Mortgage Deposits: How Much Deposit Do You Need for a House?
, by Matt Stevens
Before you’ll be able to get a mortgage, you’ll need to save up a deposit for a house. The amount of money you’re able to pay upfront will have a direct effect on how much your chosen lender will allow you to borrow, the rate of interest you’ll pay, and which houses you can afford.
So saving a deposit for a mortgage and becoming a first-time buyer may seem almost impossible, but it is doable and there are also lots of government schemes designed to support people just like you in getting onto the property ladder. As long as you manage your expectations, set a realistic goal, make some changes to your spending habits, and accept the help available to you, we’re confident you can fulfil your dream of becoming a homeowner.
To help you with the process of saving up a house deposit, we’re going to talk you through everything you’ll need to keep in mind. Here’s what our mortgage deposit guide covers:
What is a mortgage deposit?
When purchasing a property, you’ll usually need to provide an upfront cash payment known as a mortgage deposit. This deposit represents a portion of the property's total cost, with the remainder covered by a mortgage, which you repay through monthly instalments.
A larger deposit means you own more of your home outright from the start. This allows you to take out a smaller mortgage and benefit from advantages such as lower interest rates, reduced monthly repayments, and the possibility of paying off your mortgage sooner.
What is the minimum deposit I need for a house?
Most lenders require a deposit of at least 5% to 10% of the property's value before offering you a mortgage, with them covering the remaining 90% to 95%. However, The larger the deposit you can put down, the better.
A bigger deposit increases your range of property options and allows you to access lower mortgage interest rates, which reduces your overall costs. For example, a 15% deposit can help you secure competitive mortgage deals, while a 25% deposit may give you access to the lowest interest rates.
House Price | 5% Deposit | 10% Deposit | 15% Deposit | 25% Deposit |
£200,000 | £10,000 | £20,000 | £30,000 | £50,000 |
£250,000 | £12,500 | £25,000 | £37,500 | £62,500 |
£300,000 | £15,000 | £30,000 | £45,000 | £75,000 |
£350,000 | £17,500 | £35,000 | £52,500 | £87,500 |
£400,000 | £20,000 | £40,000 | £60,000 | £100,000 |
£450,000 | £22,500 | £45,000 | £67,500 | £112,500 |
£500,000 | £25,000 | £50,000 | £75,000 | £125,000 |
What is the average deposit for a house in the UK?
As of 2025, first-time buyers in the UK usually put down an average deposit of £41,750 on a home worth £297,500, according to Better.co.uk. This works out to about 14% of the property price, with the remaining 86% covered by a mortgage.
For those moving to a new home, the average deposit is higher at £91,500 for a property valued at £350,000, which is roughly 26% of the purchase price.
That said, deposit amounts vary significantly depending on location. In London, for example, first-time buyers put down an average of £144,500 on a £425,000 property, equating to 34% of the home’s value, according to UK Finance.
Can you get a mortgage with no deposit?
Technically, yes, you can get a no deposit mortgage, which means a 100% loan-to-value (LTV) ratio. However, these are very rare and carry a high level of risk.
The main risk is that house prices could fall, leaving you in negative equity, where you owe more than the property is worth. This can make it difficult to move or remortgage. Additionally, 0% deposit mortgages come with very high interest rates and expensive repayments. As such, it's generally better to save for at least a 5% deposit, even if it means waiting longer to buy.
Can I get a loan for a house deposit?
Lenders typically discourage using a personal loan for a house deposit, as this can hinder your chances of getting a mortgage. Most lenders require the deposit to come from a non-repayable source, such as your savings.
When you apply for a mortgage, lenders will ask about the source of your deposit. If they discover you’ve taken out a loan for it or used your credit card, they may view this negatively. This is because using a loan for your deposit effectively means you have a 100% mortgage, with part of the borrowing being unsecured, which increases the risk for the lender.
We strongly advise against using a personal loan for your house deposit. Instead, aim to save the deposit to improve your chances of securing a mortgage with favourable terms.
How to save for a mortgage deposit
Saving for a house deposit can feel daunting given high property prices and, not to mention, associated extra mortgage fees and charges like legal and insurance costs. But, there are strategies to help you save more efficiently.
1. Reduce your outgoings where possible
Reducing your expenses is key to saving more. Consider your housing costs: moving back with parents, finding a cheaper property, or sharing accommodation can significantly cut expenses.
Evaluate your transport costs as well. If owning a car is expensive and you rarely travel long distances, switching to public transport, cycling, or car-sharing could save you money.
Moreover, look at your daily spending and find areas to cut back, such as dining out less frequently, avoiding online shopping, or spending less on your food shop. Small savings add up over time.
2. Take advantage of government schemes
The UK government is very aware of how difficult it has become to get on the property ladder, so there is a range of schemes with the goal of making homeownership more affordable. Here are the main schemes you may be able to take advantage of to boost your mortgage deposit and purchase a property.
Mortgage guarantee scheme
Launched on 19 April 2021, the Mortgage Guarantee Scheme increases the availability of 5% deposit mortgages and runs until June 30, 2025. It is beneficial for those who can manage monthly repayments but struggle to save a large deposit.
First Homes scheme
The First Homes Scheme offers a 30% discount on market price for local first-time buyers and key workers, with eligibility based on a household income under £80,000 (£90,000 in London) and a post-discount price cap of £250,000 (£420,000 in London).
Shared Ownership
The Shared Ownership scheme allows you to buy a 10–75% share of a property and pay rent on the remaining portion. This is available to those with a household income under £80,000 (£90,000 in London) and can benefit both first-time buyers and previous homeowners.
Lifetime ISA
The Lifetime ISA (LISA) lets you save up to £4,000 annually with a 25% government bonus. It can be used for a mortgage deposit or retirement. Eligibility is for adults aged 18-39, and the property value must be under £450,000. The account needs to be open for at least 12 months before using the funds to buy a home
If you’re planning to use one of these schemes to buy a property, our team of expert mortgage brokers can provide you with advice that will help you through the process. Applying for a mortgage using a scheme can involve taking some extra steps, but we can help to ensure everything goes smoothly.
Can parents or relatives help to cover your mortgage deposit?
Yes, parents and close family members can help cover your mortgage deposit through what is known as a gifted deposit. However, there are specific processes and requirements to follow. A gifted deposit is a sum of money given without the expectation of repayment. It must be a true gift, not a loan, for it to be accepted by lenders.
Typically, lenders will only accept gifted house deposits from immediate family members such as parents, siblings, and grandparents. More distant relatives, like aunts or uncles, may not be accepted.
Mortgage deposit calculator
If you’re not yet sure how much you’ll need to save to purchase your dream home, we have a house deposit calculator that can help to give you an idea.
You’ll simply need to provide us with some simple details like your annual income and whether you’re buying with anyone else. We’ll then be able to give you an insight into how much you could be eligible to borrow, so you can work out how much of your ideal property’s value you’ll need to save up as a mortgage deposit.
If you’re in the process of saving for a house, it’s normal to feel overwhelmed. Buying a property is likely to be one of the biggest investments you ever make, so preparing for it can take a lot of time and planning. Though, if you’re able to set realistic goals and stay focused, saving up a house deposit is doable.
And, if you are looking to make a purchase soon, we’re here to help. Our mortgage brokers are experts in helping prospective homebuyers to navigate the system and get the best deal to suit their needs. So, if you would like us to help you through your property buying journey, start a live chat with us or call our team on 01915809890 and we’ll be more than happy to assist you.
FAQs
What is LTV?
Loan-to-value is a ratio used by lenders to assess the relationship between the value of a property and the mortgage amount needed to purchase it. Most homebuyers cannot afford to buy a property outright and need a mortgage to cover the cost.
For example, if you want to buy a house worth £250,000 and have saved a £50,000 deposit, you would need a £200,000 mortgage. This results in an 80% LTV ratio, with your mortgage deposit covering the remaining 20%. LTV ratios of 80% or lower are generally considered low, while those over 90% are considered high.
High LTV ratios pose a greater risk to lenders, which is why mortgages with deposits less than 20% often come with higher interest rates. Saving for a larger deposit can help you secure better mortgage terms and lower long-term cost.
How much deposit do you need for a second home?
When buying a second property, you typically need a house deposit of at least between 15-25%. Mortgages for second homes often come with higher interest rates and require you to demonstrate that you can manage repayments on both mortgages.
Because lenders view second home mortgages as higher risk, they tend to be more expensive. To make your repayments more manageable, it’s advisable to contribute as large a deposit as possible.
Do you need a deposit to remortgage?
No, when you remortgage your home, the equity you’ve built up acts as a deposit. Equity is the difference between your home’s market value and the outstanding mortgage balance. For example, if your home is worth £250,000 and you owe £150,000, your equity is £100,000.
By adding any additional savings to your equity, you can increase your house deposit amount. This can help you secure better mortgage terms and lower interest rates when remortgaging.
How much deposit is required for a buy-to-let mortgage?
When purchasing a property to rent out, you’ll need a buy-to-let mortgage. Typically, the minimum house deposit required is 25% of the property’s value. As with other mortgages, a larger deposit can help you secure lower interest rates.
Securing a buy-to-let mortgage can be challenging, so it's crucial to demonstrate strong rental prospects and maintain a good credit score. Most buy-to-let mortgages are interest-only, meaning you’ll pay only the interest each month. The principal amount remains unchanged until you sell the property, at which point you must repay the capital in full.
