How Much Deposit Do You Actually Need?

Let’s talk money. Specifically, the number that keeps first-time buyers up at night.
The deposit.
You’ve seen the ads. “Buy with just 5% down!” Sounds great. But is that actually the right
move for you?
Let’s figure it out together.

What even is a deposit?

Simple. It’s the chunk of the house price you’re paying yourself, not borrowing.
Buying a £200,000 place? Here’s how it breaks down:
5% deposit = £10,000 you pay, £190,000 you borrow
10% deposit = £20,000 you pay, £180,000 you borrow
15% deposit = £30,000 you pay, £170,000 you borrow
Bigger deposit, smaller mortgage. That’s the whole game.

What’s this “LTV” thing?

Loan-to-Value. Sounds fancy. It’s not.
It’s just your mortgage as a percentage of the house price.
For a £200,000 house:
Deposit Mortgage LTV
£10,000 (5%) £190,000 95%
£20,000 (10%) £180,000 90%
£30,000 (15%) £170,000 85%
£40,000 (20%) £160,000 80%
£50,000 (25%) £150,000 75%
Why care? Because mortgage deals are usually grouped by LTV band. Lower LTV, generally
more options.

Can I really buy with just 5% down?

Sometimes, yes. There are products out there for it.
5% down means you’re at roughly 95% LTV. Here’s what that looks like in real numbers:
£150,000 house → £7,500 deposit
£200,000 house → £10,000 deposit
£250,000 house → £12,500 deposit
£300,000 house → £15,000 deposit
But just because you CAN buy with 5% doesn’t mean it’s automatically your best option.

Is 10% better than 5%?

Often, yeah.
Going from 5% to 10% moves you from roughly 95% LTV down to 90% LTV.
That can unlock more mortgage products. Sometimes better rates too.
You’re also just borrowing less overall. Simple math, good outcome.
But don’t drain your entire savings account just to hit that 10% mark. Look at your whole
picture first.

Should I aim even higher? 15%? 20%?

If you can comfortably get there, sure, lower LTV bands can open up more doors.
But here’s the trap: you could spend years chasing an ever-bigger deposit while house
prices move and your life plans change.
The real question isn’t:
“What’s the biggest deposit I can possibly scrape together?”
It’s:
“What deposit gets me a solid mortgage AND leaves me enough cash for everything else?”

Don’t forget: buying costs money beyond the deposit

Huge one. Pay attention here.
Got £20,000 saved? Don’t assume that’s your full deposit.
You’ll likely also need cash for:
Solicitor and conveyancing fees
Property searches
Survey costs
Mortgage fees
Property tax, where it applies
Moving costs
Quick repairs when you move in
Furniture and appliances
Insurance
An emergency cushion
These add up fast. Budget for the whole move, not just the deposit line.

Can my parents just give me the deposit?

Yes, this happens a lot. It’s called a gifted deposit.
But lenders want to know where that money came from. The person gifting it usually has to
confirm:
It’s genuinely a gift, not a secret loan
They’re not getting a stake in your house because of it
Your solicitor will also want proof of where the money’s from. So don’t shuffle money around
randomly — keep a clean paper trail.

What about borrowing my deposit instead?

Different story entirely. A borrowed deposit isn’t the same as a gifted one. Some lenders won’t accept it at all. Others have specific rules. If your deposit isn’t 100% your own savings, sort this out early. Don’t leave it as a surprise mid-application.

Can I use my Lifetime ISA?

Potentially, yes, if you’re eligible and buying an eligible first home.
But the rules change, and there are limits — property price caps, withdrawal conditions,
timing rules. Check the current government rules before you count on it.

Where does the money physically need to be?

You’ll need to prove where your deposit came from. Bank statements, paperwork, the works. So keep your deposit savings tidy and traceable. Future-you will thank present-you.

What if house prices move while I’m saving?

Annoying reality: they will.
If the type of property you want gets more expensive, the cash needed for your target
percentage goes up too.
So instead of a fixed number like “I need £20,000,” think in terms of:
Target house price + deposit percentage + buying costs + emergency cushion
That’s a moving, realistic target. Not a random number stuck in your head.

So… how much should I actually save?

No single magic number. Here’s the process instead: 1. Estimate roughly what house you’re aiming for 2. Work out what 5%, 10% and 15% look like in cash 3. See what mortgage options exist at each level 4. Add up your buying costs 5. Decide how much cash you want left over after moving in Do that, and you’ve got a real target. Not a guess.

Quick-fire FAQs

What’s 5% of £250,000? £12,500.
What’s 10% of £250,000? £25,000.

Can I use all my savings as my deposit? You could. But remember buying and owning a home costs extra. Keep something back for fees and emergencies.

Does a bigger deposit mean a cheaper mortgage? Usually opens better options and rates. Not guaranteed though — always compare the full cost, not just the headline rate.

Is 10% a good target for a first-time buyer? Often, yes. Roughly 90% LTV, and a solid middle ground for a lot of buyers. But it depends on you.

The real takeaway

Don’t just chase the smallest possible deposit.
Think about all four pieces together:
Deposit + what you can afford + buying costs + emergency savings.
Nail all four, and you’ll walk into this way more prepared than most first-time buyers.

This is general info, not personal financial advice. Lending criteria vary by lender and by person. Your home may be repossessed if you don’t keep up mortgage repayments.

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