Securing a mortgage deposit is one of the main struggles most buyers face. We’ll help you figure out how much you need, how it impacts the rates available to you and how you pay it.

It doesn’t matter whether you’re a previous homeowner, first-time buyer or commercial property investor – if you’re buying a new property with a new mortgage, you’ll probably need to put down a deposit.

How Much Deposit Will You Need?

The amount you’ll have to pay in deposit depends on the value you’re borrowing and the mortgage product you’ve selected.

Your deposit is normally worked out as a percentage of the value of the property you want to purchase. The maximum mortgage you can take out is 95%, which means you have to provide at least a 5% deposit. However, a lot of lenders will ask for a deposit of 10% or more. There are options to reduce the deposit you need – you can find more information on this below.

It’s worth trying to contribute as much in deposit as you can. A large deposit makes you appear less risky to lenders. This not only increases your chances of being accepted for a mortgage, but it also gives you access to better rates. Furthermore, you borrow less, which means your monthly repayments will be lower and you’ll accrue less interest.  

To work out how much you will need to save each month to reach your deposit amount, try our calculator below. This calculator assumes that you are a basic rate taxpayer and your payments are made at the beginning of each month.

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You will need to save
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This calculator is for illustrative purposes and you should check the progress of your savings and review it regularly to ensure you are on track to reach your amount by the target date.

What’s the Average House Deposit?

How much you need to save for a house will greatly depend on where you buy your property. Properties in London, South East England and South West England come with much more intimidating price tags than those in Northern England and the Midlands. The higher the property value, the more you’ll likely pay in deposit.

Average Deposit for First-Time Buyers

The average deposit for first-time buyers in 2021 was £53,935 according to Statista. In Greater London, the most expensive region, the deposit amount was more than double. That’s pretty expensive.

A 20% deposit needs be a lot bigger in London and around the South East nowadays, thanks to the shocking increase in property value. The North, Scotland, Northern Ireland and Wales have remained stable or even seen slight decreases, making them much more affordable areas for those struggling to save a deposit.

It can still take years to save this kind of money though and it’s near enough impossible for some people. Thankfully, there are some options available that can reduce how much deposit you need.

Reduce How Much Deposit You Need for a Mortgage

Some lenders will offer you a 95% mortgage if your parents put up their own property as security in addition to the property you’re buying. This means you’ll only need to save a 5% deposit.

Your parents can also give you your deposit as a gift or loan. But beware: if they lend you your deposit rather than gift it and you have to pay it back, it could affect your mortgage eligibility as most lenders only accept true gifted deposits.

The government also offer multiple Help to Buy schemes which aim to help first-time buyers and previous owners struggling to save enough for a deposit on a house or flat.

Find out more about the government’s schemes in our Help to Buy guide.

Deposit Needed for a Buy-to-Let Mortgage

Buy-to-let properties are slightly riskier investments for lenders, which is why their rates are higher and they often require a larger minimum deposit - usually at least 25% - 40% of the property value.


  • You want to purchase a property for: £300,000
  • You take out a 75% buy-to-let mortgage for: £300,000
  • The deposit required is: 25%
  • You pay 25% of £300,000 in deposit = £75,000
  • The lender lends you: £225,000
  • You purchase the property for: £300,000

When Do You Pay Your Deposit?

You normally pay your deposit to your solicitor 1 or 2 days before the exchange of contracts.  The solicitor will hold on to that deposit until completion, at which point the mortgage money comes through and is added to the deposit money to make up the full sale price of the property. The solicitor will then pass this all to the vendor’s solicitor to complete the sale.  There’s usually a gap between the exchange of contracts and completion of a week or 2. This is sometimes longer, e.g. when buying a new build property. If your whole deposit is coming from the sale of your previous property, then your solicitor will usually make alternative arrangements.

What’s a Holding Deposit?

You may be required to pay a holding deposit on your new home. This is different from your mortgage deposit. A holding deposit shows the buyer you’re serious about purchasing their property and prevents them from selling their property to someone else. It’s typically between £500 - £1,000, but it’s ultimately up to the seller and their solicitor to set the amount. They decide on an appropriate level which is affordable but enough to discourage either party from withdrawing from the transaction.

House deposit

How to Save for a House Deposit

In the UK, we’re lucky because we have a lot of different options that make saving for a mortgage a little easier.

Some ways to save for your first home include:

  • Returning to your parents’ home to reduce rent costs

Moving back in with Mum and Dad is rarely anyone’s first choice, but it can be an effective way to save up for a house. Any rent you pay will likely be cheaper than what you were paying on your own place. Just remember that you won’t be living there forever!

  • Ask the Bank of Mum and Dad

Most first-time buyers need a little financial support from their parents and a lot of lenders are unfazed by parental donations – but not all of them. Some lenders are less inclined to accept parental gifts. This is because they need to be sure the gift is, in fact, a gift. Not all parents can – or want to – make a true gift, so they may loan you the deposit. Be certain what it means when your parents give you money towards your new home as it may affect the mortgages available to you. For, if you’re gifted a loan, you’ll have to pay it back at some point, which could impact your ability to meet mortgage repayments later on. Nonetheless, loans can still be extremely useful to the first-time buyer. There are a few lenders who offer products where the gifted loan amount has to be deposited into a savings account for a few years - until the property increases in value sufficiently for the money to be released back to the donor. Barclays and Lloyds are 2 of the biggest names who offer this kind of product, nonetheless it’s smart to speak to a broker as they can find you the best deals. 

  • Help to Buy Equity Loan

Another way you can save money for a house is with the Help to Buy Equity Loan. It’s a government scheme whereby the government helps you purchase a newly built home by lending you a percentage of its value. You could receive up to 20% for a property outside of London and up to 40% for a property inside London. You don’t need to be a first-time buyer to receive the Help to Buy Equity Loan, but you can only use it to purchase a newly built home valued at up to £600,000. This means the maximum you can receive in loan is £120,000 outside of London and £240,000 in London. The Help to Buy Equity Loan is useful if you need help saving a deposit, as you can use the loan to make up the difference, e.g. if you need a 25% deposit and a 75% mortgage, you’d only really need to save a 5% deposit as you could use the 20% loan to make up the rest.

For a better idea of how much you need to save for a house or flat, use our free tool to compare the best mortgage rates for first-time buyers. You can also enquire now or speak to an adviser on 0330 433 2927.


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