How much deposit do you really need to buy your first home?
Wondering how much you need to save for your first home? Here's a plain-English look at deposits, what they mean for your rate, and the help available.
By Ian Moore, Director
Saving a deposit is often the biggest hurdle to buying your first home — but it may be smaller than you think. Here's how deposits work and what they mean for the mortgage you can get.
What is a mortgage deposit?
Your deposit is the share of the property's price you pay yourself. The rest is covered by your mortgage. It's usually shown as a percentage — so a 10% deposit on a £200,000 home is £20,000.
What's the minimum?
Most lenders look for a deposit of at least 5% of the property's value, meaning you borrow the remaining 95%. Some lenders and schemes can help you buy with a smaller deposit, and there are options designed specifically for first-time buyers.
Why a bigger deposit can help
The size of your deposit affects your loan-to-value (LTV) — the size of your mortgage compared with the property's value. A lower LTV generally unlocks lower interest rates, because you're seen as lower risk. As a rough guide:
- A 5% deposit (95% LTV) gets you on the ladder, with higher rates
- A 10–15% deposit gives more choice and better rates
- A 25%+ deposit accesses the most competitive deals
Don't forget the other costs
As well as your deposit, budget for valuation and legal fees, and possibly Stamp Duty — though first-time buyers often benefit from relief up to certain thresholds. We'll explain exactly what applies to your purchase.
How we can help
Everyone's situation is different, and the right deposit for you depends on your budget, the property and your plans. We'll look at the whole market and explain your options clearly — with no obligation.
This article is general information, not personal advice. For a recommendation tailored to your circumstances, please get in touch. Your home may be repossessed if you do not keep up repayments on your mortgage.