Saving
How much deposit do you need for your first home?
2 min read · Updated
The short answer
Most lenders want a deposit of at least 5% of the price, so £12,500 on a £250,000 home. A bigger deposit usually gets you a lower rate, and you'll need money for fees on top.
The smallest deposit most lenders accept
Lenders call the deposit and the loan your loan to value, or LTV. A 5% deposit means a 95% LTV mortgage. Plenty of lenders offer these to first-time buyers, but the rates are higher than with a bigger deposit, and there are fewer deals to choose from.
Why 10% can be worth waiting for
Rates usually step down at 90%, 85%, 75% and 60% LTV. On a £250,000 home at the same 4.5% rate over 30 years, a 5% deposit means about £1,203 a month and a 10% deposit about £1,140. In real life the 10% deal would often have a lower rate too, so the gap is usually bigger.
The cash you need on top
- Legal fees: about £1,730 for a freehold home at this price, more for leasehold.
- Searches: about £350.
- A survey: from about £730.
- Moving: about £600 for a small move.
- Stamp duty: nothing in England for a first-time buyer at this price, but it's different in Scotland and Wales.
Ways to build it faster
- A Lifetime ISA adds 25% on top of what you save, up to £1,000 a year, for a first home up to £450,000.
- Help from family, given as a gift. See how gifted deposits work.
- Shared ownership, where the deposit is 5% to 10% of your share, not of the whole home.
Common questions
- Can I buy a house with no deposit?
- A few lenders offer 100% mortgages, usually with strict rules and higher rates. Most first-time buyers put down at least 5%.
- Does a bigger deposit lower my rate?
- Usually, yes. Rates tend to drop as your deposit crosses 10%, 15%, 25% and 40% of the price.
A guide, not financial or legal advice. Rules and rates change, so check with your lender, broker or solicitor. Where our numbers come from.