Money and mortgages
How Much Deposit Does a First-Time Buyer Need?
Understand first-time buyer deposits, loan-to-value ratios and why you need money set aside for fees and emergencies as well as your house deposit.
Quick answer
A first-time buyer will commonly need a deposit of at least 5% to 20% of the purchase price. A larger deposit reduces the proportion you need to borrow and may give you access to a wider range of mortgage deals. Keep buying costs and your emergency buffer separate.
Education, not advice. Use this as a clear starting point, check the linked official sources and speak to an appropriately regulated professional before acting. Read the disclaimer
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What a house deposit does
Your deposit is the part of the purchase price you pay yourself. The remaining amount is usually covered by your mortgage. If a home costs £250,000 and you have a £25,000 deposit, you would need to borrow £225,000.
In that example, your deposit is 10% and the mortgage is 90% of the property's value. This is often described as a 90% loan-to-value, or LTV, mortgage.
Deposit examples
- 5% deposit on a £200,000 home: £10,000.
- 10% deposit on a £200,000 home: £20,000.
- 15% deposit on a £200,000 home: £30,000.
- 20% deposit on a £200,000 home: £40,000.
These examples show the deposit only. They do not include legal work, surveys, mortgage fees, property tax, moving costs or your emergency buffer.
Why a larger deposit can help
A larger deposit means borrowing a smaller percentage of the property's value. MoneyHelper notes that larger deposits can give buyers access to a wider range of mortgage deals or lower interest rates.
Do not empty every savings account to reach the next deposit band without considering the trade-off. A home can need repairs quickly, and some buying costs are paid before completion.
Before you set a deposit target
- Choose a realistic property-price range for your area.
- Estimate your buying costs separately.
- Leave a buffer for repairs and unexpected expenses.
- Check the rules carefully if using a Lifetime ISA or another scheme.
Common questions
Can a first-time buyer get a mortgage with a 5% deposit?
Some mortgages are available with a 5% deposit, but availability, rates and lender criteria can change. A regulated mortgage adviser or lender can explain the options that fit your circumstances.
Is my deposit the only cash I need?
No. Budget separately for buying costs such as legal work, a survey, mortgage fees, property tax where applicable, moving costs and an emergency fund.
Official sources
Use these sources to check the latest rules and read more detail:
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