How much deposit do you need to buy a house in the UK?
The minimum deposit is 5% of the price - but the amount you put down changes the mortgage rates you’re offered and the total cost of your home. Here’s how to decide, and where the money can come from.
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You can buy a home in the UK with a deposit of 5% of the purchase price - that’s £12,500 on a £250,000 house. But 5% is the floor, not the norm: most first-time buyers put down 10–15%, and the size of your deposit directly controls the interest rate you’ll be offered. The deposit is only part of the affordability picture - lenders also apply an income multiple to your earnings when deciding how much you can borrow.
Deposit sizes at a glance
| Deposit | On a £250,000 home | Mortgage type |
|---|---|---|
| 5% | £12,500 | 95% loan-to-value (LTV) |
| 10% | £25,000 | 90% LTV |
| 15% | £37,500 | 85% LTV |
| 20% | £50,000 | 80% LTV |
Why a bigger deposit saves you money
The deposit sets your loan-to-value (LTV) - the amount you borrow as a percentage of the price. Lenders price risk in bands, and every band you move down usually cuts your rate:
- A 95% LTV mortgage carries the highest rates - you’re borrowing almost everything
- Dropping to 90% typically improves your rate noticeably
- At 80% or below, rates fall again and more lenders become available
- Below 60% LTV, the best rates on the market open up
The effect compounds over a 25-year term. A 0.5 percentage point rate difference on a £200,000 mortgage is roughly £60–£70 a month - around £18,000–£20,000 over the full term. Saving for a slightly bigger deposit is often the highest-return “investment” you can make before buying.
Savings
The most straightforward source. Lenders like to see a consistent saving history - usually 3–6 months of statements.
Lifetime ISA (LISA)
Save up to £4,000 a year and the government adds 25% - up to £1,000 free money every year. The bonus is paid when you buy your first home (worth up to £450,000) or at age 60. You must be 18–39 to open one, and you pay a 25% withdrawal charge if you use the money for anything else.
Gifted deposits
Most lenders accept a deposit gifted by parents or family - no interest and no repayment required. They’ll usually ask the gifter to sign a declaration confirming it’s a gift, not a loan. A few lenders (and solicitors, for anti-money-laundering checks) may want proof of where the money came from.
Help to Buy ISA
Closed to new accounts on 30 November 2019, but existing savers can still claim the 25% bonus (up to £3,000) on a first home worth up to £250,000 (£450,000 in London). Claims must be made by December 2030.
Costs beyond the deposit
| Cost | Typical range |
|---|---|
| Stamp Duty (first-time buyers) | £0 on most purchases |
| Survey | £300 – £1,500 |
| Conveyancing + searches | £1,200 – £2,500 |
| Mortgage arrangement fee | £0 – £1,500 |
| Valuation fee | £0 – £300 (often free) |
| Removals & moving | £300 – £1,500 |
How much should you actually save?
A realistic target for most buyers: 10% of the price plus £5,000 for fees and moving. If 10% feels far away, a 5% deposit with a good savings record is still achievable - just be prepared for a higher rate, and check the monthly cost before you commit.
Source: GOV.UK - Help to Buy ISA — Bonus rules
Source: GOV.UK - Lifetime ISA — Bonus and withdrawal rules
The buying process, step by stepWhat happens from offer to keys - and how long each stage takes.Stamp Duty calculatorWork out the tax side of your purchase in seconds.
Sources
- GOV.UK - Help to Buy ISA - Bonus rules
- GOV.UK - Lifetime ISA - Bonus and withdrawal rules
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