How Much Deposit Do You Actually Need?

Every first time buyer hears the same thing from family, friends, and every property website going: "You need a 10% deposit."

It's not wrong. But it's not the full picture either.

The truth is, deposit requirements vary a lot depending on your situation, the lender you go with, the type of property you're buying, and what's happening in the mortgage market at the time. Let's clear this up properly.

The minimum is actually 5%

Most lenders will accept a 5% deposit. That means on a £250,000 home, you'd need £12,500. Not the £25,000 you've probably been told.

That said, 5% mortgages come with higher interest rates. You're a higher risk to the lender — lower deposit means higher loan-to-value (LTV) — so they'll charge more for it. You'll also pay a higher monthly amount over the life of the loan.

It doesn't mean you shouldn't do it. It means you need to go in with your eyes open.

The 10% benchmark — why it still matters

When you cross from 95% LTV to 90% LTV (i.e., a 10% deposit), the range of lenders available to you gets noticeably bigger and the rates get noticeably better. Not by a huge amount, but enough that it makes a real difference to your monthly repayments and the total you pay over the full term.

If you're close to 10%, it's usually worth waiting a bit longer and saving that extra bit. But if you've been trying to save for four years and prices have gone up £30,000 in that time, that calculation changes.

What about the government schemes?

The Mortgage Guarantee Scheme (the successor to Help to Buy) has come and gone in various forms. The 95% mortgage market in the UK is actually fairly healthy right now without government intervention — most major lenders offer their own low-deposit products directly.

Shared Ownership is still very much alive and is worth considering if you're in a higher-cost area. You buy a percentage of the property (often 25–75%) and pay rent on the rest. Your deposit is calculated on your share only, so the actual cash amount you need can be significantly lower.

It's not for everyone. There are service charges, restrictions on what you can do to the property, and the staircasing process to buy more shares has its own complications. But for some people, it's the most realistic route into homeownership.

Does it matter where the deposit comes from?

Yes. Lenders want to see that the deposit is genuinely yours (or a gift from family). If you've borrowed the money — from a personal loan, credit card, or any other source — they'll count that debt against you in their affordability assessment.

Gifted deposits are very common, especially from parents. Lenders will ask for a signed letter from whoever gave the money confirming it's a gift, not a loan. This is straightforward — we help clients do this all the time.

New builds are a different story

If you're buying a new build property, many lenders actually require a higher minimum deposit — typically 10–15%, sometimes more. There are a few reasons for this, but mainly it comes down to how new builds are valued and the perceived risk of the property losing value immediately after purchase.

This isn't a dealbreaker, but it does mean you need to factor it in if new builds are on your list.

The honest sum-up

You can technically buy with a 5% deposit. A 10% deposit opens significantly more doors. A 15–20% deposit gets you into the really competitive rates.

But deposit size is just one piece. Your income, credit history, employment type, and the property itself all play a role in what lenders will offer you. A conversation with a broker — even at the early stages — can give you a much clearer sense of where you actually stand, rather than trying to reverse-engineer it yourself from comparison websites.

We offer free initial consultations. No obligation, no jargon. Just a straight answer about what your options look like right now.