How much deposit do I need to buy a house?
The short answer
5% is usually the minimum, so £12,500 on a £250,000 home. 10% opens up meaningfully better rates, and 20% is where the best deals start.
But the deposit is not the whole bill. Budget several thousand pounds on top for stamp duty, legal fees, searches, a survey and moving. Almost none of that can be borrowed.
The realistic target on a £250,000 purchase is closer to £30,000 to £32,000 saved than the £25,000 a 10% deposit suggests.
Why the percentage matters more than the amount
Lenders do not price mortgages on a sliding scale. They price them in bands, based on loan to value, which is the proportion of the property price you are borrowing. A 10% deposit means a 90% loan to value.
The bands typically sit at 95%, 90%, 85%, 80%, 75% and 60%. Crossing one of those lines can drop your interest rate noticeably, and that rate applies to the entire loan for the entire fixed period. Being £2,000 short of the next band down is one of the more expensive near-misses in personal finance.
| Deposit | Loan to value | What it typically means |
|---|---|---|
| 5% | 95% | Available from most high street lenders, but at the highest rates. Fewer products to choose from, and stricter affordability checks. |
| 10% | 90% | A significantly wider choice of products and a clearly better rate than 95%. The first point where most buyers feel they have real options. |
| 15% | 85% | Better again, and a comfortable buffer if the property values slightly under the agreed price. |
| 20% | 80% | Where the genuinely competitive rates begin. Most buyers see diminishing returns beyond this point. |
| 25% or more | 75% or less | The best rates available. Worth reaching if it is realistic, but rarely worth delaying a purchase by years to achieve. |
Rates change constantly and vary by lender, so treat the pattern rather than any specific figure as the useful part. The principle holds regardless of what the market is doing.
Work it out Mortgage repayment calculatorTry the same property price with different deposits and rates to see what a band change is actually worth over the term.
The costs beyond the deposit
This is where people come unstuck. They reach their deposit target, start looking seriously, and then discover another five thousand pounds is needed before they can complete.
On a typical purchase you should expect:
- Stamp duty, unless first-time buyer relief covers you. Due within days of completion and cannot be added to the mortgage.
- Conveyancing, usually £500 to £1,150, plus searches and disbursements on top.
- A survey, from around £400 for a standard one to £1,500 for a full building survey.
- Mortgage product fees, often £999 or more, though these can sometimes be added to the loan.
- Removals, and the immediate cost of actually living in the place, which is never nothing.
Every cash cost of buying in one place, so the number you save towards is the real one.
How much you can borrow shapes the answer
There is no point saving a 20% deposit for a property price you cannot get a mortgage on. Most lenders start from around four to four and a half times income, adjusted for your circumstances and existing commitments.
Work backwards. If lenders will consider around £160,000 on your income, and you have £25,000 saved, you are looking at properties around £185,000, not the £250,000 you might have had in mind. Knowing this early saves a lot of wasted viewing.
Check the range Mortgage affordability calculatorAn indicative borrowing range based on income, deposit and commitments, shown honestly as a range.
Things that change the calculation
First-time buyer relief
In England and Northern Ireland, first-time buyers pay no stamp duty up to a threshold, and a reduced amount up to a cap above which the relief disappears entirely. Scotland has its own version worth a few hundred pounds. Wales currently offers no first-time buyer relief at all. This can swing your total requirement by thousands, so check which applies where you are buying.
Gifted deposits
Most lenders accept a gift from close family, but they will want a letter confirming it is genuinely a gift with no expectation of repayment and no claim on the property. Some lenders restrict who can gift. If family money is part of your plan, confirm your lender accepts it before you get too far along.
Lifetime ISAs
A Lifetime ISA adds a government bonus to savings used for a first home, subject to conditions including a property price cap and a minimum period the account must have been open. Worth investigating early, since the rules include timing requirements that catch people out if they open one too close to buying.
New build and shared ownership
Deposit requirements differ for new builds, and some lenders apply stricter loan to value limits on flats. Shared ownership changes the arithmetic entirely, since you buy a share and pay rent on the rest.
Should you wait to save more?
There is no universal answer, and anyone giving you one confidently is overreaching. The trade-off is real in both directions: waiting means a better rate and more choice, but also means paying rent for longer and being exposed to price movements you cannot predict.
What is usually true is that jumping one loan to value band is worth waiting a few months for, and that waiting years to jump two is rarely worth it. If you are close to a band, run the numbers both ways before deciding.
Plan the saving Savings goal calculatorWork out what you need to set aside each month, or how long your current saving will take.