Buying & Affordability
How much deposit do I need to buy a house?
The minimum deposit on a UK residential mortgage is 5% of the purchase price, available through 95% LTV products and the Mortgage Guarantee Scheme. On a £250,000 home that's £12,500. A 10% deposit unlocks a wider product range and noticeably cheaper rates, while 25% (75% LTV) is generally where the sharpest pricing begins.
Buy-to-let lenders require larger deposits, typically 25% minimum, with the best rental coverage products at 35–40%. First-time buyers can use Lifetime ISAs, where the Government adds a 25% bonus on contributions up to £4,000 per year, against properties up to £450,000.
Remember the deposit is only one cash outlay. Budget separately for stamp duty (use the SDLT calculator), conveyancing fees, survey, valuation and moving costs. MoneyHelper publishes worked examples by price band.
What this means in practice
On a £280,000 first home, a 5% deposit is £14,000, a 10% deposit £28,000 and a 25% deposit £70,000. Pricing on a five-year fix in early 2026: 95% LTV around 5.05%, 90% LTV around 4.65%, 75% LTV around 4.25%. The £56,000 jump from 5% to 25% deposit saves roughly £140/month or £8,400 over the fix — meaningful but not life-changing. On top of the deposit, expect £1,000 conveyancing, £600 survey, £100 searches, £200 lender fees, £700 moving costs and possibly SDLT. Total cash needed at 5% LTV: roughly £16,600 plus SDLT.
Related questions
Can I use a gifted deposit?
Yes, and it is common — the FCA reports roughly 40% of first-time buyer deposits include a parental contribution. Lenders require a signed Deed of Gift confirming the funds are a gift not a loan, that the donor has no interest in the property, and that the donor will not live there. Source-of-funds checks under Money Laundering Regulations 2017 require documented evidence (recent statements, sale of asset, ISA withdrawal). Gifts from outside the immediate family face stricter scrutiny.
Are there schemes that reduce the deposit needed?
Several. The Mortgage Guarantee Scheme underwrites 95% LTV products through participating lenders. Skipton's Track Record mortgage offers 100% LTV for renters with 12 months' clean rental history. Shared Ownership lets buyers purchase 25–75% and rent the remainder, reducing the cash deposit proportionately. The First Homes scheme offers 30–50% discounts on selected new builds for local first-time buyers earning under £80,000 (£90,000 in London). Each carries trade-offs in price flexibility and resale.
Related reading
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