How much deposit do you need for a mortgage?
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How much deposit do you need for a mortgage? (Part 1)
Steve Murphy from Number One Mortgages discusses all you need to know about deposits. Episode one of two, recorded in December 2025.
How much deposit do I need for a mortgage? What’s the average first-time buyer deposit?
You don’t always need a deposit to get a mortgage, but it very much depends on a number of other factors. A better way to think of it is that some people won’t need a deposit for a mortgage.
Factors such as your credit history, your residency status in the UK, your level of income, the type of property you’re buying, and other factors will affect your eligibility for what’s called a 100% mortgage. If you don’t qualify for a 100% mortgage, you will need a deposit.
As far as the average goes, most first-time buyers put down somewhere between 5% and 10%, but not always.
What does a bigger house deposit mean for my LTV? What does LTV mean?
LTV means Loan to Value. It’s expressed as a percentage to explain how much you are borrowing against the property value. A bigger deposit means a lower LTV.
How much should I save and how can I save for a deposit? Do you have any top tips?
You should ideally save as much as possible for your deposit without leaving yourself short for anything essential. There’s no magic formula for this, but often your target purchase price and your level of income will determine how much you need to save for your deposit.
The deposit should bridge the gap between the purchase price and the mortgage amount you can borrow.
To save as much as possible, start by itemising what you’re spending your income on. Go through all your regular outgoings to identify anything you’re prepared to give up, or where you can reduce your expenditure.
For example, perhaps you can give up TV subscription packages that you don’t use much, and save on energy costs now that the providers are competing with each other. Try switching to a cheaper supermarket for your weekly shop, or even visiting different shops to take advantage of price differences.
Can I get a mortgage with a 0% deposit? What’s the minimum deposit for a house? Can I get a 100% mortgage?
Yes, you can get a 0% deposit or 100% mortgage – which are the same thing – but not in every situation. To qualify for one of these, you and the property you are buying would need to meet the criteria with the few lenders offering that type of mortgage.
Can you buy a house with a 5% deposit?
A 5% deposit or 95% mortgage is possible and many more providers offer these than 100% mortgages. Whether you will qualify would depend on your credit history and other factors that a lender will take into account.
Can you get a mortgage with a 10% deposit?
With a 10% deposit, a mortgage may become possible that you might not have been eligible for with a 5% deposit.
Some lenders will lend a little more with a 10% deposit, or accept someone that they wouldn’t have lent to at all with less deposit.
Will I need another deposit when moving house?
The deposit is simply the difference between the purchase price and the amount you are borrowing against it. Some of this may need to be paid in advance of completion, to secure the property, but this is still a part of your overall deposit rather than a different thing.
There will also likely be other buying costs, of course, such as solicitors’ fees, surveys, an advice fee, a lender fee and stamp duty on some properties. However, these do not constitute an additional deposit, they are buying costs.
Who do I pay my mortgage deposit to?
The mortgage deposit is usually paid initially to your solicitor, who will ultimately pass that on to the vendor of the property you’re buying.
Can my parents contribute towards my deposit? Should I borrow money from my family for a bigger deposit?
Yes, your parents can contribute towards a deposit, either as a gift or as a loan. Not many lenders will accept a deposit that is lent to you by a third party, but it is possible.
We would need to establish the terms of this family loan or gift, and if any repayments or interest are required in return. That will also be taken into account by the mortgage lender as part of their usual assessments.
Key Takeaways:
- Not everyone needs a deposit, as you may qualify for a 100% mortgage, but eligibility depends on factors like your credit history, income, and residency status.
- Most first-time buyers put down a deposit of between 5% and 10%.
- A larger deposit results in a lower Loan to Value (LTV), which is the percentage of the property value you are borrowing.
- To save for a deposit, you should try to save as much as possible by itemising and reducing your regular outgoings, such as cutting unused subscription packages or switching to a cheaper supermarket.
- Your parents can contribute towards your deposit as either a gift or a loan, but the mortgage lender will take the terms of this contribution into account during their assessment.
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How much deposit do you need for a mortgage? (Part 2)
Can I use a loan for my mortgage deposit?
Most lenders will not lend if the deposit is being borrowed from another source, but a few will. The terms of the loan will be taken into account by the lender in their mortgage assessment.
Can I use my Help to Buy ISA for my deposit?
Yes, you can still use your Help to Buy ISA, subject to the terms of the ISA itself. An example is the maximum purchase price, as there is a limit. You must be a first-time buyer and you must be buying the property to live in as opposed to let out.
Help to Buy ISAs were replaced by Lifetime ISAs, so you can’t actually start one now.
Will a bad credit score mean I need a larger deposit?
Often a bad credit score will mean you need a bigger deposit, but it will depend on what your deposit was to start with.
Some lenders often won’t lend as much to someone with a bad credit score, and bad credit could mean you don’t qualify for a mortgage at all – especially with the lenders who offer the most borrowing.
