The bigger the deposit you can scrape together, the more choice of mortgage deals you’ll have. But as a minimum, you’ll need 5-10% of the value of the property you’re buying.
For an average house worth £273,000, that means saving a minimum of £13,650 as a deposit. In reality, though, things aren’t always so simple. This example is based on recent UK house price averages. Actual property prices and deposit requirements vary by location, lender, and individual circumstances. This guide explains what you need to know, including the latest schemes, and gives you tips to max your savings.
Habito is a mortgage broker, not a lender. We’re authorised and regulated by the Financial Conduct Authority (FCA). We’ll explain your options and help you apply for a mortgage if you decide to go ahead.
These days, most lenders ask for a minimum deposit of 5% of the value of your property. However, many homebuyers aim closer to 10% or 20% – or sometimes even more.
In practice, the size of deposit you need will depend on:
How much interest you’re happy to pay. The bigger your deposit, the less you’ll need to borrow. And the less you borrow, the lower the interest. Many homebuyers want better rates, so they save as big a deposit as possible to achieve this. But others will be happy to pay a bit more in interest so they can put down a smaller deposit. Both are totally legit options, depending on your circumstances.
Lenders talk in terms of “loan to value” (LTV). This just means how much of the value of the property is covered by the mortgage rather than the deposit. If you pay a 20% deposit, you’re borrowing 80% of the value of the property: this means you have an “80% loan-to-value” mortgage. If you pay a 5% deposit, you’re getting a 95% LTV mortgage. A lower LTV usually means lower interest payments, and that means paying less for your property in the long run.
How much you earn. Generally, the less you earn, the less you can borrow. And if you can’t borrow as much as you’d like, you’ll either need a bigger deposit to bridge the gap, or you’ll need to find a cheaper property. Lenders tend to cap the amount you can borrow at 4.5 times your annual income (although a few lenders have offered deals stretching up to six times the borrower’s salary).
Say you earn £30,000 a year. The cap means you’ll probably only be able to borrow £135,000. So if your dream house is £200,000, you’d need a £65,000 deposit.
Whether you’re buying a property to live in or to let. Buy-to-let and residential mortgages need different deposits. Buy-to-let mortgages sometimes need as much as 40% as a down payment.
Where in the UK you’re looking to buy. The amount of deposit you’ll need differs by region, since house prices vary so much. In some places, you’ll need to save much less, while in others, such as London, you’ll need more.
A smaller deposit can help you buy sooner. It usually means higher interest rates and bigger monthly repayments. And if house prices fall, putting down a low deposit can increase the risk of negative equity — where your home is worth less than the amount you owe.
The latest industry figures show what deposit first-time buyers were paying in 2025, on average, in different parts of the UK.
These figures are based on the latest available UK mortgage market data for first-time buyers in 2025. Individual deposit sizes vary depending on lender criteria and property prices.
Will Rhind, a mortgage expert at Habito, says: “As a first-time buyer, you get several benefits. One of them is a free top-up for your deposit from the government, thanks to a special savings account, the lifetime ISA.
“You can open a lifetime ISA any time between the ages of 18 and 39 and use the money in it towards a deposit for your first home.
“Each year until you turn 50, you can put up to £4,000 a year into this ISA and the government will add 25%. That means you could get a £1,000 bonus every year. And because it’s an ISA, there’s no tax to pay on the interest you earn.
“Money you put into this ISA counts towards your annual ISA limit, and there are some other rules to know.”
Find out more about this and other perks in our guide to first-time buyer benefits.
In July 2025, the UK government launched a permanent Mortgage Guarantee Scheme to get mortgage lenders to offer more mortgages with a lower deposit. This replaced a previous scheme which had just finished.
The aim is to get more people onto the property ladder by making more deals available for those with a deposit of 5% to 9%.
Lenders who participate get a government-backed guarantee which insures them against some of their potential losses if you default on the loan and the property is sold for less than the amount you owed the lender.
Ah, the fabled no deposit mortgage. These do indeed exist – but they’re not that common at all. They’re also known as 100% mortgages, or 0% deposit mortgages. These are mortgages that require no deposit at all. In other words, you borrow the whole value of the property as your mortgage.
Most of the no deposit mortgages on the market tend to be guarantor mortgages.
With a guarantor mortgage, someone – usually a family member – offers their property or savings as security on your mortgage. This often means they’ll need to put a portion of the value of the property in a special savings account, which lenders can access if you don’t cover payments.
Be aware that interest rates are usually high on no-deposit mortgages. And if the property value drops, without you having made any payments towards the property through a deposit, you might find yourself with negative equity – which is when your property is worth less than the amount you owe on your mortgage. This can make it tough to remortgage, and if you sell with negative equity on a guarantor mortgage, your guarantor will have to make up the difference for the lender.
If you can’t keep up repayments, your guarantor could be financially responsible, and may lose some or all of the money or property they’ve put forward as security.
For a buy to let mortgage, many lenders want to see a deposit of at least 20% to 25%. And in some cases, it’s as high as 40%. However, like other types of mortgage, the bigger the deposit, the better the interest rate.
Lenders tend to ask for a larger deposit for a buy to let mortgages for two reasons:
They’re not covered by the same regulations. Buy to let mortgages are technically investment loans, rather than consumer loans. That means lenders have much more freedom to set the conditions of the deal. Most buy-to-let mortgages are not regulated by the Financial Conduct Authority.
Buy to let mortgages are a bit riskier. Essentially, you’ll be relying on having tenants. This means that more variables outside your control could affect your ability to pay your mortgage, like your tenants failing to pay rent, or the property sitting empty.
At Habito, we’ll help you make sense of what mortgage could work for your circumstances. We compare thousands of deals from over 90 UK lenders, giving you a wide view of what’s available — though not every mortgage on the market.
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