How Much Deposit for First Time Buyers UK? (2025)

UK first-time buyers can typically get a mortgage with a minimum 5% deposit (95% LTV), with most lenders offering accessible deals at 10% deposit (90% LTV). Lower LTV unlocks better interest rates: pricing cliffs sit at 95%, 90%, 85%, 80%, 75% and 60% LTV. For a £300,000 property, a 5% deposit is £15,000 and a 10% deposit is £30,000 — but the mortgage rate at 10% is often 0.5–1% lower, saving hundreds per month and tens of thousands over a 25-year term.

This is the full deposit landscape for first-time buyers in 2026/27.

The minimum: 5% deposit (95% LTV)

The UK’s 95% LTV mortgage market exists, supported partly by the government’s Mortgage Guarantee Scheme (which underwrites a portion of risk for participating lenders).

Available with:

• Halifax, NatWest, Barclays, HSBC, Nationwide and others (subject to changing criteria).
• Maximum property value usually £600,000 (the Mortgage Guarantee Scheme cap).
• Standard mortgage criteria — affordability, credit checks, income verification.

The trade-offs:

• Higher interest rate: typically 0.5–1.5% higher than 75% LTV equivalents.
• More restrictive criteria: lenders look more carefully at affordability, employment stability, and credit profile.
• Limited product range: fewer deals available than at lower LTVs.
• Property must meet lender criteria — some flats with cladding issues, ex-local-authority properties or new builds may be excluded.

For a £300,000 property with a 95% LTV deal at (say) 5.5% over 30 years:

• Deposit: £15,000.
• Mortgage: £285,000.
• Monthly payment: ~£1,618.

10% deposit (90% LTV) — the sweet spot for many

A 10% deposit opens up much more of the mortgage market.

For a £300,000 property:

• Deposit: £30,000.
• Mortgage: £270,000.
• Monthly payment at 4.5% over 30 years: ~£1,369.

The savings vs the 5% deposit case (assuming 5.5% rate there):

• Monthly: £249 less.
• Annually: £2,988 less.
• Over 5 years: £14,940 less.
• Over 25 years: £74,700+ less in interest.

Plus the lower LTV opens up more lender choice and competitive rates.

15% deposit (85% LTV) — wider lender pool

A 15% deposit doesn’t dramatically improve rates over 10%, but opens up:

• Specialist lenders who don’t do high-LTV business.
• Slightly lower rate margins.
• Easier affordability assessments.

For a £300,000 property:

• Deposit: £45,000.
• Mortgage: £255,000.
• Monthly payment at 4.3% over 30 years: ~£1,261.

25% deposit (75% LTV) — significantly better rates

The 75% LTV band is where some of the most competitive UK mortgage rates sit.

For a £300,000 property:

• Deposit: £75,000.
• Mortgage: £225,000.
• Monthly payment at 4.0% over 30 years: ~£1,074.

The combination of lower LTV and lower interest rate makes this band attractive — though obviously requires £75,000+ in deposit, which is hard for many first-time buyers.

40% deposit (60% LTV) — best rates

The 60% LTV market is where the lowest UK mortgage rates appear. Below this LTV, rates don’t typically improve further.

For a £300,000 property:

• Deposit: £120,000.
• Mortgage: £180,000.
• Monthly payment at 3.8% over 30 years: ~£838.

Few first-time buyers reach this deposit level — but it’s common for movers or second-time buyers using equity from a previous sale.

Where does the deposit come from?

UK lenders accept deposits from a few sources:

Your own savings

The default. UK savings accounts, ISAs, cash holdings — all accepted with bank statements showing the funds and an explanation of how they were built up.

For larger deposits (over £20,000–£50,000), lenders may ask for source-of-funds documentation — payslips showing salary deposits, savings statements showing accumulation over time.

Gifted deposit from family

Common in the UK. A parent or relative gives you the deposit; you don’t need to repay it.

Lender requirements:

• A signed gifted deposit letter from the giver, confirming it’s a gift, not a loan, and they have no claim on the property.
• Source of the gifted funds (the giver’s bank statements) may be requested.
• The giver has no legal interest in the property.

If the gift is in fact a loan, the lender needs to know — it affects your affordability calculation and can change the lending decision.

Lifetime ISA proceeds

If you have a Lifetime ISA, the proceeds (including the 25% government bonus) can be used toward the deposit, provided you meet the LISA criteria (first-time buyer, property under £450k, LISA open 12+ months).

The conveyancer requests funds directly from the LISA provider when the purchase reaches exchange. See our LISA over £450k guide for the property cap implications.

Help to Buy ISA (closed to new applicants)

If you opened a Help to Buy ISA before December 2019, you can still claim the 25% government bonus on the savings (up to £3,000) when you buy your first home. The scheme is closed to new openings but existing savers can use it.

Equity from a previous property

For movers, equity from selling your existing home becomes the deposit on the next. The conveyancer manages this in the chain.

Family loans treated as deposit

If a family member is lending you the deposit (not gifting), most lenders treat the loan as debt against your income for affordability purposes. This reduces your borrowing capacity. Some lenders won’t accept loaned deposits at all.

What about additional costs beyond the deposit?

The deposit is just the largest single cost. First-time buyers also need:

• Stamp Duty Land Tax (SDLT) — first-time buyer relief: 0% to £300,000, 5% on £300,000–£500,000, no relief above £500,000.
• Conveyancing / solicitor fees: £700–£2,000.
• Survey fees: £300–£1,200 depending on detail.
• Mortgage arrangement / product fees: £0–£1,500.
• Removal costs: £300–£2,000+.
• Initial home costs: appliances, furniture, repairs — highly variable.

A general guideline: budget 5%–10% of the property price for these costs on top of your deposit.

For a £300,000 first-time purchase:

• Deposit (10%): £30,000.
• SDLT: £0 (within FTB relief threshold).
• Other costs: ~£3,000–£8,000.
• Total upfront: £33,000–£38,000.

How to build a deposit faster

A few common strategies:

• Use the Lifetime ISA: 25% government bonus on contributions up to £4,000/year (max £1,000 bonus).
• Cash ISA for the rest: tax-free interest, no risk.
• Cut discretionary spending: identify the £5,000–£10,000/year of subscriptions, dining and impulse purchases that could redirect to savings.
• Side income: freelance, contracting, gig work to accelerate the savings rate.
• Live with family: temporarily reducing rent by living with parents or housemates can dramatically accelerate savings.

A typical UK first-time buyer journey: 3–7 years of saving to build a 10% deposit on a modestly-priced home. With the LISA bonus, faster.

Internal links

• How much can I borrow on my salary UK?
• What credit score do I need for a mortgage UK?
• What fees do I pay when buying a house UK?

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This guide is information, not regulated financial advice. UK mortgages are regulated by the FCA — speak to a regulated mortgage adviser before applying.