The minimum deposit
Most lenders ask for a minimum deposit of 5% of the property price. So on a £300,000 home, that is £15,000. Some lenders and schemes cater for smaller deposits, while others prefer 10% or more.
Why a bigger deposit helps
Your deposit determines your loan-to-value (LTV) — the size of your mortgage compared with the property value. Lower LTVs generally attract lower interest rates, because you are seen as lower risk. Moving from a 10% to a 15% deposit, for example, can move you into a cheaper rate band.
A larger deposit also means borrowing less overall, which reduces both your monthly payment and the total interest you pay.
How much should you aim for?
- 5% — gets you started; rates are higher.
- 10% — opens up more deals.
- 15–25% — noticeably better rates.
- 40%+ — typically the best rates available.
Building your deposit
Regular saving, a Lifetime ISA (which can add a government bonus for eligible first-time buyers), and gifted deposits from family are all common routes. An adviser can help you understand how each is treated by lenders.
This guide is general information, not personal financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage.