In this guide
How Much Deposit Do You Need?
You need a minimum of 5% of the property price. On a home worth £270,000 (the current UK average), that's £13,500.
But here's the thing most people don't realise: the size of your deposit directly affects the interest rate you're offered. A bigger deposit doesn't just reduce what you borrow — it unlocks cheaper deals.
| Deposit | LTV | On a £270k Home |
|---|---|---|
| 5% | 95% | £13,500 |
| 10% | 90% | £27,000 |
| 15% | 85% | £40,500 |
| 20% | 80% | £54,000 |
LTV stands for Loan-to-Value. It's the percentage of the property price you're borrowing. A 10% deposit means a 90% LTV mortgage. The lower your LTV, the better your rate.
Work Out Your Deposit
Adjust the property price and deposit percentage to see exactly what you'd need to save.
How Much Do You Need to Save?
Based on purchase price. Additional costs like stamp duty and legal fees are separate.
How Your Deposit Affects Your Rate
Lenders price their mortgages based on risk. A larger deposit means you're borrowing less relative to the property value, which makes you a safer bet. The result? Lower interest rates and more lenders to choose from.
The difference can be significant. Jumping from a 5% deposit to a 10% deposit could save you thousands over a typical mortgage term.
| Deposit | Typical 5yr Fixed Rate | Monthly Cost (£250k mortgage, 25yrs) |
|---|---|---|
| 5% (95% LTV) | ~4.80% | £1,430 |
| 10% (90% LTV) | ~4.35% | £1,372 |
| 20% (80% LTV) | ~4.15% | £1,346 |
| 25%+ (75% LTV) | ~4.15% | £1,346 |
Rates shown are indicative based on March 2026 market data and will vary by lender and circumstance.
You don't need 20% to get a good deal. Moving from 5% to 10% makes the biggest difference in rates and lender choice. If you can stretch to 15%, even better — but don't delay buying for years just to save a few extra percent.
Government Help With Your Deposit
There are several schemes designed to help you get on the ladder faster:
Lifetime ISA (LISA)
Save up to £4,000 per year and the government adds a 25% bonus — that's up to £1,000 of free money every year. You need to be aged 18–39 to open one, and the property must cost £450,000 or less.
Mortgage Guarantee Scheme
The government's permanent scheme encourages lenders to offer 95% LTV mortgages on properties up to £600,000. This means more 5% deposit options are available than ever before.
Not sure which scheme you qualify for? We'll check for you.
Can Someone Gift You a Deposit?
Yes. Most lenders accept gifted deposits from immediate family — parents, grandparents, and siblings. It's one of the most common ways first-time buyers get on the ladder.
There are a few things the lender will need:
- A signed letter confirming it's a gift, not a loan, and that the donor has no claim on the property
- Proof of identity from the donor (photo ID and proof of address)
- Bank statements showing where the money came from (anti-money laundering checks)
You must always declare a gifted deposit to your lender. Failing to do so is considered mortgage fraud. We'll help you with the paperwork — it's straightforward.
Not Sure Where You Stand?
Everyone's situation is different. Your income, credit history, the property type, and the lender all affect what's possible. That's why a quick conversation with a mortgage advisor is worth more than hours of Googling.
We'll tell you exactly how much deposit you need for your situation, which schemes could help, and what rates you'd likely be offered — all in a free, no-pressure chat.
