How much do I need to save for a mortgage deposit? (First-time buyers)

How much do I need to save for a mortgage deposit?

If you’re buying your first home, one of the biggest questions is usually simple: how much deposit do I need to save?

The answer depends on the mortgage you’re aiming for, the price of the property, and how lenders assess the overall risk of the deal. The good news is that you can estimate your deposit requirement early, then build a savings plan around it.

What is a mortgage deposit?

A mortgage deposit is the money you pay upfront towards the purchase price.

In most cases, it’s calculated as the difference between:

• the property purchase price, and
• the amount you borrow from the lender.

Deposits are typically expressed as a percentage of the property value, because lenders use this to measure loan-to-value (LTV).

Deposit and LTV: the key relationship

LTV (loan-to-value) is the percentage of the property value that you borrow.

For example:

• A 95% LTV mortgage means you borrow 95% of the property value, so your deposit is 5%.
• A 90% LTV mortgage means you borrow 90% of the property value, so your deposit is 10%.

In general, a larger deposit reduces the LTV, which can make your application easier to place and may increase the range of mortgage options available.

How much deposit do you need? (Quick examples)

To turn percentages into real numbers, multiply the property price by the deposit percentage.

Example: property price of £180,000

• 5% deposit (95% LTV): £180,000 × 0.05 = £9,000
• 10% deposit (90% LTV): £180,000 × 0.10 = £18,000
• 15% deposit (85% LTV): £180,000 × 0.15 = £27,000

If you’re still searching for a property, you can use this approach with a realistic estimate of what you might buy.

How to estimate your deposit before you choose a property

Even if you don’t know the exact home yet, you can build a practical “ballpark” deposit target.

1) Start with a realistic property budget

Look at local listings for homes that match your needs (bedrooms, location, condition, and any must-haves). Once you have a rough price range, you can calculate deposit amounts for that range.

2) Consider your likely mortgage LTV

Many first-time buyers aim for the lowest deposit they can manage, but it’s worth comparing what happens if you save a bit more.

As a general rule:

• moving from a higher LTV to a lower LTV usually means a larger deposit but a smaller loan, and that can affect affordability and the mortgage options available.

3) Factor in other buying costs

A deposit isn’t the only upfront cost. Depending on your situation, you may also need to budget for items such as:

• legal fees
• survey/valuation costs
• moving costs
• Stamp Duty Land Tax (where applicable)

What is the minimum deposit for a mortgage?

For many borrowers, a 5% deposit (often described as a 95% LTV mortgage) is a common benchmark for mainstream lending. However, minimum deposit requirements vary by lender and product, and not every mortgage is available to every borrower.

Lenders will consider your circumstances, including affordability and credit history.

Can you get a mortgage with a smaller (or no) deposit?

There are limited mortgage options that may reduce the deposit requirement further than standard deals. These are often tightly structured and may come with additional conditions.

Where a deal allows a very low deposit, it’s important to understand that lenders may price the risk differently, which can mean higher interest rates, fees, or both compared with mainstream options.

Also, even if the deposit is lower, you’ll still need to plan for the other costs of buying.

How your deposit can affect monthly payments

A larger deposit usually means:

• you borrow less, and
• you pay interest on a smaller loan amount.

That can reduce monthly repayments (though the exact figure depends on the mortgage rate, term length, and whether the rate is fixed or variable).

If you’re comparing scenarios, it can help to think in terms of how much you want to borrow rather than only focusing on the deposit percentage.

Ways to save for a mortgage deposit

Saving for a deposit is rarely about one big change—it’s usually about consistent progress and reducing friction.

Set a monthly target you can sustain

Choose a deposit goal based on your estimated property price and the LTV you’re aiming for. Then translate that into a monthly amount.

If your target feels too high, you may need to adjust the plan—either by increasing the time horizon or exploring options that reduce the deposit requirement.

Use the right savings approach

Many first-time buyers open a dedicated savings account so their deposit money is separated from everyday spending. The key is to keep the money accessible when needed, while aiming for competitive interest.

Tackle existing debts where possible

Credit cards, personal loans, and other high-cost borrowing can make saving harder. Paying down debts can free up cashflow and may also help your overall mortgage application.

Reduce spending in practical ways

Small changes can add up quickly. Examples include:

• cutting non-essential subscriptions
• limiting impulse purchases
• planning meals and shopping lists

The goal isn’t deprivation—it’s redirecting money towards the deposit.

Schemes and alternatives that may reduce how much you need to save

Depending on your circumstances, there may be options designed to help first-time buyers get onto the property ladder with less deposit than a standard mortgage.

Guarantor and Joint Borrower Sole Proprietor (JBSP)

These arrangements can help some buyers access a mortgage with a smaller deposit by adding support to the application.

• Guarantor mortgages typically involve another person offering additional security if repayments aren’t maintained.
• JBSP can allow another person’s income to be considered without them necessarily taking ownership of the property, though they may still be responsible for repayments.

These structures can be useful, but they also come with responsibilities—so it’s important to understand the implications for everyone involved.

Shared Ownership

With Shared Ownership, you buy a share of the property and pay rent on the remaining share. Because you’re purchasing a portion rather than the whole property, your mortgage (and deposit) may be lower than buying outright.

First Homes (discounted new-build)

Some discounted new-build schemes can reduce the purchase price, which may reduce the deposit needed. The deposit is usually calculated based on the discounted value, but the exact approach can vary.

Lifetime ISA (LISA)

A Lifetime ISA can be used towards buying your first home for eligible buyers. It offers a government bonus on contributions, which can help boost your deposit over time.

Right to Buy

If you currently rent from a council or certain housing providers, Right to Buy may allow you to purchase your home at a discount. This can reduce the amount you need to save compared with buying at full market value.

Average first-time-buyer deposit by region (context)

Deposit sizes can vary across the UK due to differences in property prices. Looking at regional averages can help you set expectations and compare your target with what others in your area are typically saving.

Putting it all together: a simple way to plan your deposit

A practical approach is to:

1. estimate your likely property price range
2. choose a deposit/LTV target you can realistically reach
3. calculate the deposit amount using the percentage
4. budget for other buying costs
5. set a monthly savings plan and review it regularly

As your savings grow, you can re-check the deposit scenarios and see whether moving to a lower LTV opens up more mortgage options.

Key takeaways for first-time buyers

• A mortgage deposit is usually expressed as a percentage of the property value (LTV).
• A 5% deposit is a common benchmark for mainstream mortgages, but availability depends on your circumstances.
• Saving more deposit can reduce the loan size and may improve the range of options available.
• Other buying costs still need to be planned for, even if your deposit is lower.
• Schemes such as Shared Ownership, First Homes, and Lifetime ISA can change how much deposit you may need.

If you’re working out your deposit and want to compare different mortgage scenarios, using a mortgage calculator can help you understand how deposit size may influence borrowing and repayments.