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How Much Deposit for a House?

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A question we get asked a lot is how much deposit do you need for a house? Truth is, this largely depends on property price. But, the larger your deposit, the better the mortgage deal you’re likely to get, with more manageable monthly repayments. Let’s break it down, and share some top saving tips to help you get on the property ladder. 

How much deposit do I need for a house?

Deposits are typically between 5-20% of a property price. This means a lender can loan you anywhere from a 95% loan-to-value (LTV), allowing you to get on the property ladder with a 5% deposit i.e. 5% of the property’s price.

LTV measures the relationship between the loan amount and the property, and is how a lender assesses their risk. A rule of thumb tends to be that the higher the LTV, the higher the interest rates. 

Your home may be repossessed if you do not keep up repayments on your mortgage.

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A breakdown

Assuming a property price of £270,973, you’d need to save the following amounts based on a percentage:

  1. 5% deposit = £13,549
  2. 10% deposit = £27,097
  3. 15% deposit = £40,646
  4. 20% deposit = £54,195

95% LTV mortgages 

In April 2021 the government launched a 95% LTV scheme, to help those with smaller deposits to buy a property. This government-backed initiative is not limited to first-time buyers nor to new build properties. 

However, while 5% is the minimum you’ll need to buy a house, it’s recommended you save more – if you can. This is because 95% LTV mortgages carry a greater risk for mortgage lenders, as a drop in house prices could potentially leave you in negative equity

As a result, lenders often price this into the mortgage offer, meaning high LTV mortgages tend to be more expensive, with higher interest rates. In short: the greater the risk to the mortgage lender, and the more money they lend you, the higher the interest rates.

So, it’s recommended to save a higher deposit, if you can. This would give you more deals to choose from, with lower monthly repayments.

How to calculate your deposit

When preparing to buy a house and deciding how much you need to save, consider two key things:

  1. What you can afford
  2. The fees involved (i.e mortgage arrangement fees, solicitor, surveyor)
  3. Property price

How much can you afford?

When deciding what mortgage you can afford, look at the bigger picture. Don’t just consider the monthly mortgage repayments themselves, but everything else you’ll be paying for, including:

  • Living expenses
  • Utility bills
  • Maintenance costs associated with owning a home

Use a mortgage affordability calculator as a rough guide for the mortgage you could potentially afford. 

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Property price

The property price will determine how high a deposit you need to save. To get a feel for this, decide on an area and do thorough research. 

You’ll be able to get a rough idea for how much properties sell for in the area by checking out property portals or estate agent listings. 

You won’t be able to determine an exact figure, but you will be able to get a ballpark, which can give you something to aim for when saving. 

How to save for a deposit

Saving for a deposit can sound easier said than done, especially if you’re renting at the same time. Here are some suggestions and adjustments you could make to help you free up some money to then put towards your savings pot for a deposit to buy a house:

  1. Set a monthly budget and aim to put a certain amount away each month 
  2. Downsize your current rental property and reduce your monthly rental
  3. Move back in with family to reduce your living expenses
  4. Move in with more people, say a larger group of friends (more people to share the rent and bills)
  5. Rent in a suburb rather than a city
  6. Cut back on non-essentials and certain luxuries (e.g. daily overpriced coffees). Every little helps!
  7. Sublet (if your contract allows it)
  8. Sell items you don’t need anymore
  9. Maximise your current savings (there might be higher interest in an ISA, rather than a standard savings account)

How long does it take to save for a house deposit? 

This depends on your income, the rate you save, the price of the property you’re looking to buy, location – and more. 


Let’s take the average house price of £270,973. For 15% deposit, you would need to save £40,646. 

The median household income of individuals as of the last financial year was £29,900. Saving at a rate of 20% (of their income) a year would see them put away £5,980. This works out to around £498 a month.

This means it would take someone 8 years to save for a house deposit – using these averages. 

Of course, this could be longer if trying to buy in the capital, where house prices are the highest in the UK, sitting at an average of £510,000 in January 2022. 

What to do if you’re struggling to save

It’s rare for someone to buy a house alone, most do it with at least one other person, usually a partner. However, even with this, getting on the ladder can be tough. 

But, if you’re struggling to save for a house deposit, there is help out there. 

Why should you save a high deposit?

While saving can be tough, there are many reasons why saving as high a deposit as possible can be a good idea. This includes:

Lower interest rates

The higher a deposit you can save, the less risky you are for mortgage lenders. So, generally speaking, this can give you better mortgage options with lower interest rates.

Lower monthly repayments 

The bigger your deposit, the smaller your loan, and therefore the cheaper your mortgage repayments will likely be. 

Easier application process 

When applying for a mortgage, a lender runs a number of checks on you, including:

  • Income/proof of employment 
  • Ingoings & outgoings 
  • Credit reports

In short: you need to prove you can keep up with repayments. The more you need to spend on monthly mortgage repayments, the more likely you are to fail these checks. So, you can improve your chances of getting a mortgage with a higher deposit.

It’s always a good idea to check your credit score to see where you stand before lenders do. That way, you can take steps to improve it if necessary. Get started below – it’s free!

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Less risk 

It’s not just the lender who takes on less risk if you have a large deposit, but also you. You’re at less risk of ending up in negative equity, which is where your house is worth less than what you paid for it.

More choice

What do you need to get a mortgage? A lender will usually lend you multiple of your salary. So, the higher the deposit you save, the bigger your budget will likely be. This will give you a greater choice of location, property type, and more. 

If your salary is low, you may need a bigger deposit to make up the value of the property, if you can’t borrow the money. 

Need a mortgage adviser?

Want to explore your mortgage options and find the best deal for you? We can connect you with our approved mortgage adviser.

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Your home may be repossessed if you do not keep up repayments on your mortgage.

Last Updated: January 19th, 2024