First-Time Buyer Deposit: How Much Do You Need?

Most first-time buyers need a deposit of at least 5% of the purchase price, so £12,500 on a £250,000 home. Some lenders require 10% or more depending on the property, credit history and affordability.

Buying your first home usually starts with one question: how much deposit do I actually need? You may have heard that you need 10% or 20%, but some mortgage products accept 5%. The right figure depends on the property, your income, credit history, lender criteria and what you can comfortably afford each month.

Not sure whether you qualify? Check what counts as a first-time buyer.

This guide explains how to calculate a deposit, how loan-to-value (LTV) affects mortgage choices, where your deposit can come from and what other costs to allow for. For help with the entire purchase, see our first-time buyer mortgage advice page.

How much deposit do you need for your first home?

Some lenders offer mortgages with a 5% deposit (95% LTV). Others may require 10%, 15% or more. Not every borrower or property qualifies for a 95% mortgage. Certain flats, new-build properties and unusual construction types may be subject to different maximum LTV limits.

A deposit is the amount of the purchase price you pay yourself. The mortgage normally covers the remainder, subject to the lender’s valuation and approval.

Purchase price	5% deposit	10% deposit	20% deposit
£180,000	£9,000	£18,000	£36,000
£200,000	£10,000	£20,000	£40,000
£250,000	£12,500	£25,000	£50,000
£300,000	£15,000	£30,000	£60,000
£400,000	£20,000	£40,000	£80,000

These are deposit calculations, not confirmations that a lender will offer the remaining mortgage. You must also pass affordability, credit and property checks.

What does loan-to-value (LTV) mean?

LTV is the mortgage amount divided by the property’s value, expressed as a percentage. If you buy a £250,000 home with a £25,000 deposit, you need a £225,000 mortgage:

£225,000 ÷ £250,000 × 100 = 90% LTV.

A £12,500 deposit on the same property would mean a £237,500 mortgage at 95% LTV.

Lenders commonly price products in LTV bands. A larger deposit can unlock additional options and may reduce the interest rate, but that is not automatic. The overall cost also depends on fees, the product type, the mortgage term and the lender’s affordability assessment.

If the lender values the property below the agreed purchase price, you may need a larger cash contribution or have to renegotiate the price. This is why a deposit calculated against the asking price is not always the final amount required.

Is a 5% deposit enough?

A 5% deposit can be enough for an eligible first-time buyer using a suitable 95% LTV product. However, lenders may apply tighter affordability or property criteria, and the monthly payments on a larger mortgage will generally be higher than on a smaller loan at the same rate and term.

Before deciding to proceed with 5%, consider:

• Whether your income and existing commitments support the amount you want to borrow.
• Whether the property type is acceptable at the lender’s maximum LTV.
• Whether you have separate savings for legal fees, surveys and moving costs.
• Whether the monthly payment remains affordable if your circumstances change.
• Whether saving a little more could open a more suitable product.

You do not necessarily need to wait until you have 10% saved. Equally, buying as soon as you reach 5% is not always the right financial decision.

The permanent 95% Mortgage Guarantee Scheme

The UK government introduced a permanent Mortgage Guarantee Scheme in July 2025, supporting participating lenders that offer eligible 91% to 95% LTV mortgages. It is available to qualifying first-time buyers and home movers, and can support purchases with a deposit as small as 5%. The guarantee protects participating lenders against part of their losses. It is not a government guarantee that your application will be approved. Each lender still assesses income, credit history, affordability and the property. Read the official 2025 scheme guidance.

First-time buyer deposit calculator

Use this calculator to compare different deposit amounts and see an illustrative monthly mortgage repayment. The figures are estimates, not a mortgage quote or an affordability assessment.

Should you aim for a 10% or 20% deposit?

With a 10% deposit, you borrow 90% of the property’s value. With a 20% deposit, you borrow 80%. A lower LTV can mean a wider selection of products, lower borrowing and potentially lower monthly repayments.

But do not use every pound of your savings simply to reach the next LTV band. Keep enough money for the purchase costs and an emergency reserve. A lender’s product fee can sometimes outweigh a small headline-rate advantage.

Compare the total mortgage cost, not just the initial interest rate. Our mortgage calculator can help you explore illustrative repayments, while an adviser can compare actual lender products and fees.

