How Much Deposit Do You Need to Buy a House?
Find out how much deposit you need to buy your first home in the UK. We explain minimum requirements, ideal amounts, and how your deposit affects your mortgage.
Quick Answer
The minimum deposit for a UK mortgage is typically 5% of the property price (£15,000 on a £300,000 home). However, putting down 10-15% gets you better mortgage rates, and 20% or more gives you the best deals. Most first-time buyers save between 10-20% before buying.
What deposit do you need?
Your deposit is the money you pay upfront when buying a home. The rest comes from your mortgage. The bigger your deposit, the less you need to borrow — and the better rates you'll get.
Minimum deposit requirements
| Deposit % | Amount on £300k home | What it means |
|---|---|---|
| 5% | £15,000 | Minimum for most lenders |
| 10% | £30,000 | Better rates available |
| 15% | £45,000 | Good range of mortgage deals |
| 20% | £60,000 | Best rates, lower monthly payments |
| 25%+ | £75,000+ | Premium deals, lowest interest |
Some lenders offer 95% mortgages (5% deposit), but these come with higher interest rates. You'll pay more each month and more over the life of the mortgage.
Why deposit size matters
Lower interest rates
The interest rate on your mortgage is linked to your Loan-to-Value (LTV) ratio — the percentage of the property value you're borrowing. Lower LTV means lower rates.
Example on a £300,000 property:
| Deposit | LTV | Typical rate | Monthly payment* |
|---|---|---|---|
| 5% (£15k) | 95% | 5.5% | £1,618 |
| 10% (£30k) | 90% | 4.8% | £1,408 |
| 15% (£45k) | 85% | 4.4% | £1,277 |
| 20% (£60k) | 80% | 4.2% | £1,172 |
*Based on 25-year term, repayment mortgage. Rates are illustrative.
More lender choice
With a larger deposit, more lenders will accept your application. A 5% deposit limits your options; 15%+ opens up the whole market.
Equity cushion
If property prices fall, a larger deposit protects you from negative equity (owing more than your home is worth). This matters if you need to sell or remortgage.
How your deposit is calculated
Your deposit is a percentage of the purchase price, not the asking price. If you negotiate the price down, your deposit amount changes.
Example:
- Asking price: £320,000
- Agreed price: £300,000
- 10% deposit on agreed price: £30,000
Don't forget the other costs. You'll need money for stamp duty, surveys, legal fees, and moving costs on top of your deposit. Budget an extra £5,000-£10,000 minimum.
What counts as a deposit?
Lenders accept deposits from various sources, but they'll ask where the money came from:
Accepted sources
- Personal savings — Your own money saved over time
- Gifted deposit — Money given by family (needs a letter confirming it's a gift, not a loan)
- Inheritance — Inherited funds
- Lifetime ISA bonus — Government adds 25% to your savings (up to £1,000/year)
- Sale of assets — From selling a car, shares, etc.
Not accepted
- Borrowed money — Personal loans, credit cards
- Undocumented cash — Money without a clear paper trail
Lenders will conduct anti-money-laundering checks. You'll need to show bank statements proving where your deposit came from.
How to save your deposit faster
1. Set a clear target
Work backwards from your goal:
- Target property price: £280,000
- Desired deposit (10%): £28,000
- Additional costs: £7,000
- Total savings goal: £35,000
2. Use tax-advantaged accounts
Lifetime ISA:
- Save up to £4,000/year
- Government adds 25% bonus (up to £1,000)
- Must be opened before age 40
- Must be a first-time buyer
- Must buy property under £450,000
A Lifetime ISA gives you free money. If you save £4,000 per year for 4 years, you'll have £16,000 saved plus £4,000 in government bonuses — £20,000 total.
3. Reduce expenses
Review your spending and find cuts:
- Subscriptions you don't use
- Eating out less often
- Switching utility providers
- Cheaper phone contracts
4. Increase income
- Ask for a raise
- Take on overtime
- Start a side income
- Sell things you don't need
Gifted deposits
Around 30% of first-time buyers receive help from family. If you're lucky enough to get help:
What you'll need
- A gifted deposit letter signed by the giver
- Confirmation it's a gift, not a loan
- The giver's ID documents
- Proof of where their money came from
What the letter should say
- The amount being gifted
- That it's a gift with no expectation of repayment
- That the giver has no claim or interest in the property
- The relationship between giver and receiver
Most solicitors have a standard template for this.
How much should you really save?
The "right" amount depends on your situation, but here's our honest advice:
Minimum viable: 10% deposit + £5,000 for costs
Comfortable: 15% deposit + £8,000 for costs + £3,000 emergency fund
Ideal: 20% deposit + £10,000 for costs + 3 months' mortgage payments as buffer
Don't wait forever trying to save the "perfect" deposit. If you have a solid 10% and stable income, you're in a reasonable position to buy. House prices may rise while you're saving, eating into your gains.
First-time buyer advantages
As a first-time buyer, you have some benefits:
- Stamp duty relief: No stamp duty on properties up to £425,000
- Lifetime ISA eligibility: 25% government bonus on savings
- Government schemes: First Homes, Shared Ownership, Help to Buy (in Wales)
What Really helps you with
Once you have your deposit sorted, Really helps you search smarter:
- See what properties actually sell for — Not just asking prices
- Compare areas — Find where your budget goes further
- Track your journey — Stay organised from search to keys
See what you can afford