If you’re buying a home, one of the first questions you’ll ask is: how much deposit do I actually need?
The short answer: most buyers need at least 5% of the property price, but the amount you put down can make a big difference to the rate you’re offered and your monthly payments.
Here’s what you need to know.
What is a mortgage deposit?
Your deposit is the part of the property price you pay upfront using your own money. The rest is covered by your mortgage.
For example:
- Buying price: £250,000
- 10% deposit: £25,000
- Mortgage: £225,000
The size of your deposit determines your Loan to Value (LTV). This is the percentage of the property price you’re borrowing.
- 95% LTV = 5% deposit
- 90% LTV = 10% deposit
- 85% LTV = 15% deposit
- 80% LTV = 20% deposit
The lower your LTV, the lower the risk to the lender. That usually means better interest rates.
Minimum deposit: 5%
Most lenders in the UK offer mortgages with a 5% deposit (95% LTV).
Example:
- Property price: £300,000
- 5% deposit: £15,000
- Mortgage needed: £285,000
This is common for first-time buyers. However:
- Rates are usually higher at 95% LTV
- Affordability checks are stricter
- Your credit profile needs to be clean
If you have any recent credit issues, some lenders may require a larger deposit.
Is 10% a better option?
A 10% mortgage deposit (90% LTV) is often considered a good balance.
Using the same £300,000 property:
- 10% deposit: £30,000
- Mortgage: £270,000
Benefits of a 10% deposit:
- Access to more lenders
- Better interest rates than 5%
- Lower monthly payments
- Lower risk of negative equity
For many buyers, saving an extra 5% can make a noticeable difference in long-term cost.
What if I have 15% or 20%?
Once you reach 15% or 20%, rates typically improve again.
At 80% LTV (20% deposit), you’ll often access some of the most competitive mortgage rates available.
Example on £300,000:
- 15% deposit: £45,000
- 20% deposit: £60,000
With a larger deposit:
- Your interest rate is lower
- Your monthly payment is lower
- You borrow less overall
- You may pass affordability checks more easily
If you’re close to one of these deposit “bands”, it’s worth checking how much difference it makes to your payments.
Does the type of mortgage affect the deposit required?
Yes.
First-time buyers
Usually from 5% deposit.
Home movers
Also often 5%+, but equity from your current property acts as your deposit.
Buy-to-let
Typically requires at least 20–25% deposit. Some lenders require more.
New-build properties
Flats in particular may require a larger deposit, often 10% or more.
Self-employed or adverse credit
You may need a bigger deposit depending on your circumstances.
Can I use a gifted deposit?
Yes. Many buyers use a gifted deposit from parents or family.
Lenders usually require:
- A signed gifted deposit letter
- Proof the funds are a gift, not a loan
- ID and source-of-funds checks
If the money must be repaid, it won’t be treated as a deposit.
What other costs should I budget for?
Your deposit isn’t the only upfront cost.
You’ll also need to consider:
- Solicitor fees
- Survey fees
- Mortgage arrangement fees (sometimes added to the loan)
- Stamp Duty (depending on price and eligibility)
- Moving costs
As a rough guide, many buyers should budget an additional 2–5% of the property price for associated costs.
Is a bigger deposit always better?
Financially, yes — because:
- You borrow less
- You pay less interest
- You get better rates
However, waiting years to save more could mean:
- Property prices rising
- Rent payments continuing
- Missing a good opportunity
It’s about balance. Sometimes buying with 5% now makes more sense than waiting for 10%.
What deposit do I need personally?
The right deposit depends on:
- Your income
- Your credit history
- The type of property
- The lender’s criteria
- Current mortgage rates
Two buyers with identical deposits can receive very different mortgage offers depending on their circumstances.
Next step
If you’re unsure whether 5%, 10% or 15% is realistic for you, a quick affordability review can give clarity.
We can:
- Check how much you could borrow
- Show you rate differences at different deposit levels
- Explain whether waiting to save more would meaningfully improve your options
There’s no obligation — just clear guidance so you can plan properly.