How Much Deposit Do I Actually Need To Buy A House?

Everyone says you need a big deposit, but what do you actually need to take your first steps on the property market?

The minimum deposit accepted by most lenders is 5% of the property price. On the average UK home, which currently costs around £268,000, that is £13,400. That is the floor. You do not need 10%, 15%, or 20% to get started.

But the size of your deposit does matter, and here is why.

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By Antonia Medlicott
Published: June 24, 2026
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Last Update: 3 weeks ago
2 min read

The deposit-to-rate connection

Lenders decide your mortgage rate based partly on how much you are borrowing relative to the value of the property.

This is called loan-to-value, or LTV. The lower your LTV, the less risk the lender takes on, and the better the rate they will offer.

In practice, there are a series of LTV thresholds that unlock better deals:

95% LTV (5% deposit): the highest rates available
90% LTV (10% deposit): meaningfully cheaper deals
85% LTV (15% deposit): better again
75% LTV (25% deposit): access to most competitive deals
60% LTV (40% deposit): typically the best rates on the market

The difference between a 5% and a 10% deposit is not just about the deposit amount itself. On a £250,000 property, moving from 5% to 10% (an extra £12,500) could reduce your monthly payment by £50 to £100 or more, depending on the rate difference.

Over a two-year fix, that is £1,200 to £2,400.

Can a family member help?

Yes. A gifted deposit from a family member is accepted by most lenders. They will ask for a signed letter confirming it is a gift and not a loan, and your solicitor will request the same. It is a common arrangement and not one lenders look unfavourably on.

The Lifetime ISA

If you are aged 18 to 39, the Lifetime ISA is one of the most efficient ways to save for a deposit. You can put in up to £4,000 a year and the government adds a 25% bonus on top: a free £1,000 a year, paid monthly so it earns interest on the government’s contribution throughout your saving period.

Check out our best Lifetime ISAs round up for more.

The property must be worth £450,000 or less, and you need to have held the account for at least 12 months before using it.

The LISA is being replaced by a new First-Time Buyer ISA in April 2028. Existing accounts are not being closed, and the 25% bonus continues until then. If you are eligible and do not yet have one, opening it now starts the 12-month clock.

So what is the honest answer?

The minimum is 5%. If you can stretch to 10%, you will likely get a better rate and lower monthly payments. If you can go further, the savings compound. But waiting years to save a bigger deposit while renting is not automatically the right call either, because you are paying someone else’s mortgage in the meantime.

The right deposit size depends on your income, how long saving will take, and what is available where you want to buy.

Use our Mortgage Calculator to see what you could borrow at different deposit levels.

Sources: ONS UK House Price Index March 2026; Moneyfacts June 2026. Your home may be repossessed if you do not keep up repayments on a mortgage. This article is for information only and does not constitute financial advice.