Buying a Property

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

The minimum deposit to buy a house in the UK is 5%, but the right deposit size depends on property price, your income, and the mortgage rates you want to access. This guide explains how it all works.

Published: 17 Mar 2026 · Updated: 17 Mar 2026 · 7 min read

#MortgageDeposit#HouseDeposit#LTV#FirstTimeBuyer#PropertyPassportUK

The deposit is the single biggest barrier for most first-time buyers in the UK. Understanding exactly how much you need — and why bigger is better — helps you set a realistic savings target and choose the right time to buy.

The Minimum Deposit

The absolute minimum deposit for a residential mortgage in the UK is **5% of the purchase price** (95% loan-to-value). The Mortgage Guarantee Scheme, backed by the government, supports 95% LTV lending for properties up to £600,000.

Property price	5% deposit	10% deposit	25% deposit
£200,000	£10,000	£20,000	£50,000
£300,000	£15,000	£30,000	£75,000
£400,000	£20,000	£40,000	£100,000
£500,000	£25,000	£50,000	£125,000

Why a Bigger Deposit Saves You Money

The larger your deposit (lower your LTV), the lower the interest rate you can access. Mortgage lenders price risk based on LTV bands. Moving from one band to another can save thousands over the mortgage term.

LTV	Typical 5-year fixed rate	Monthly payment on £250,000 mortgage	5-year total interest
95%	~5.5%	~£1,530	~£91,800
90%	~4.7%	~£1,430	~£85,800
75%	~4.2%	~£1,370	~£82,200
60%	~3.9%	~£1,330	~£79,800

*(Indicative 2026 rates. Actual rates vary by lender and circumstances.)*

The LTV Bands That Matter

Lenders adjust their rates at key LTV thresholds. The most significant improvements in rate occur at:

**90% LTV** (10% deposit) — a step change in products and pricing
**85% LTV** (15% deposit) — better rates again
**75% LTV** (25% deposit) — access to most lenders’ standard best rates
**60% LTV** (40% deposit) — market-leading rates

If you are close to a threshold (e.g. a 9% deposit), it is usually worth delaying slightly to reach the 10% threshold.

What Counts as a Deposit?

Your deposit can come from:

**Personal savings** — the most straightforward source; lenders will ask to see savings history
**Gifted deposit** — from a parent or family member; lender will require a signed letter confirming the gift is not a loan
**Equity** — if you are moving home and selling, your equity in the sold property forms your deposit
**Lifetime ISA** — the government adds a 25% bonus (up to £1,000 per year) on savings used for a first home purchase

**Not accepted as deposit:**

Personal loans
Credit card advances
Borrowed money from friends (in most cases)
Vendor gifted equity in excess of the lender’s permitted limits

Deposit vs Total Buying Costs

The deposit is not the only upfront cash you need. Budget separately for:

**Stamp duty** — varies by price, buyer type, and location
**Solicitor fees and disbursements** — £1,500–£2,500 for a buyer
**Survey** — £500–£1,500 depending on level
**Mortgage arrangement fee** — £0–£2,000
**Moving costs** — £500–£2,000

Total buying costs on top of the deposit typically run to 2–3% of the purchase price.

Schemes That Help With the Deposit

**Lifetime ISA:** Open before age 40. Save up to £4,000/year; government adds 25% (up to £1,000/year). Usable for properties up to £450,000. Withdrawal penalty if used for anything else before age 60.
**Help to Buy equity loan:** Now closed to new applicants in England. Check if the Wales scheme is available.
**Shared Ownership:** Buy a share (25–75%) of a property and pay rent on the rest. Lower deposit required on your share.
**Guarantor mortgages:** A family member guarantees part or all of the mortgage, allowing a smaller or zero deposit in some cases.