Saving for a deposit is often the biggest hurdle for first-time buyers. The amount you need depends on the price of the property you want to buy and the loan-to-value (LTV) ratio you are comfortable with. This guide explains how much deposit you need, why a larger deposit helps, practical ways to save, and how family support can make homeownership achievable sooner.
For a complete overview of buying your first home, read our first-time buyer guide.
How much deposit do first-time buyers need?
Most first-time buyers need a minimum deposit of 5% of the purchase price, though saving 10% will unlock significantly better mortgage rates. Use our affordability calculatorto estimate how much you could borrow based on your deposit and income. For a £250,000 property, that means at least £12,500. For a £200,000 property, the minimum would be £10,000.
However, a 5% deposit puts you at 95% LTV, which means higher interest rates and fewer lender options. Reaching 10% (£25,000 on a £250,000 home) opens up a much wider range of deals at significantly better rates. The difference can be substantial — a 0.5% rate saving on a £200,000 mortgage could save you around £80 per month, or nearly £1,000 per year.
The best rates are typically available at 60% LTV, but for most first-time buyers the realistic targets are 5%, 10%, or 15%. Even moving from 5% to 10% can make a noticeable difference to your monthly payments and the total cost of your mortgage.
| Deposit Size | LTV | Rate Impact | Lender Choice |
|---|---|---|---|
| 5% (£12,500 on £250k) | 95% | Highest rates available | Limited — fewer lenders offer 95% LTV |
| 10% (£25,000 on £250k) | 90% | Noticeably lower rates | Much wider choice of deals |
| 15% (£37,500 on £250k) | 85% | Further rate reduction | Good range of competitive products |
| 20% (£50,000 on £250k) | 80% | Significantly better rates | Access to most mainstream deals |
| 25%+ (£62,500+ on £250k) | 75% or below | Best rates on the market | Full range of lenders and products |
A 0.5% rate saving on a £200,000 mortgage could save you around £80 per month — nearly £1,000 per year. Reaching a 10% deposit is often the single most impactful step a first-time buyer can take.
How can you save for a house deposit faster?
The most effective ways to save faster are opening a Lifetime ISA for the 25% government bonus, setting up automatic transfers to a dedicated savings account, and cutting discretionary spending. Here are the key strategies that can help:
- Open a Lifetime ISA:Save up to £4,000 per year and receive a 25% government bonus of up to £1,000 annually. Over four years, that is £4,000 in free money towards your deposit. You must be aged 18–39 to open one.
- Set a monthly savings target: Work out how much you need and by when, then set up a standing order to a dedicated savings account. Treat it like a bill that must be paid.
- Review your spending: Track your expenses for a month and identify areas where you can cut back. Subscriptions, dining out, and impulse purchases are common areas where savings can be found.
- Consider higher-interest savings accounts: Regular saver accounts often offer higher rates if you commit to saving a fixed amount each month. Shop around and make your savings work harder.
- Reduce your rent: If possible, consider moving to a cheaper rental, sharing with flatmates, or living with family temporarily to accelerate your savings.
Can your family help with your deposit?
Yes, family members can help through gifted deposits, family springboard mortgages, or joint borrower sole proprietor schemes. Many first-time buyers receive some form of financial help from family. Here is how each option works:
- Gifted deposit: A family member gives you money for your deposit as a gift, with no expectation of repayment. Most lenders accept gifted deposits from immediate family members, although they will require a signed letter confirming the gift is not a loan.
- Family springboard or offset: Some lenders offer products where a family member places their savings into a linked account as security. The savings are returned (often with interest) after a set period, provided you keep up with your mortgage payments.
- Joint borrower, sole proprietor: A scheme where a family member is on the mortgage (helping with affordability) but not on the property title. This means they help you qualify for a larger mortgage without being a legal owner of the property.
What is a guarantor mortgage and how does it work?
A guarantor mortgage is an arrangement where a family member (usually a parent) agrees to cover your mortgage payments if you are unable to make them. The guarantor’s property or savings are used as additional security, which can help you borrow more or access a mortgage with a smaller deposit.
This is a significant commitment for the guarantor, as they become liable for your mortgage if you default. Both parties should seek independent legal advice before entering into a guarantor arrangement. Not all lenders offer guarantor products, so working with a broker is advisable to find the right option.
What other costs do first-time buyers need to budget for?
Beyond your deposit, expect to pay £2,000 to £5,000 or more in additional costs including solicitor fees, surveys, and insurance. Make sure you also budget for:
- Solicitor or conveyancer fees (£800–£1,500 plus disbursements)
- Survey or homebuyer report (£250–£700)
- Stamp duty (first-time buyers pay nothing on the first £300,000) — check your liability with our stamp duty calculator
- Moving costs (£300–£1,500 depending on distance and volume)
- Furnishing and any immediate repairs or improvements
- Buildings insurance (required by your lender from the date of exchange)
A specialist broker can help you understand the full picture of what you need and find the best mortgage for your deposit size. Get started by completing our short online form.
- Most lenders require a minimum 5% deposit, but reaching 10% unlocks significantly better rates.
- A Lifetime ISA gives you up to £1,000 per year in free government bonus towards your deposit.
- Gifted deposits from family are widely accepted — the lender will need a signed gift letter.
- Guarantor mortgages can help but carry serious risk for the guarantor — get legal advice.
- Budget for additional costs beyond your deposit, including solicitor fees, surveys, and insurance.