So in short, yes, you’re more likely to need a larger deposit if you’ve got a bad credit score.
Can you get a mortgage without a deposit?
Yes, it is possible to get a 100% mortgage, but not in all circumstances. The criteria are more stringent, especially around credit history. Other factors as well can be taken into account. But in principle, it is possible.
What size deposit is needed for Buy to Let mortgages?
For Buy to Let, the absolute minimum deposit is 15%. However, this is dependent on a number of other factors, mainly to do with the property that you’re buying and its rental value.
Very often, lenders will require a 20%, 25% or even 30% deposit, with rental value being the biggest reason for not qualifying with a smaller deposit. It’s the amount of rent that a property would achieve that drives how much you can borrow.
What is shared ownership and what deposit do you need for it?
With shared ownership, instead of buying all of a property, you only buy a portion. You would then pay rent on the rest of the property.
For this type of purchase, the minimum deposit would be 5% of the share you’re buying, typically. However, qualifying depends on a number of other factors and criteria being met. You’ve also got to be able to afford both the mortgage and the rent.
What is Deposit Unlock? What deposit is needed?
Deposit Unlock is a scheme set up between house builders and mortgage lenders, making it possible to get a 95% mortgage on a new build property. These would otherwise require a bigger deposit. You therefore need to have at least 5%.
How can a mortgage broker help here? Have you got anything else to add?
A mortgage broker can always help you when buying a property, by taking the legwork out of looking for a mortgage. We anticipate possible issues with your mortgage application before they arise.
It’s best to start talking to a mortgage adviser early in the process, when you’re planning your purchase. We can advise you on any precautions you could be making in the meantime to get yourself mortgage-ready.
Key Takeaways:
- Most lenders will not accept a deposit borrowed from a loan, although a few might, and they will take the loan’s terms into account.
- Help to Buy ISAs can still be used by first-time buyers for owner-occupied properties, subject to limits on the maximum purchase price, but they are no longer available to open, having been replaced by Lifetime ISAs.
- A bad credit score often increases the required deposit size and may prevent qualification for a mortgage altogether with some lenders, particularly those offering the most borrowing.
- The minimum deposit for Buy to Let mortgages is 15%, but lenders frequently require 20%, 25%, or 30%, with the property’s rental value being the main determining factor for the amount you can borrow.
- Options like Shared Ownership and Deposit Unlock make it possible to secure a mortgage with a smaller deposit.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES
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What you need to know…
The actual amount you can borrow will depend on your credit commitments, your regular monthly outgoings and how each lender assesses your income.
Lender’s affordability checks can differ meaning that the amount you can borrow may change from lender to lender. That’s where the expertise of our personal advisers comes in and where our independent status benefits you.
The minimum deposit required is 5% of the property purchase price. Most lenders will allow the deposit to come from a gift and some lenders will even consider this being raised via a personal loan. There are government incentives to help boost your savings if you are a first time buyer. Depending on your circumstance you may either need to have a larger deposit or will perhaps want to put a larger deposit down, due to preferable interest rates.
Because we are independent mortgage brokers we will be able to secure you the best deal for your circumstance.
An Agreement in Principle, also known as a ‘Decision in Principle’ will be provided after affordability and credit checks have been approved. An Agreement in Principle is extremely useful to increase your confidence when viewing and offering on properties. Estate Agents will typically want to see an Agreement in Principle before presenting your offer to the seller. Our personal advisers can help you with this.
It’s a requirement of your mortgage to have buildings insurance. This covers the bricks and mortar of the property.
It’s also a good idea to take advice from your personal adviser on protecting you and your loved ones if something bad happens. For example: Life Cover, Critical Illness Cover and Income Protection.
Being accepted for a mortgage does depend on your circumstances. We are experts with all types of mortgages…. We specialise in obtaining mortgages for the self-employed, contractors, construction industry scheme (CIS) workers and those with historic adverse credit (as well as employed people of course). In all these situations we can frequently secure high street deals. Being independent and experts is a real benefit in these circumstances.
Your monthly payments will vary depending to your chosen mortgage term, choice of mortgage product, how much deposit you have and repayment type. It is best to chat with a personal independent adviser to find out exactly what interest rate and term you can secure to give an accurate monthly payment.
Most of the first time buyers we have helped secure a mortgage are paying less on their mortgage than they used to pay on rent. This does, however, depend on circumstances. The mortgage term chosen is a major factor which can be dictated by your age and intended retirement age. Of course, it is also worth noting you are paying back the mortgage and once it is repaid you won’t have any rent to pay.
There are costs associated with purchasing your first home. You will need to pay legal fees and other potential costs include a survey fee, stamp duty (which is a property land tax) and administration fees. There are First Time Buyer government incentives on savings and stamp duty that can help you with raising the monies for a deposit, costs and reducing stamp duty. Our personal advisers can give guidance within a free consultation.