When buying a home, one of the first questions many people ask is: “How much deposit do I need for a mortgage?” The size of your mortgage deposit can affect the type of mortgage you qualify for, the interest rates offered, and even how quickly you get on the property ladder.
In this guide, we’ll explain deposit requirements, how much you might need as a first-time buyer, and tips to save for your house deposit.
1. What is a Mortgage Deposit?
A mortgage deposit is the lump sum of money you pay upfront when buying a property. It’s usually expressed as a percentage of the property’s purchase price.
For example:
- If the property costs £200,000 and you pay a 10% deposit (£20,000), you’ll need a mortgage for the remaining £180,000.
The higher your deposit, the less you need to borrow from the mortgage lender, which often means better deals and lower interest rates.
2. Minimum Deposit for a Mortgage
In the UK, the minimum deposit is typically:
- 5% of the property value – Some lenders offer 95% Loan-to-Value (LTV) mortgages.
- 10% deposit – More common, giving you access to a wider range of mortgage deals.
- 15–20% deposit – Often required if you have a poor credit history or are self-employed.
3. How Deposit Size Affects Your Mortgage
The size of your deposit impacts:
- Loan-to-Value (LTV) ratio: A smaller deposit means a higher LTV, which usually comes with higher interest rates.
- Mortgage eligibility: Larger deposits make you less risky to lenders.
- Monthly repayments: A bigger deposit reduces how much you need to borrow, lowering repayments.
Example:
- 5% deposit → Higher interest rates, fewer lender options.
- 20% deposit → More competitive mortgage rates and lower monthly costs.
4. Deposit Requirements for First-Time Buyers
If you’re a first-time buyer, most lenders will accept a 5–10% deposit, but having more saved gives you access to better mortgage deals.
Government schemes like Help to Buy or Lifetime ISAs can also support first-time buyers in building their house deposit.
5. Tips to Save for a Mortgage Deposit
- Create a monthly savings plan.
- Cut down on non-essential spending.
- Open a dedicated savings account or Lifetime ISA.
- Consider government support schemes if eligible.
- Avoid new debts while saving.
6. Frequently Asked Questions
Can I get a mortgage with no deposit?
In rare cases, 100% mortgages are available, but they are less common and usually require a guarantor.
What is the average deposit for first-time buyers in the UK?
On average, first-time buyers put down around 10–15%, depending on the property and location.
Does a bigger deposit mean I’ll get a better mortgage?
Yes — the larger your deposit, the lower your LTV, and the better interest rates you’ll likely receive.
Final Thoughts
So, how much deposit do you need for a mortgage? While the minimum is often around 5%, saving for at least 10–20% will give you more options, lower interest rates, and cheaper monthly repayments.
If you’re unsure, speak with a mortgage adviser who can help you understand the best deposit size for your financial situation.