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Phil Scott the mortgage centre
Author: Phil Scott -Director
Updated on July 1st, 2024

How much deposit do you need for a mortgage?

‘How much of a deposit do I need to buy a house?’ is one of the most frequently asked questions by prospective homebuyers. No matter if it’s for their own use or as a rental investment.

When it comes to buying a home, everyone’s circumstances are different, and this means that there is no set UK house deposit. Requirements for deposits will vary and the mortgage industry itself is quite complex.

What is a mortgage deposit?

A mortgage deposit is the lump sump you pay towards your mortgage lender for the purchase of a home. This is usually calculated on a percentage basis, from the total value of the property. This will allow a lender to establish the loan-to-value you will need.

For example, if the purchase price of a property is £300,000 and you provide a 10% deposit of £30,000, the loan-to-value will be 90%.

Deposits can be achieved from a number of ways. Most commonly, people save up, however many lenders accept gifted deposits from people like family or close friends. If you’re moving home it’s likely you would have built up some equity in your current home, therefore that can be used as a deposit on a new home.

Can you get a mortgage with 0% deposit?

Prior to the credit crisis, the mortgage market was flooded with 100% mortgage programmes. Without them, many current homeowners would not be able to live in their own homes.

However, post-credit crunch, mortgage lenders have adopted stricter lending practices. So, while 100% mortgages are still available on the current market, they are limited to specialised programmes. As a result, their applicability is restricted, and few applicants are able to pursue them.

Right to Buy mortgage is a government scheme that enables council tenants, and some housing association tenants, to buy their home at a substantial discount. Eligibility for this scheme must be confirmed by your landlord and you will still be subject to the same affordability checks as other mortgage applicants.

What are the benefits of a larger deposit?

There are a number of benefits that come with providing a larger deposit for a mortgage. The main one is that your monthly payments are likely to be lower, as you are borrowing less.

Another benefit is that you increase your chances of obtaining a better interest rate. Your deposit is a major factor in determining the rate you’ll be offered by a lender. If your loan-to-value is lower, a lender will see this as less risky, therefore they may be happy to provide you a lower rate.

Saving that extra bit of money to put towards a deposit can save you a lot over the course of your mortgage. So, if you feel like you could wait a bit longer before you commit to a mortgage, it’s always great to do so.

One final benefit that you may notice is that you open yourself up to more lenders. In turn, giving you access to more competitive mortgage deals. Because certain lenders may shy away from riskier borrowers (someone with a small deposit) or impose stricter criteria onto them.


Fill out our quick and easy Mortgage Affordability calculator below. We only require a few details to see how much you may be able to borrow.


How your deposit amount will affect your application

5% deposit mortgages

Having a 5% deposit and then searching for a mortgage with a 95% loan-to-value ratio is the bare minimum for the majority. There are government-backed low-deposit mortgage programmes and increased lender participation in recent years. Therefore, obtaining a mortgage with a 5% deposit is now more accessible than it has been for many years.

10 % deposit mortgages

This is the level at which virtually all lenders will begin to offer mortgages. A 10% deposit opens up a plethora of additional mortgage market options. Certain restrictions may still apply, especially when purchasing a new build home or if you have poor credit history. In such circumstances, some lenders may still require larger deposits.

15 % deposit mortgages

Borrowers with a 15% deposit can apply for 85% loan-to-value mortgages. Many lenders offer 85% LTV mortgages, so you may have the opportunity to access competitive interest rates. It’s worth noting that despite having a large deposit, lenders will still require you to pass credit and affordability checks.

If you’re looking to step onto the property ladder but have a history of poor credit, some lenders may require you have a minimum deposit of 15%.

25 % deposit mortgages

If you have a 25% deposit, you should now have access to some of the most competitive interest rates on the market. In addition to this, you should have a wide variety of options too.

While some lenders will reduce their rates further for borrowers with a 40% or 50% deposit, the majority will offer their lowest rates at 75% loan-to-value. Many lenders may also require a minimum deposit of 25% if you are considering a newly constructed flat/apartment.

Other mortgage costs to consider

When budgeting for a mortgage, its important to keep in mind other costs, not just your deposit. Some of the most common costs you’re likely to need to cover are:

  • Mortgage fees – this includes arrangement and valuation costs.
  • Stamp Duty – Stamp Duty is a tax imposed on UK property purchases.
  • Legal fees – you’ll most likely need a solicitor or conveyancer.
  • Removal costs – the costs of hiring movers or renting a van is often overlooked and can be quite costly.

If you’re unsure about any mortgage costs or your required deposit amounts, reach out today. Our advisors are on hand to discuss your situation and advise you on your options.

Speak to a member of our team

Tips on saving for a mortgage deposit

To ensure you have the best possible deposit for when you apply for a mortgage, keep in mind the following:

  • Buying with a partner is a great way to increase your deposit amount and speed up the whole saving process.
  • Set up a Lifetime ISA savings account, they are designed for those who want to buy their first home.
  • Cut down costs where possible and pay off any debt. By paying off debt first it will ensure that it doesn’t hinder you when you’re trying to save.
  • Shared ownership allows you to buy a share of your property and pay the remaining percentage in rent. You’ll initially need a smaller deposit and you’ll also be given the opportunity to buy the remaining percentage over time.
  • If relatives can help, it’s a great thing to utilise. Most lenders are happy to accept gifted deposits from relatives or friends.

Frequently asked questions

What is the minimum deposit required on a Buy-to-Let property?

In most cases, the minimum deposit for a Buy-to-Let mortgage is 20%, but there are times when it can be as low as 15%.

While a 20% deposit is the standard minimum, not all lenders will accept this, and for many the minimum is still 25%. Other factors, such as your status as a first-time landlord or an experienced portfolio customer, can affect the size of the deposit you may require.

If you’re unsure about what deposit you require, we recommend that you seek advice from a financial advisor. They can provide tailored support to your personal circumstances.


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