For most UK residential mortgages the minimum deposit is 5% of the property's value. But the minimum and the sensible amount are different questions — what you put down decides the interest rate you are offered, and the difference between a 5% and a 10% deposit is usually worth far more than the extra cash you hand over.
This guide covers how much you need, the loan-to-value thresholds that actually change your rate, what first-time buyers really put down, and how to build a deposit faster. It reflects the market as things stand in 2026.
Most lenders will accept 5% of the property's value. On a £300,000 home that is £15,000. These are 95% loan-to-value (LTV) mortgages, they are widely available, and they are a perfectly legitimate route onto the ladder — lenders compete hard for first-time buyer business.
The trade-off is the rate. A 95% LTV mortgage is priced higher than a lower-LTV product, so your monthly payment is larger for the same borrowing.
An example. On a £250,000 property, a 5% deposit is £12,500 and you borrow £237,500. Stepping up to a 10% deposit — £25,000 — cuts the borrowing and moves you into a better rate band. That second £12,500 typically pays for itself many times over across the life of the deal.
Lenders price in bands rather than on a sliding scale. Crossing a threshold unlocks a new tier of rates; getting close to one without crossing it achieves nothing. The bands that count are 95%, 90%, 85%, 75% and 60%.
On a £250,000 property:
If you are £1,000 short of a threshold, that is worth knowing before you make an offer rather than after. It is one of the most common and most easily avoided ways to pay more than you need to.
The 60% LTV band carries the very best rates lenders offer. Most buyers will not reach it on a first purchase, but it is a useful target to hold in mind for a future remortgage.
According to Halifax, the average first-time buyer deposit in 2024 was £61,090 — around 20% of an average first home costing £311,034. In London the average deposit was £124,688. These remain the most recent published figures.
That average is a long way above the 5% minimum, and it is worth understanding why: it reflects both buyers reaching for better rates and the reality of house prices. It is a benchmark, not a requirement. Plenty of people buy with considerably less.
A small number of 100% LTV products have reappeared. Melton Building Society launched one in early 2026 which is now available nationwide — only through mortgage brokers, and subject to strict manual underwriting rather than an automated decision.
Guarantor mortgages are the other route: a close family member uses their own property or savings as security, which can let you borrow without a cash deposit of your own.
Both carry more risk and are assessed far more carefully than a standard application. They are not a shortcut, but for the right borrower in the right circumstances they exist. Because the 100% products are broker-only, you will not find them by walking into a bank.
If you are buying an investment property rather than a home to live in, expect to need at least 25%, and realistically 30–40% to reach competitive rates. Lenders treat rental property as higher risk, and that shows up in both the deposit required and the rate.
Most buy-to-let lending is not regulated by the Financial Conduct Authority, and we will tell you clearly when that applies to your case.
Work out the deposit for the LTV band you are aiming at, in the area you actually want to buy — then add a buffer for the costs that catch people out: solicitor fees, survey, stamp duty if it applies to you, and moving. A deposit that leaves nothing for those is not a finished deposit.
The Lifetime ISA is the most effective savings tool available to most first-time buyers. The government adds £1 for every £4 you save — up to £4,000 a year, so a bonus of up to £1,000 a year.
The conditions matter:
A new First Time Buyer ISA will replace the Lifetime ISA for new savers from 6 April 2029. Existing Lifetime ISAs will continue.
A standing order out of your current account on payday, into savings, before you have the chance to spend it. Unglamorous and more effective than almost anything else.
Cutting subscriptions and takeaways helps, but rent, car finance and insurance are usually where the real money is. One renegotiated contract can beat a year of small economies.
Most lenders accept gifted deposits, and for many buyers this is what makes the purchase possible. It needs documenting properly: a letter from the giver confirming it is a gift rather than a loan, that they retain no interest in the property, and evidence of where the money came from for anti-money laundering checks.
Get this right at the start. A gifted deposit discovered late, or documented badly, is a common cause of delay close to exchange.
Our first-time buyer page sets out all of these alongside the rest of the process.
How long does it take to save a deposit?
It depends entirely on your income, your outgoings and the deposit you are aiming at. Several years is common. The more useful question is which LTV band you are targeting, because that gives you a number to work towards rather than an open-ended goal.
Can I buy with no deposit at all?
Rarely, but it is possible — through a guarantor mortgage, or one of the small number of 100% LTV products, which are only available through brokers and are underwritten manually.
What is a gifted deposit?
Money given to you, usually by family, towards your deposit. Lenders need a letter confirming it is a gift rather than a loan, that the giver retains no stake in the property, and evidence of the source of the funds.
Is a bigger deposit always better?
Usually, but not always. A bigger deposit means a lower rate and smaller payments. But emptying your savings entirely to reach a threshold leaves you with no cushion for the costs of moving or anything unexpected — and spending another two years saving while prices move is not automatically the better outcome either. It is a balance worth talking through.
Does the deposit have to be mine?
It has to be yours by the time you buy. Gifted deposits are fine. Borrowed deposits generally are not — a loan taken out to fund a deposit affects your affordability and lenders will ask.
How much deposit do I need for a buy-to-let?
At least 25%, and 30–40% to access the better rates.
The right deposit depends on what you can borrow, what you are buying and how long you plan to stay. Our borrowing calculator gives you a rough figure in a couple of minutes, which together with your deposit tells you the price range you are actually shopping in.
We are an independent, whole-of-market mortgage broker at Beehive Works in Sheffield, authorised and regulated by the Financial Conduct Authority (FRN 650114). We will tell you which LTV band is realistic for you, whether pushing for the next one is worth the wait, and which lenders suit your circumstances. You can read more about our Sheffield mortgage advice.
Your initial consultations and discussions with your adviser are free, and our fees are set out in full before you commit to anything.
Call 0114 303 1031, email info@friendscapital.co.uk, or get in touch through the website.
Last updated 29 October 2026. Your home may be repossessed if you do not keep up repayments on your mortgage.
