Finance · 6 min read

How Much Deposit Do I Need to Buy a House in the UK?

The minimum deposit for a UK house is usually 5% of the purchase price — £12,500 on a £250,000 home. But the rate you pay drops sharply as your deposit grows, and that changes everything.

Deposit bands and what they unlock

• 5% (95% LTV): entry point; highest interest rates
• 10% (90% LTV): noticeably better rates — the biggest single jump
• 15–20%: access to mainstream competitive deals
• 25%+: the best rates on the market

On a £250,000 home, the difference between a 95% and 75% LTV rate can exceed £150 a month — compare scenarios in our mortgage calculator.

First-time buyer help

A Lifetime ISA adds a 25% government bonus on up to £4,000 saved per year (£1,000 free money annually) for first homes up to £450,000. Shared ownership lets you buy 25–75% of a property and pay rent on the rest. Some lenders also offer family-assist mortgages where a relative's savings act as security instead of a deposit.

Don't forget the other costs

Budget an extra £3,000–£10,000 beyond the deposit: solicitor fees (£1,000–2,000), survey (£400–1,500), mortgage fees (£0–1,500), removals — and stamp duty where applicable (first-time buyers are exempt below the threshold in England).

Deposit vs monthly payment: a worked trade-off

On a £250,000 home, here's roughly how the loan-to-value band affects your monthly cost at a typical rate for each tier (illustrative figures — always get a personalised quote):

• 5% deposit (£12,500): £237,500 loan, higher rate tier, monthly payment noticeably above the 90% band
• 10% deposit (£25,000): £225,000 loan, meaningfully lower rate than 95% LTV
• 20% deposit (£50,000): £200,000 loan, mainstream competitive rates

Model your own scenario with the mortgage calculator — even a small increase in deposit percentage can be worth more in interest saved than months of extra saving might suggest, because it moves you into a better rate tier entirely, not just a smaller loan.

Gifted deposits

Many first-time buyers use money gifted from family. Lenders will typically want a signed letter confirming the money is a gift (not a loan that must be repaid) and proof of the source of funds, as part of anti-money-laundering checks. Some lenders restrict how much of a deposit can come from a gift versus your own savings, so it's worth confirming this early with a mortgage broker or adviser rather than assuming any gifted amount will be accepted without question.

Building your deposit faster

• Lifetime ISA: up to £1,000 free government bonus per year on £4,000 saved — the single highest guaranteed "return" available to first-time buyers.
• Automate the saving: a standing order on payday, before you see the money, consistently outperforms saving "whatever's left" at month-end.
• Separate account: keeping deposit savings away from everyday spending money reduces the temptation to dip into it.

Should you wait to save 20%, or buy sooner with 5–10%?

This is one of the most common first-time buyer dilemmas, and there's a genuine trade-off either way. Waiting to reach 20% gets you a better rate and lower monthly payment, but means paying rent for longer while house prices and rents may keep rising in the meantime. Buying sooner with a 5–10% deposit gets you on the property ladder earlier and building equity instead of paying a landlord, but at a higher rate until you can remortgage onto a better deal once your loan-to-value improves. There's no universally correct answer — it depends on local rent trends, how quickly you can realistically save, and how long you plan to stay in the property.

Deposit amounts by exact purchase price

See the deposit breakdown for your specific target price: £200,000, £250,000, £300,000 and £350,000 houses each have their own worked examples at 5%, 10%, 15% and 20% deposit levels.

What happens after you've saved your deposit

Once your deposit is ready, get a mortgage agreement in principle (AIP) before house hunting seriously — it tells estate agents and sellers you're a credible buyer and gives you a realistic budget. From there: find a property, instruct a solicitor, arrange a survey, and formally apply for the mortgage. The whole process from offer accepted to completion typically takes 8–12 weeks in the UK, so keep your deposit accessible and avoid making other large financial commitments (new credit cards, car finance) during this window, as lenders can re-check your circumstances right up to completion.

Recap

5% is the practical minimum deposit for most UK buyers, but every extra 5–10% saved typically unlocks a noticeably better rate. Model different deposit sizes against the resulting monthly payment with the mortgage calculator, explore a Lifetime ISA if you're a first-time buyer, and budget realistically for the £3,000–£10,000 of costs that sit alongside the deposit itself.

Frequently asked questions