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How much deposit do you need?
MoneyHelper says buyers usually need a deposit of at least 5% to 10% of the property price. That is a starting range, not a guarantee that a lender will offer you a mortgage at that level. Low-deposit or no-deposit deals may be available, but their availability and terms vary.
Use local property prices to set a realistic target. For a £250,000 home, a 5% deposit is £12,500 and a 10% deposit is £25,000. These figures cover the deposit only, not legal, survey or removal costs. MoneyHelper’s deposit guidance gives the 5% to 10% range and example.
How does your deposit affect the mortgage?
Your deposit determines how much of the property price you need to borrow. Loan-to-value (LTV) is the mortgage as a percentage of the property price: on a £200,000 home, a £20,000 deposit leaves an £180,000 mortgage, or 90% LTV.
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A larger deposit lowers your LTV and usually gives you access to a wider choice of mortgage deals and more competitive rates. MoneyHelper says 60% LTV—which corresponds to a 40% deposit—typically attracts the most competitive rates; it is a general pattern, not a promise about an individual offer. The benefit of saving more should be weighed against how long it takes and the mortgage options available when you are ready to buy. Compare rates, fees and the extra saving needed to reach a different LTV level. MoneyHelper explains the relationship between deposits and LTV.
How to set a deposit savings target
- Choose a realistic purchase price. Look at homes in the area and price range where you expect to buy.
- Calculate 5% and 10% of that price. Treat these as initial benchmarks, then check what deposit lenders and mortgage deals require.
- Add buying costs separately. MoneyHelper advises budgeting for legal, survey and removal costs; you may also need money for furniture and household items. Don’t count the same savings toward both the deposit and these costs.
- Compare mortgage options at different LTVs. Check the rates and fees available to you, and how much additional saving would move you to another relevant LTV level.
- Check scheme eligibility and timing. Confirm that you qualify and can access the funds in time before counting a government bonus toward your target.
UK savings schemes that may help
The Lifetime ISA and Help to Buy ISA have different eligibility, purchase-price and timing rules. A Lifetime ISA remains open to eligible savers; the Help to Buy ISA is closed to new accounts.
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| Scheme | Who can use it | Contribution and bonus | Key first-home rules |
|---|---|---|---|
| Lifetime ISA | Eligible savers using it for a first home or later-life savings. | Contribute up to £4,000 per year; the government adds a 25% bonus, up to £1,000 per year. Contributions count toward the annual ISA allowance. | For a qualifying first-home purchase, the property must cost no more than £450,000; at least 12 months must have passed since the first payment; you must use a solicitor or conveyancer and buy with a mortgage. An unauthorised withdrawal is charged 25%. |
| Help to Buy ISA | Existing account holders only; new accounts are closed. | Existing holders can pay in up to £200 per month and may receive a 25% bonus of up to £3,000 if they meet the conditions. | The property-price limit is £250,000, or £450,000 in London. MoneyHelper says contributions can continue until November 2029 and the bonus can be claimed until December 2030. |
Lifetime ISA
The figures and purchase conditions above are from GOV.UK’s Lifetime ISA guidance and its withdrawal rules. Check the current eligibility conditions and your provider’s withdrawal process before relying on the funds for a purchase.
Help to Buy ISA
The account is not an option for new savers. If you already hold one, check the purchase conditions and deadlines before deciding how it fits your plan. GOV.UK sets out the Help to Buy ISA rules; MoneyHelper explains the contribution and bonus deadlines.
Where to keep deposit savings
Choose an account that suits your purchase timetable and how readily you may need to access the money. If you are considering an ISA scheme, make sure its withdrawal rules fit your circumstances; a bonus should not be treated as available until you meet the rules and your provider’s process allows the withdrawal. Keep deposit savings distinct from the money reserved for legal, survey and moving costs so that your purchase budget remains clear.
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