5% vs 10% Deposit: What’s the Real Difference?

Okay, decision time.
Do you buy now with 5% down? Or grind it out and save for 10%?
Both are on the table for first-time buyers. But they lead to pretty different places —
different borrowing, different LTV, different mortgage deals, maybe even a different rate.
So which one’s right for you? Let’s actually look at the numbers.

What does 5% down actually mean?

You put in 5% of the price. The bank covers the other 95%.
That’s what people call a 95% LTV mortgage.
Example, £200,000 house:
Price: £200,000
Your 5%: £10,000
Mortgage: £190,000
LTV: 95%

What does 10% down mean?

Same idea, just doubled up. You put in 10%, bank covers 90%.
Same £200,000 house:
Price: £200,000
Your 10%: £20,000
Mortgage: £180,000
LTV: 90%
So you’d need to find another £10,000 in savings. But in return, your mortgage shrinks by
£10,000 too.

Let’s see it across different price points

Property Price 5% Deposit 10% Deposit Extra Cash Needed
£150,000 £7,500 £15,000 £7,500
£200,000 £10,000 £20,000 £10,000
£250,000 £12,500 £25,000 £12,500
£300,000 £15,000 £30,000 £15,000
£350,000 £17,500 £35,000 £17,500
£400,000 £20,000 £40,000 £20,000

See the pattern? The pricier the house, the bigger the gap between 5% and 10%.

Why go with 5%?

One word: speed.
You get on the ladder sooner.
Saving that extra 5%? That can take a while. Say you’re eyeing a £300,000 place. The gap
between 5% and 10% is £15,000.
If saving that takes you two more years, that’s two years of not owning a home.
For a lot of people, 5% down means buying now instead of buying eventually.

What’s the catch with 5% down?

A few things to weigh up.
You’re borrowing more.
£250,000 house, 5% down? You need a £237,500 mortgage.
Same house, 10% down? Just £225,000.
That’s £12,500 less debt, straight away.
Rates might not be as good.
Mortgages are grouped into LTV bands. A 90% LTV mortgage can have different products,
different rates, than a 95% LTV one.
Doesn’t automatically mean 90% is better. But it’s worth comparing when you’re actually
ready to buy.
You start with less equity.
Equity is basically: house value minus what you owe.
Bigger deposit, bigger equity from day one.
Why’s that matter? Because house prices can drop as well as rise. Less equity means less of
a buffer if that happens.

What’s the upside of going 10%?

Moving from 95% to 90% LTV brings a few wins:
You borrow less
You start with more equity
Possibly more mortgage products to choose from
Possibly better rates
Possibly lower monthly payments (though that depends on your actual rate and term)

Should I throw every penny at the deposit though?

Hold on — no. Slow down.
Say you’ve got £22,000 saved and you’re eyeing a £200,000 house.
Technically, £20,000 gets you a 10% deposit. But that leaves just £2,000 for everything
else.
And “everything else” is a real list:
Solicitor and conveyancing costs
Survey costs
Mortgage fees
Moving costs
Furniture
Repairs
Insurance
Other buying costs
Emergency savings
Sometimes putting down £15,000 and keeping £7,000 back leaves you in a much better
spot than maxing out the deposit and having nothing left.
There’s no universal right answer here. It’s about your situation.

Is it worth just… waiting for 10%?

This is really the question, isn’t it.
Ask yourself:
How long would the extra 5% actually take to save? Two months feels totally different
from two years.
What mortgages are actually available at 95% vs 90%? Don’t guess. Check the real
market when you’re ready.
What would the monthly payments look like, realistically? Run the actual numbers, not
vibes.
Would hitting 10% wipe out my savings entirely? Owning a home with zero safety net is
risky. Boilers break. Roofs leak.
How badly do I want to buy right now? Your life circumstances count too. Not everything
is a spreadsheet decision.

Could I go even higher than 10%?

Sure, nothing stops you.
15%, 20%, even 25% down moves you into even lower LTV bands, which can mean even
more mortgage choice.
But there’s a limit to this logic. You can’t save forever chasing an ever-bigger deposit.
The goal isn’t “biggest deposit possible.” It’s finding the sweet spot between:
Deposit + what you can actually afford + buying costs + emergency savings.

5% vs 10%: the quick comparison

5% Deposit 10% Deposit
Typical LTV 95% 90%
Cash needed upfront Lower Higher
Mortgage required Higher Lower
Starting equity Lower Higher
Product choice Possibly more limited Possibly wider
Time to save Possibly shorter Possibly longer
Savings left over Possibly more Depends how much you use

Quick-fire FAQs

Can a first-time buyer actually get a 5% deposit mortgage? Yes, 95% LTV mortgages exist for eligible buyers. Depends on the lender, the property, and what’s available at the time.

Will 10% down get me a better rate? Often, but not guaranteed. Different LTV bands have different products. Always compare what’s actually on offer when you’re buying.

Is 10% “enough” for a first-time buyer? It generally means borrowing around 90% of the property value. Whether that’s “enough” depends entirely on your affordability and situation.

Should I just wait until I’ve got 10%? Not automatically. Weigh the extra saving time against your options, your monthly payment, your plans, and how much cushion you’d have left.

The bottom line

5% down can get you moving faster. 10% down means less debt and possibly better deals.
Neither is automatically “right.”
What actually matters:
How much will I be borrowing?
What’s the monthly cost?
How long will the extra saving actually take?
What will I have left once I’ve bought?
Answer those honestly, and you’ll know which one’s right for you — no guesswork needed.

This is general info, not personal financial advice. Lending criteria, rates and product availability change and vary between lenders and individual circumstances. Your home may be repossessed if you don’t keep up mortgage repayments.