How Much Deposit Do You Need for a House? The Whole-of-Market Answer

Written by Jake Stott, Knox Mortgages. Last reviewed: 29 July 2026.

A mortgage deposit is the cash you put towards a property purchase yourself, with the mortgage covering the rest. In the UK the minimum deposit for a standard residential mortgage is 5% of the purchase price, so £12,500 on a £250,000 home. Most buyers put down more than the minimum, because a larger deposit unlocks a cheaper interest rate.

Most guides on this question are written by a single lender, so they can only describe that lender’s own products. This one covers deposit thresholds across the whole market, including the low-deposit routes the high street rarely mentions.

How much deposit do you need for a house in the UK?

You need a minimum of 5% of the purchase price. That is the floor across almost the entire mainstream market, and it applies to first-time buyers and home movers alike. A small number of lenders go beyond it with 100% and guarantor products, covered further down.

In practice most buyers put down more. The average first-time buyer deposit is around £61,000 across the UK and about £132,000 in London, against an average first-time buyer purchase price of £238,908 as at April 2026.

Purchase price	5%	10%	15%	20%	25%
£150,000	£7,500	£15,000	£22,500	£30,000	£37,500
£200,000	£10,000	£20,000	£30,000	£40,000	£50,000
£250,000	£12,500	£25,000	£37,500	£50,000	£62,500
£300,000	£15,000	£30,000	£45,000	£60,000	£75,000
£400,000	£20,000	£40,000	£60,000	£80,000	£100,000

What is loan to value and why does it decide your rate?

Loan to value, or LTV, is the mortgage expressed as a percentage of the property value. A £15,000 deposit on a £300,000 house leaves a £285,000 mortgage, which is 95% LTV. Your deposit and your LTV are the same fact stated two ways: a 5% deposit is 95% LTV, a 25% deposit is 75% LTV.

Lenders price in bands, and those bands are not evenly spaced. Rates fall sharply between 95% and 90%, then flatten out. These were the lowest two-year fixed rates available to first-time buyers as at 28 July 2026:

Deposit	LTV	Lowest two-year fixed rate
5%	95%	5.27%
10%	90%	4.58%
15%	85%	4.44%
20%	80%	4.43%
25%	75%	4.43%
40%	60%	4.13%

Rates move constantly and product fees vary, so treat this as the shape of the market rather than a live rate table.

A worked example: what one extra deposit band is worth

Take a £250,000 house on a 25-year repayment mortgage.

• 5% deposit (£12,500): £237,500 borrowed at 95% LTV and 5.27%, costing roughly £1,426 a month.
• 10% deposit (£25,000): £225,000 borrowed at 90% LTV and 4.58%, costing roughly £1,261 a month.

An extra £12,500 of deposit saves about £165 a month, close to £3,960 across a two-year fixed period. Note how much smaller the gains are after that: moving from 90% to 75% LTV is worth only another 0.15% here, so holding off for years to reach 25% rarely pays for itself.

Can you buy a house with a 5% deposit?

Yes. 95% LTV lending is a normal, permanent part of the UK market, supported by the Mortgage Guarantee Scheme, rebranded Freedom to Buy, which the government confirmed in July 2025 would run indefinitely rather than closing as originally planned.

The scheme gives participating lenders a government-backed guarantee on the riskiest slice of 91% to 95% LTV loans, which keeps those products on the shelf.

• Available on properties up to £600,000
• Open to first-time buyers and home movers, not just first-timers
• Offered by major lenders including Lloyds, Halifax, Barclays, NatWest, Santander and HSBC
• The property must be your own home, not a buy to let

You do not have to use the scheme. Many lenders price 95% products outside it, and the cheapest 95% deal is often not a scheme product at all.

Can you get a mortgage with no deposit at all?

Yes, but the options are narrow and criteria-heavy. Skipton Building Society’s Track Record mortgage is the main genuine 100% product, aimed at renters who pay rent reliably but cannot save a lump sum. It requires:

• At least 12 consecutive months of rent paid on time within the last 18 months
• 12 months of household bills paid within the last 18 months
• No missed credit payments in the last 6 months
• First-time buyer status, or no property ownership in the last three years

Otherwise the realistic no-deposit routes involve family: guarantor mortgages, joint borrower sole proprietor arrangements and springboard products, which let a parent’s income or savings support the application without them owning the property. Rates on 100% products sit above standard rates.

How can you increase your deposit?

Lifetime ISA

A Lifetime ISA pays a 25% government bonus on up to £4,000 saved per tax year, so a maximum of £1,000 free each year. The rules:

• You must be 18 to 39 to open one
• The property must cost £450,000 or less
• The account must have been open at least 12 months before you buy
• Withdrawing for anything other than a first home or retirement at 60 triggers a 25% charge, which can leave you with less than you paid in

A couple each saving the full allowance collects £2,000 a year towards the same purchase. It is the most effective deposit-booster available, and no lender guide ranking for this question mentions it. The government will replace the Lifetime ISA with a simpler First Time Buyer ISA from around April 2028; existing accounts continue under current rules until then.

Gifted deposits

A gifted deposit is money given, not lent, by a family member. Lenders accept them routinely, but want a signed gifted deposit letter confirming the money is a gift with no repayment expected and no stake in the property, plus proof of the giver’s identity and where the funds came from. Most lenders restrict gifts to immediate family; some accept wider relatives or friends.

How much deposit do you need for a new build or shared ownership?

New build deposits have tightened. Deposit Unlock, the housebuilder-backed scheme allowing 5% deposits on new builds, closed to new completions in April 2026, so it is no longer a route for new buyers. Gen H’s New Build Boost is one current alternative, pairing a 5% deposit with an 80% mortgage and a 15% interest-free equity loan on selected developments.

Shared ownership often needs the least cash of all. You buy a share, typically 25% to 75%, and your deposit is calculated on that share rather than the full value. A 10% deposit on a 40% share of a £250,000 home is £10,000, not £25,000. You then pay rent to the housing association on the rest.

How much deposit do you need for a buy to let?

Buy to let deposits start at 20% and 25% is the practical norm, so £50,000 to £62,500 on a £250,000 investment property. Borrowing is assessed on projected rental income rather than salary, which is a different calculation entirely. Our buy to let mortgage advice covers how lenders stress-test rent.

What costs do you need on top of the deposit?

Cost	Typical amount
Stamp duty (first-time buyer, England and Northern Ireland)	£0 up to £300,000, then 5% on the portion from £300,001 to £500,000. No relief above £500,000
Conveyancing and legal fees	£1,000 to £1,800
Survey	£400 to £1,500 depending on level
Lender product fee	£0 to £1,999, often addable to the loan
Removals	£300 to £1,200

A first-time buyer purchasing at £320,000 pays £1,000 in stamp duty: nothing on the first £300,000, then 5% of the £20,000 above it. Cross £500,000 by a single pound and first-time buyer relief disappears entirely.

Do you really need a 20% deposit?

No, and that belief keeps capable buyers renting for years longer than necessary. It is the most expensive myth in the first-time buyer market.

The floor is 5%. The meaningful pricing improvement happens at 10%, not 20%, and everything above 15% delivers diminishing returns while your rent keeps going out of the door. If you are choosing between buying at 90% LTV this year and 80% LTV in three years, run both numbers before assuming the bigger deposit wins.

Having the deposit is only half the test. Lenders cap borrowing at roughly 4.5 times income, so deposit and borrowing power together set your ceiling. See how much you can borrow for a mortgage and how lenders calculate affordability for the other half.

Frequently asked questions

Is £20,000 enough for a house deposit?

Yes, in most of the UK. £20,000 is a 10% deposit on a £200,000 home or a 5% deposit on a £400,000 home. The limit is usually income rather than deposit: borrowing £180,000 on top needs an income of around £40,000 on a standard 4.5 times multiple.

How much deposit do you need for a £300,000 house?

£15,000 at the 5% minimum, or £30,000 at 10%. The 10% version is worth targeting: on a £300,000 purchase, dropping from 95% to 90% LTV at current pricing saves roughly £200 a month on a 25-year repayment mortgage.

Is £10,000 enough for a house deposit?

Yes, on a purchase up to around £200,000, where £10,000 is the 5% minimum. You would need an income near £42,000 to support the £190,000 mortgage. A Lifetime ISA or a gifted top-up to £20,000 would move you into a cheaper rate band.

Is a £30,000 salary enough to buy a house?

Yes, depending on price and deposit. At 4.5 times income a £30,000 salary supports a mortgage of around £135,000, so with a £15,000 deposit you are looking at a purchase price near £150,000. Buying jointly changes this significantly, as lenders assess combined income.

Can your whole deposit be a gift?

Yes. Most lenders accept a 100% gifted deposit from immediate family, provided you supply a gifted deposit letter confirming the money is not a loan and evidence of where the funds came from. Some lenders want you to contribute a portion yourself.

Does a bigger deposit reduce your monthly payments?

Yes, twice over. You borrow less, and you usually borrow at a lower rate. On a £250,000 purchase, increasing the deposit from £12,500 to £25,000 cuts the monthly payment by around £165 on a 25-year term at current pricing.

How long does it take to save a house deposit?

Saving £250 a month with a Lifetime ISA bonus reaches a £15,000 deposit in about four years. Saving £500 a month halves that to roughly two years. Gifted deposits and family-assisted products are the main way buyers shorten it.

Do you need a bigger deposit if you are self-employed?

No. Self-employed applicants access the same LTV bands and the same 5% minimum. What changes is the evidence required, typically two years of accounts or SA302s, and which lenders will consider your income structure. Our freelancer first-time buyer page covers this.

Do you need a bigger deposit with bad credit?

Often yes. Specialist lenders that accept defaults, CCJs or missed payments typically want 10% to 25% depending on how recent and how severe the issue is. See our guide to bad credit mortgages.

Whatever you have saved, the useful next step is finding out what it buys across the whole market rather than at one bank. Our first-time buyer service covers the process, and buyers in the North West can start with first-time buyer mortgage advice in Manchester.

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