Mortgage Questions, Answered

How much deposit do I need as a first-time buyer?

The short answer

Usually a minimum of 5% of the purchase price, so £12,500 on a £250,000 home. A small number of schemes allow less, but 5% is the realistic floor for most buyers. Every extra 5% you can add typically unlocks a cheaper band of rates.

Why deposit size changes your rate

Lenders price by loan-to-value (LTV). A 95% mortgage sits in the most expensive band; at 90% rates improve, and again at 85% and 75%. Over a five-year fix, the difference between 95% and 90% LTV can add up to thousands of pounds, sometimes worth waiting a few months of saving, sometimes not. It's a sum worth doing properly.

Ways to get there faster

Lifetime ISA: save up to £4,000 a year and the government adds 25% (£1,000 max per year) toward a first home up to £450,000. Watch the withdrawal penalty for non-qualifying use.
Gifted deposits: family gifts are accepted by nearly all lenders with simple paperwork, see can my parents gift me a deposit?
Low-deposit schemes: options come and go, shared ownership lets you buy a share with a 5% deposit on that share, and a few lenders run low- or no-deposit products with conditions. Ask what's live before assuming.

Don't forget the other costs

Budget beyond the deposit: solicitor fees (typically £1,000, £2,000), survey, moving costs, and stamp duty, though first-time buyers pay nothing on properties up to £300,000. Try our stamp duty calculator.

Debbie's view

"Five per cent genuinely is enough, I complete 95% mortgages every month. But show me your savings timeline and I'll tell you whether three more months of saving would drop you into a cheaper rate band. Sometimes it's worth it, often it isn't."

Quick answers

Can I buy with no deposit at all?

Occasionally - a small number of lenders offer 100% products with conditions such as a track record of rent payments, or family security. Options change frequently, so ask what's currently available.

Does my deposit affect how much I can borrow?

Borrowing is driven mainly by income and outgoings, but your deposit sets the maximum LTV - so a bigger deposit can bridge the gap when borrowing power is tight.

Is 5% enough on a new-build?

Often trickier - many lenders cap new-build flats at 85-90% LTV. Houses are usually more flexible than flats. Lender choice matters.

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