should you wait and save a bigger deposit?

This is one of the most common questions buyers ask, and there’s no single right answer. It depends on your circumstances and what matters most to you.

Some buyers find it helps to compare a few scenarios side by side. For example, you could look at the monthly payment on a 95% mortgage now against a 90% mortgage in a year’s time, using your own figures. An FCA-authorised mortgage adviser can look at your full situation if you’d like a personal recommendation.

Ways to build your deposit

Most deposits come from a mix of regular saving and help from schemes or family. Some ways people build theirs include:

• Setting up a regular standing order into a separate savings account on payday, so the money is put aside before you spend it.
• Using a Lifetime ISA if you’re eligible, to get the government bonus on top of your savings (see below).
• Looking at lower-cost routes such as shared ownership, where the deposit is based on a share of the home.
• Help from family, either as a gifted deposit or through other arrangements. Any money from family should be agreed clearly, as lenders treat a gift and a loan very differently.

Keeping your deposit savings in an account in your own name, with clear statements, can also make life easier when the lender asks for proof of where your deposit has come from.

Help for first-time buyers

There are a few ways first-time buyers may be able to build or stretch a deposit. Our first-time buyer mortgage guide covers the whole buying process.

Lifetime ISA

A Lifetime ISA (LISA) is a savings account for people aged 18 to 39. You can pay in up to £4,000 a year, and the government adds a 25% bonus, worth up to £1,000 a year. You can use it towards your first home if the property costs £450,000 or less and you buy at least 12 months after opening the account and making your first payment. Taking money out for other reasons usually means a 25% government withdrawal charge. From 29 October 2026, that charge falls to 20% if you use the money to buy a home costing more than £450,000.

Shared ownership

In England, shared ownership lets you buy a share of a home, usually between 10% and 75%, and pay rent on the rest. Your deposit is based on the share you buy rather than the full price, and typically ranges from 5% to 25% of your share. Household income limits apply: £80,000 or less outside London and £90,000 or less in London. Details are on the government’s Own Your Home shared ownership page.

Shared ownership comes with rent and usually service charges on top of the mortgage, so it’s worth looking at the full monthly cost.

Gifted deposits

Many first-time buyers get help from family. Lenders will usually accept a gifted deposit, but they’ll want proof of where the money came from. MoneyHelper notes that you may need “a completed form from someone who has gifted money” as part of your proof of deposit.

Buy-to-let mortgages need a bigger deposit

If you’re buying a home to rent out, the rules are different. MoneyHelper says buy-to-let lenders could ask for an LTV of no more than 75%, which means a deposit of at least 25% of the property’s cost. Lenders will also look at the rent the property could earn, not just your income.

Other costs to budget for on top of your deposit

Your deposit isn’t the only money you’ll need. MoneyHelper’s guide to buying and moving costs lists the main ones, including:

• Legal fees: typically £850 to £1,500 including VAT.
• Local searches: around £250 to £300.
• Surveys: from around £380 for a Level 1 survey to £600 or more for a Level 3 building survey.
• Mortgage fees: such as a booking fee of £99 to £250 and an arrangement fee of up to £2,000.
• Removals: from around £150 to £2,000 or more.
• Stamp Duty or its equivalent, depending on where you buy and the price (see below).

Our guide to the true cost of buying a house goes through each cost in more detail, with a worked example on a £250,000 home.

Stamp Duty in England and Northern Ireland

In England and Northern Ireland, you pay Stamp Duty Land Tax on the portion of the price above certain thresholds. Standard rates start at 0% up to £125,000, then 2% on the portion up to £250,000 and 5% on the portion up to £925,000.

First-time buyers pay no Stamp Duty on homes up to £300,000, and 5% on the portion from £300,001 to £500,000. If the price is over £500,000, first-time buyer relief can’t be claimed.

Scotland and Wales

Scotland and Wales have their own property taxes. In Scotland, Land and Buildings Transaction Tax applies, and first-time buyer relief raises the starting nil rate band to £175,000. In Wales, Land Transaction Tax applies, run by the Welsh Revenue Authority, with its own rates and bands.

Summary

Most UK mortgages need a deposit of at least 5%, and a bigger deposit lowers your loan-to-value, which can mean more choice and lower rates. How much is right for you depends on your circumstances, including how much you’d like to keep aside for buying costs and emergencies.

Sources

• MoneyHelper – How much deposit do I need for a mortgage?
• MoneyHelper – Buy-to-let mortgages explained
• MoneyHelper – Mortgage fees and costs when buying or selling a home
• MoneyHelper – Homebuyer surveys and costs
• Own Your Home (GOV.UK) – Lifetime ISA
• Own Your Home (GOV.UK) – Shared Ownership
• GOV.UK – Budget 2026: Overview of tax legislation and rates
• GOV.UK – Stamp Duty Land Tax: Residential property rates
• Revenue Scotland – Residential property (LBTT)

Last updated: 29 October 2026. This guide is general educational information only and is not regulated financial advice.