A common starting target in the UK is a deposit of 5% to 10% of the property’s purchase price. On a £250,000 home, that is £12,500 at 5% or £25,000 at 10%. These are guidance examples, not a guarantee that a lender will approve a mortgage: affordability, the property and the mortgage available to you matter too.
How to calculate your deposit target
Multiply the home’s target price by the percentage you plan to put down. This gives the cash contribution to the purchase price; it does not include fees or any applicable property tax. MoneyHelper’s deposit-saving guide gives these examples:
| Home price | Deposit percentage | Deposit cash target |
|---|---|---|
| £250,000 | 5% | £12,500 |
| £250,000 | 10% | £25,000 |
| £280,000 | 5% | £14,000 |
These are arithmetic examples, not claims about current average house prices or typical first-time-buyer deposits.
How your deposit affects the mortgage
Your deposit reduces the amount you need to borrow. Loan-to-value (LTV) is the mortgage amount divided by the property’s value. For example, on a £250,000 home with a £25,000 deposit, the mortgage would be £225,000 and the LTV would be 90%, as illustrated in MoneyHelper’s first-time-buyer guide.
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A larger deposit generally means a lower LTV. MoneyHelper says lower LTVs are likely to secure lower interest rates and can give access to more mortgage deals; it says the cheapest rates are typically available at 60% LTV, which means a 40% deposit. That is a rate tier, not a requirement to buy.
A deposit alone does not secure mortgage approval
Lenders assess more than your deposit. GOV.UK’s mortgage affordability guidance says they consider how much you can borrow, your income and outgoings, whether monthly payments are affordable, and how you might cope with changes such as higher interest rates or redundancy. A 5% deposit therefore does not guarantee approval or a particular borrowing amount.
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A mortgage in principle can help you estimate how much a lender may offer, although it is not a final mortgage offer. The amount you can borrow and the products available depend on the lender’s assessment and the product details. Compare options by deposit and LTV, interest rate and total borrowing cost, monthly affordability, fees and eligibility.
Can you buy with no deposit?
MoneyHelper notes that 100% mortgages exist, but are limited and carry risks. One is negative equity: if the home’s value falls below the outstanding mortgage, selling or remortgaging may become difficult. A no-deposit mortgage is not a standard or assured alternative to saving a deposit. See MoneyHelper’s first-time-buyer guide for its discussion of these options.
Allow for costs on top of the deposit
Your deposit is not the full amount of cash you may need to complete a purchase. MoneyHelper lists solicitor fees, surveys and removal costs in addition to the deposit. Property purchase tax may also apply, depending on the home’s location, price and your circumstances.
The rules differ across the UK: England and Northern Ireland use Stamp Duty Land Tax (SDLT), Scotland uses Land and Buildings Transaction Tax (LBTT), and Wales uses Land Transaction Tax (LTT). Check the current rules for the relevant nation and your circumstances before estimating the total; thresholds and reliefs can change. MoneyHelper’s first-time-buyer guide explains the different taxes.
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Could a Lifetime ISA help you save?
An eligible first-time buyer may be able to use a Lifetime ISA (LISA) toward a qualifying home purchase. According to MoneyHelper’s LISA guide, a person aged 18 to 39 may open an account and contribute up to £4,000 each tax year; the government bonus is 25% of contributions, up to £1,000 a year. Eligibility and account rules apply:
- The purchase must meet the first-time-buyer requirements and the home must cost no more than £450,000.
- The account must have been open for at least 12 months before the qualifying purchase.
- A non-qualifying withdrawal before age 60 is charged 25%, which can mean losing some of your own savings as well as the bonus.
Help to Buy ISAs are closed to new applicants. Existing holders may continue saving until November 2029 and claim a bonus until November 2030, subject to the scheme rules. See MoneyHelper’s Help to Buy ISA guidance if you already have one.
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Choosing where to keep your deposit savings
When comparing savings accounts, consider how quickly you can access the money, whether withdrawals are restricted, and whether the account fits your purchase timeline. If you are considering a LISA, weigh its eligibility and home-purchase rules against the withdrawal charge for other uses. MoneyHelper suggests using comparison sites as a starting point and checking more than one, because results vary: it names MoneySavingExpert, MoneySuperMarket and Which? in its guide to choosing a savings account. This is a way to compare, not a live assessment of account rates or terms.
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