Can you get a mortgage without a deposit?

Some specialist track record products assess rental payment history and may allow eligible applicants to borrow without a conventional cash deposit. They are not standard 95% mortgages and can involve particular conditions, such as a record of rental payments or family savings provided as additional security.

A family-supported mortgage may put a relative’s savings or property at risk if repayments are not maintained. The relative should understand the legal and financial consequences and obtain independent advice where appropriate.

A Joint Borrower Sole Proprietor mortgage may help with affordability by considering another borrower’s income, but it does not remove the deposit requirement and both borrowers remain liable for the loan.

Read about guarantor mortgages and family springboard mortgages. These arrangements are not available to everyone, and lender product criteria can change.

Can your family give you the deposit?

Yes. Many lenders consider gifted deposits, often from close family members, provided the gift meets their rules.

A lender and conveyancer may ask for:

• A signed gift letter identifying the donor, the amount and your relationship, and confirming the money is a gift that does not need to be repaid.
• Evidence of the donor’s identity and the source of the money.
• Bank statements showing the funds and how they were transferred.
• Confirmation that the donor will have no ownership interest in the property.

If the donor will live in the property, the lender may ask them to sign an occupier’s waiver. Large gifts can have inheritance tax implications under the seven-year rule, so the donor may wish to take tax advice.

Do not describe a repayable loan as a gift. Some lenders accept certain family loans, but the repayment obligation can affect affordability and eligibility. Different rules may apply to gifts from non-relatives or overseas donors.

See our gifted deposit mortgage guide for more detail.

Can you use a Lifetime ISA towards your deposit?

A Lifetime ISA (LISA) can help eligible first-time buyers save towards a qualifying home. Under the established rules, you can contribute up to £4,000 each tax year and receive a 25% government bonus, up to £1,000 annually.

Important conditions include:

• You must normally be aged 18 to 39 when opening a Lifetime ISA.
• The account must have been open for at least 12 months before a qualifying first-home withdrawal.
• The property purchase price must not exceed £450,000 under the LISA home-purchase rules.
• You must use a conveyancer and meet the other qualifying withdrawal conditions.
• Non-qualifying withdrawals generally incur a 25% withdrawal charge, which can leave you with less than you contributed.

Existing Help to Buy ISA holders can still contribute up to £200 a month until November 2029 and claim the government bonus by 1 December 2030, subject to the scheme’s rules. You cannot claim both a Help to Buy ISA bonus and a Lifetime ISA bonus towards the same home purchase. See GOV.UK Help to Buy ISA guidance.

LISA rules are not the same as mortgage lender criteria or Stamp Duty first-time buyer relief. Confirm the current requirements on GOV.UK’s Lifetime ISA guidance before relying on the bonus for your purchase.

What about Shared Ownership and other schemes?

With Shared Ownership, you buy an eligible share of a property and normally pay rent on the remaining share. Your mortgage deposit is generally calculated against the share you purchase, not the full market value.

For example, a 10% deposit on a £125,000 share is £12,500. But you also need to consider rent, service charges, eligibility restrictions and the cost of buying further shares later.

Other local discounted home ownership schemes may be relevant, subject to current availability and eligibility. The former Help to Buy equity loan scheme in England is closed to new applications. Check our government schemes guide and the relevant official scheme information before making plans.

What other costs do first-time buyers need to save for?

Your deposit is not the entire cost of buying. You may also need funds for:

• Solicitor or conveyancer fees: including searches, Land Registry charges and any leasehold-related costs.
• Survey: a lender’s valuation is for its lending decision and is not the same as an independent home survey.
• Mortgage costs: any applicable lender arrangement, valuation or broker fees, explained before you commit.
• Moving and setup costs: removals, insurance, essential repairs and furnishings.
• Property taxes: Stamp Duty Land Tax in England and Northern Ireland, Land and Buildings Transaction Tax in Scotland, or Land Transaction Tax in Wales, as applicable.

There is no single reliable fixed amount to add to every deposit. Obtain quotes for your own property and circumstances rather than relying on a generic £3,000 or £5,000 allowance.

First-time buyer Stamp Duty relief

In England and Northern Ireland, eligible first-time buyers generally pay no Stamp Duty Land Tax on the first £300,000, then 5% on the portion from £300,001 to £500,000, provided the total purchase price is £500,000 or less. If the price exceeds £500,000, first-time buyer relief does not apply.

