Deciding how much deposit to put down is one of the biggest financial decisions a UK homebuyer will make. Put down too little and you may face higher interest rates and fewer lender options. Put down too much and you might leave yourself with insufficient savings for moving costs, furnishing, or an emergency fund. Here's how to think about it properly.
The minimum deposit in the UK
Most mainstream mortgage lenders require a minimum deposit of 5% of the property's value, meaning you borrow the remaining 95% (a 95% loan-to-value, or LTV, mortgage). A small number of specialist and guarantor products go even higher, occasionally allowing 100% LTV with additional security from a family member, though these are relatively rare and come with strict conditions.
Why the size of your deposit changes everything
Lenders group mortgage products into loan-to-value "tiers" — commonly 60%, 75%, 80%, 85%, 90% and 95% LTV. As a general rule, the lower your LTV (meaning the bigger your deposit), the lower the interest rate you're likely to be offered, because the lender is taking on less risk relative to the property's value.
How much should you actually aim for?
There's no single "correct" deposit size — it depends on your goals, timeline and what you can realistically save. That said, a few common deposit levels tend to unlock noticeably better terms:
- 5% deposit: The minimum entry point for most first-time buyers, but usually the highest rates and narrowest product choice.
- 10% deposit: A meaningful step up in product choice and typically a rate improvement over 95% LTV deals.
- 15–20% deposit: Access to the mainstream "sweet spot" of competitive rates from most major lenders.
- 25%+ deposit: Usually unlocks the very best rates on the market, reserved for the lowest-risk borrowers.
Beyond the deposit: other costs to budget for
A common first-time buyer mistake is putting every available penny into the deposit and forgetting the other costs of buying a home. Depending on the property and location, you should also budget for:
- Stamp Duty Land Tax (though first-time buyers get relief up to a threshold — see our Stamp Duty calculator)
- Mortgage arrangement or product fees, often £0–£1,999
- Valuation fees
- Solicitor / conveyancing fees, typically £850–£1,800
- Survey costs, if you choose a more detailed survey than the lender's own valuation
- Removal costs and immediate furnishing
A reasonable rule of thumb used by many buyers is to budget an additional 1.5–3% of the purchase price on top of the deposit for these combined costs.
Government schemes that can reduce the deposit needed
Various UK government-backed and lender schemes exist to help buyers with smaller deposits, including Shared Ownership and mortgage guarantee schemes offered periodically by lenders. These can be worth exploring if saving a large deposit isn't realistic in your timeframe — see our dedicated guide for details.
Where should your deposit come from?
Lenders will want to understand the source of your deposit funds as part of anti-money-laundering checks. Acceptable sources typically include personal savings, an ISA (including a Lifetime ISA, which adds a 25% government bonus on contributions up to certain limits), and gifted deposits from family, which usually require a signed gifted deposit letter confirming the money doesn't need to be repaid.
Saving strategies that actually work
- Automate transfers into a dedicated savings or Lifetime ISA account the day you're paid, before you can spend it elsewhere.
- Track your LTV goal, not just a cash figure — if property prices in your target area are rising, a moving target of "20% of value" may need regular revisiting.
- Use a Lifetime ISA if eligible (available to first-time buyers aged 18–39), which can add meaningful free government money towards your deposit.
- Check for employer or family contribution schemes, such as family-assisted mortgages where a relative's savings or property equity supports your application without necessarily forming part of your own cash deposit.
The bottom line
While 5% is technically the minimum UK deposit, aiming higher — even by an extra 5 or 10 percentage points — can materially reduce your monthly repayments over the life of the mortgage. Use our LTV calculator to see exactly which rate tier your target deposit puts you in, and weigh that against how much longer it would realistically take to save more.