⚡ Quick Answer
The minimum deposit for most UK mortgage products is 5% of the purchase price. But 10% unlocks materially better rates, and 15-20% is better still. The rate difference between 95% and 90% LTV is typically 0.4-0.6 percentage points — on a £250,000 mortgage this saves roughly £120-£180/month. First-time buyers can boost savings via a Lifetime ISA (25% government bonus on up to £4,000/year). Don’t forget buying costs on top of the deposit: typically £3,000-£7,000 for a standard purchase.
The deposit question is more complex than “how much do I need to get a mortgage?” — the amount you save determines not just whether you can buy, but what rate you’ll pay for potentially 25 years. A few extra months of saving to reach 10% instead of 5% can save more over the mortgage term than the entire extra saving cost.
The Minimum: 5% Deposit
Most mainstream lenders offer 95% LTV mortgages — you provide 5%, they lend 95%. The government’s Mortgage Guarantee Scheme (Freedom to Buy, made permanent in 2025) helps lenders offer these products on properties up to £600,000.
At 95% LTV in mid-2026, average two-year fixed rates are approximately 5.6-5.9%. On a £237,500 mortgage over 25 years at 5.75%, monthly repayments are roughly £1,580.
10% Deposit: The First Major Improvement
Moving from 5% to 10% deposit provides the largest rate improvement per percentage point of additional saving. At 90% LTV, best two-year fixed rates are around 5.1-5.3%. On a £225,000 mortgage at 5.2% over 25 years: monthly repayment approximately £1,350 — roughly £230/month less than the 95% LTV scenario. Over a two-year fixed period, that’s £5,520 saved — significantly more than the additional £12,500 deposited.
15-20% Deposit: Accessing Genuinely Competitive Rates
The 85% LTV tier and 80% LTV tier unlock further rate improvements. Best rates at 85% LTV: around 4.7-5.0%. At 80% LTV: around 4.5-4.7%. At these levels, a £200,000 mortgage at 4.6% produces monthly repayments of approximately £1,100 — around £480/month lower than the 95% LTV example.
Beyond the Deposit: Buying Costs
The deposit isn’t the only upfront cash needed. Budget separately for:
- Stamp Duty Land Tax (SDLT) — see our dedicated guide
- Conveyancing/solicitor fees: £1,500-£2,500
- Survey: £400-£1,000 depending on type
- Mortgage arrangement fee: £0-£1,099
- Total buying costs: £3,000-£7,000 on most standard purchases
Our full guide on home buying costs beyond the purchase price covers every cost you’ll encounter.
The Lifetime ISA: Boosting Your Deposit
For first-time buyers aged 18-39, the Lifetime ISA is the most powerful deposit-saving tool. The government adds 25% to contributions of up to £4,000/year — up to £1,000 in free money annually. Over five years at maximum contributions, a single buyer receives £5,000 in government bonuses on top of their own saving.
Frequently Asked Questions
Can I use gifted money as my deposit?
Yes — gifted deposits from family are accepted by most lenders. A signed gift letter confirming the money is not a loan (no repayment required) is needed. Lenders will also want to verify the source of the funds through bank statements.
Does a larger deposit guarantee mortgage approval?
No — lenders also assess income, employment stability, and credit history. A large deposit with insufficient income or poor credit can still result in a declined application.
Current mortgage rates by LTV band are at MoneyfactsCompare mortgages, updated daily.
