How Much Deposit Do You Need to Buy a House in 2026?

Most first-time buyers in the UK need a deposit of at least 5% of a home's price, though 10% or more unlocks noticeably cheaper mortgages. On a £250,000 property that means a minimum of £12,500, rising to £25,000 for a 10% deposit. The bigger your deposit, the lower your loan-to-value (LTV), the better the interest rates lenders offer, and the smaller your monthly repayments. In 2026, 95% mortgages exist but come with higher rates, so many buyers aim for 10% to balance the deposit hurdle against monthly cost.

In short: 5% is the practical minimum, 10–15% is the sweet spot for cheaper rates, and you should budget several thousand pounds more on top of the deposit for fees.

What is a house deposit — and why does size matter?

Your deposit is the slice of a property's price you pay from your own savings; the mortgage covers the rest. It is expressed as a percentage of the purchase price, and that percentage decides your loan-to-value ratio. A 10% deposit means a 90% LTV mortgage. Lenders price risk by LTV: the more equity you put in, the less exposed they are if prices fall, so they reward larger deposits with lower interest rates. That is why deposit size affects not just whether you can buy, but how much your home costs you every month for years afterwards.

The 5% minimum: what a small deposit really means

A 5% deposit is the usual entry point for first-time buyers and qualifies you for a 95% mortgage. It gets you onto the ladder with the smallest possible savings pot, which matters when rents are high and saving is slow. The trade-off is cost: 95% mortgages carry the highest interest rates, your monthly payments are larger, and you have less protection against negative equity if house prices dip. A 5% deposit is a legitimate route — millions have used it — but treat it as the floor, not the goal, if you can stretch further.

• 5% deposit on a £200,000 home = £10,000 (95% mortgage, highest rates)
• 5% deposit on a £250,000 home = £12,500
• 5% deposit on a £300,000 home = £15,000
• Higher rates at 95% LTV mean larger monthly payments for the same loan size
• Less equity buffer if house prices fall in the short term

5% vs 10% vs 15%: what each deposit unlocks

Mortgage rates step down at key LTV thresholds — commonly 95%, 90%, 85% and 75%. Crossing below 90% (a 10% deposit) typically opens a wider, cheaper range of deals. Dropping below 85% (a 15% deposit) unlocks better rates again. On a £250,000 home, moving from a 5% to a 10% deposit is an extra £12,500 saved, but it can shave a meaningful amount off your monthly payment and off the total interest you pay over the mortgage term. If you can reach 10–15%, the long-run saving usually justifies the wait.

How much do you need for a typical first home?

The right target depends on where you buy. The UK average house price sits well above the national first-time buyer figure, and London and the South East are far higher than the North East or Northern Ireland. Rather than fixate on a national average, work backwards from real listings in your target area: take the prices you actually see, apply 5%, 10% and 15%, and you have three concrete savings goals. Then add your fees budget on top. That gives you a realistic number to save toward instead of an abstract percentage.

• £150,000 home: 5% = £7,500, 10% = £15,000, 15% = £22,500
• £250,000 home: 5% = £12,500, 10% = £25,000, 15% = £37,500
• £350,000 home: 5% = £17,500, 10% = £35,000, 15% = £52,500
• £450,000 home: 5% = £22,500, 10% = £45,000, 15% = £67,500

The costs beyond the deposit

Your deposit is not the only cash you need up front. First-time buyers routinely underestimate the extras, then scramble at the last minute. Budget separately for conveyancing (legal) fees, local authority searches, a survey suited to the property's age, a mortgage arrangement or product fee, and removal costs. Stamp duty may also apply: in England and Northern Ireland in 2026, first-time buyers pay 0% up to £300,000, then 5% on the portion from £300,001 to £500,000, with no relief on purchases above £500,000. Keep these funds ring-fenced and separate from your deposit.

• Conveyancing / solicitor fees — often £1,000–£2,000 plus disbursements
• Local searches — typically a few hundred pounds
• Survey — from a basic condition report to a full building survey
• Mortgage arrangement / product fee — can run to several hundred pounds or more
• Removals and immediate moving-in costs
• Stamp duty where it applies (FTB relief: 0% to £300,000 in England & NI)

How to hit your deposit target faster

Once you know your number, the fastest routes are usually a Lifetime ISA and disciplined budgeting. A Lifetime ISA adds a 25% government bonus on up to £4,000 saved each tax year — up to £1,000 free per year — provided the home costs £450,000 or less and you follow the scheme rules. Beyond that, moving savings into a competitive account, cutting your single biggest monthly outgoing (often rent, if a house-share or family stay is possible), and directing any windfalls or bonuses straight into the deposit pot all compress the timeline. A gifted deposit from family, properly documented, can also close the gap.

How your deposit affects what you can borrow

Your deposit and your income work together to set your budget. Lenders typically lend around 4.5 times your annual income, and your deposit is added on top of that borrowing to give your maximum purchase price. So a couple earning £60,000 between them might borrow roughly £270,000 and, with a £30,000 deposit, target homes up to about £300,000. A larger deposit therefore does two things at once: it lifts the top of your budget and lowers your LTV, which improves the rate on the money you do borrow. If your income caps your borrowing, saving a bigger deposit is one of the few levers that raises your ceiling.

Does a bigger deposit always make sense?

Usually, but not infinitely. Beyond about 25% deposit (a 75% mortgage), rate improvements tend to flatten out, so pushing from 25% to 40% saves less than the earlier jumps did. There is also a cost to waiting: if you spend two extra years saving while rents rise and prices climb, the bigger deposit can be outrun by a moving market. The right balance is personal — weigh the monthly saving a lower rate gives you against the risk and cost of staying out of the market longer. For most first-time buyers, reaching 10–15% is the pragmatic target.

“The gap between a 5% and a 10% deposit can feel enormous while you are saving — but on a 25-year mortgage, the lower rate a bigger deposit unlocks often repays that extra saving many times over.”

This guide is for informational purposes only and does not constitute financial advice. Mortgage eligibility, interest rates, deposit requirements and scheme rules vary by circumstance — always speak to a qualified mortgage adviser or financial adviser before making decisions.