The short answer: at least 5% of the purchase price. But the amount you put down changes what mortgage deals are available to you, how much you'll pay each month, and how much the whole thing costs over time.
Most first-time buyers spend months, sometimes years, saving for a deposit. Understanding how much you actually need, and what difference it makes, helps you set a realistic target and avoid surprises.
The minimum
Most lenders require a minimum deposit of 5% of the property's purchase price.
On a £250,000 home, that's £12,500.
There are a small number of 100% mortgage products available, but they typically require a guarantor, usually a parent, who puts savings or their own property on the line as security. These are niche and come with significant conditions.
For most buyers, 5% is the realistic starting point.
Why a bigger deposit helps
The deposit determines your loan-to-value ratio (LTV). A 5% deposit means a 95% LTV mortgage. A 10% deposit means 90% LTV. And so on.
The lower your LTV, the better the interest rates available to you.
The difference is real:
- At 95% LTV, interest rates are typically 1–2% higher than at 60% LTV
- On a £250,000 property, that difference can add up to tens of thousands of pounds over the life of the mortgage
- Lenders also offer a wider choice of products at lower LTVs
Common deposit thresholds where rates improve noticeably: 10%, 15%, 20%, and 25%.
If you're close to one of these thresholds, it can be worth pushing to reach it, even a small increase in deposit can unlock a meaningfully better rate.
What counts as a deposit
Your deposit can come from:
- Personal savings
- A gift from family (known as a gifted deposit, your lender will need a signed letter confirming the gift and that it doesn't need to be repaid)
- An inheritance
- Equity from an existing property
- Government schemes such as the Lifetime ISA
What doesn't count:
- Borrowed money (credit cards, personal loans), lenders check for this and it will likely result in a declined application
- Undocumented cash, lenders are required to verify the source of your deposit under anti-money laundering rules
The Lifetime ISA
If you're a first-time buyer aged 18–39, a Lifetime ISA lets you save up to £4,000 per year and the government adds a 25% bonus, up to £1,000 per year.
On a maximum contribution, that's £5,000 per year including the bonus. Over four years, that's £20,000.
The property must cost £450,000 or less, and you need to have held the account for at least 12 months before using it.
It's one of the most straightforward ways to boost your deposit.
How long does it take to save?
That depends on where you're buying and how much you can set aside each month.
A few examples at 5%:
- £150,000 property → £7,500 deposit → saving £300/month takes about 2 years
- £250,000 property → £12,500 deposit → saving £300/month takes about 3.5 years
- £350,000 property → £17,500 deposit → saving £300/month takes about 5 years
These numbers shift significantly with a Lifetime ISA bonus, gifted deposits, or shared savings with a partner.
Shared ownership
If saving a full deposit feels out of reach, shared ownership lets you buy a share of a property (usually 25–75%) and pay rent on the rest. The deposit is based on your share, not the full price.
On a £250,000 property at a 25% share, your deposit would be 5% of £62,500, just over £3,000.
It's not right for everyone, but it significantly lowers the barrier to getting on the ladder.
What about other upfront costs?
The deposit isn't the only cash you'll need. Budget for:
- Solicitor/conveyancer fees: £1,000–£2,000
- Survey: £300–£1,000+ depending on the level
- Mortgage arrangement fee: £0–£2,000 (sometimes added to the loan)
- Stamp duty: usually nil for first-time buyers on properties under £300,000
- Moving costs: £500–£1,500
A common mistake is saving exactly enough for the deposit and being caught short on the other costs.
Setting your target
Work out what you can realistically afford to buy, then set a deposit target that gets you to at least 10% if possible. The jump from 5% to 10% is where you see the biggest improvement in available rates.
If 10% is a stretch, 5% still gets you on the ladder, just be aware that your monthly payments and total cost will be higher.
Speak with a mortgage adviser early
A mortgage adviser can show you exactly what difference each deposit level makes for your situation. It's worth having that conversation early, before you've set your heart on a number.
This article is for general information only and does not constitute mortgage or financial advice. Always speak to a qualified mortgage adviser before making any decisions.