Eligibility is subject to HMRC rules, including previous ownership and whether all purchasers qualify. Scotland and Wales have separate property transaction tax systems.

For detailed eligibility and worked examples, read what counts as a first-time buyer and use our Stamp Duty calculator as a starting point.

How do lenders check where your deposit came from?

Your mortgage lender and conveyancer will normally want to understand the source of funds. This is part of lending checks and anti-money-laundering requirements.

Deposit source	Typical lender position	Evidence to prepare
Own savings	Commonly accepted	Savings history and bank statements
Close family gift	Commonly considered, subject to criteria	Gift letter and donor source-of-funds evidence
Non-family gift	Case by case	Relationship, gift terms and funding trail
Lifetime ISA	Commonly accepted for qualifying purchases	LISA statements and conveyancer confirmation
Inheritance	Commonly accepted subject to checks	Estate documents and banking trail
Property sale proceeds	Commonly accepted subject to checks	Completion statement and banking trail
Investments or shares	Often accepted once realised and evidenced	Sale statements and transfer trail
Overseas funds	Case by case	Origin, transfer trail and supporting records
Personal loan	Often restricted or not accepted	Disclose borrowing and repayments
Credit card	Generally not accepted	Disclose borrowing and seek advice
Cryptocurrency proceeds	Highly lender-dependent	Trading, conversion and source-of-funds records

This table is indicative, not a lender-wide approval policy. Confirm current criteria before applying.

If your deposit comes from salary savings, investments, an inheritance, a property sale or a family gift, gather the relevant evidence early. Large unexplained transfers just before an application can lead to additional questions and delays.

Do not move funds between accounts simply to hide their origin. Keep a clear paper trail and tell your adviser if the deposit includes borrowed money or overseas funds.

Can you use a personal loan or credit card for your deposit?

You should not assume that you can. Many lenders do not accept a deposit funded by unsecured borrowing, and any loan repayments may reduce how much you can borrow. Credit card borrowing can also affect affordability and credit assessments.

If some of your deposit is borrowed, disclose it to your mortgage adviser and lender before applying. Never represent borrowed funds as savings.

What if you have a small deposit and a poor credit history?

Having a 5% deposit and previous missed payments can narrow your options. The outcome depends on the type, amount and age of the credit issue, whether it has been resolved, and the lender’s rules.

Check your credit reports for errors before making applications. Avoid multiple unnecessary full mortgage applications while you’re still investigating options. An Agreement in Principle may involve a soft or hard credit search, depending on the lender.

Our adverse credit mortgage guidance explains what lenders may consider.

A practical deposit checklist

Before you make an offer, check that you can answer these questions:

1. What is the agreed or likely purchase price?
2. How much of your deposit is already available, and when will the rest be accessible?
3. What LTV does that create, and will the property qualify?
4. Can you prove the source of every part of the deposit?
5. Have you allowed separately for legal fees, surveys, taxes and moving costs?
6. Are you comfortable with the mortgage payment and other household costs?
7. Have you checked lender affordability rather than relying only on an income multiple?

Our first-time buyer mortgage service can help you work through the figures before you begin viewing properties.

Which situation sounds like yours?

Mortgage criteria and scheme rules checked: October 2026. Individual lenders can change their criteria without notice.

First-time buyer deposit FAQs

Self-employed first-time buyers

Being self-employed does not automatically mean you need a larger deposit. The same loan-to-value principles apply, although lenders may assess income differently. Depending on your trading history and business structure, evidence may include accounts, SA302 tax calculations (or an accountant’s tax computation where the lender accepts it), with matching HMRC tax year overviews, and business income records. Some lenders consider applicants with one year’s accounts, subject to their individual criteria. Read our guide to getting a mortgage with one year’s accounts.

Property taxes in Scotland and Wales

In Scotland, eligible first-time buyers may qualify for LBTT first-time buyer relief, which increases the nil-rate threshold. In Wales, Land Transaction Tax applies and there is no separate first-time buyer relief. Check the official guidance for the current thresholds and your circumstances.

For the full buying journey, read our step-by-step first-time buyer mortgage guide. To avoid preventable setbacks, see first-time buyer mortgage mistakes to avoid.