How much deposit do I need for a mortgage?

The honest answer is "it depends" — but that's not very helpful on its own, so let me actually explain what it depends on. I'm Penny, and I'll walk you through how deposits work in plain English, so you know what the numbers mean before you talk to anyone.

The short version

Your deposit is the chunk of the purchase price you pay yourself. The mortgage covers the rest. As a very rough starting point, many lenders will consider a deposit of around 5% of the property's price — so on a home costing £200,000, that's in the region of £10,000.

But 5% is the floor for a lot of standard deals, not the whole story. Plenty of buyers put down more — commonly 10%, 15% or 20%+ — and the size of your deposit changes the kind of mortgages you can look at. More on why in a moment.

These figures are general market norms, not a quote or a promise about what any particular lender would offer you.

Why the deposit size matters: loan-to-value

The key phrase here is loan-to-value, or LTV — the size of your mortgage as a percentage of the property's value. If you put down a 10% deposit, you're borrowing 90%, so that's a 90% LTV mortgage.

LTV matters because, as a general rule, the more you put down (the lower your LTV), the wider the range of deals lenders tend to make available. A bigger deposit means the lender is taking on less risk relative to the property's value.

There are often noticeable steps at round numbers — for example the choices commonly available at 90% LTV can differ from those at 85% or 80%. That's why some people aim to nudge their deposit over one of these thresholds, and why others are comfortable buying sooner with a smaller deposit. Neither is right or wrong — it depends on your own circumstances and priorities.

Low-deposit routes worth knowing about

If saving a big deposit feels out of reach, you're not alone, and there are a few well-established routes designed for smaller deposits:

• Low-deposit mortgages — some lenders offer deals aimed at buyers with around a 5% deposit (roughly 95% LTV). Availability changes over time and depends on your situation.
• Shared ownership — you buy a share of a property (commonly somewhere between a quarter and three-quarters) and pay rent on the rest, so the deposit is based only on the share you're buying, not the full price. Your home may be repossessed if you do not keep up repayments.
• Guarantor or family-assisted mortgages — a family member's savings or property helps support the application. These come with real commitments for the person helping, so they're worth understanding fully.

Each of these has trade-offs as well as benefits, and eligibility varies. I can explain how they work in principle; whether any of them fit you is a conversation for a qualified adviser.

Where a deposit can come from

A deposit doesn't have to be built entirely from your own savings. Common sources lenders will often consider include:

• Your own savings — the most straightforward route.
• A gifted deposit — money given (not lent) by a close family member. Lenders usually want a simple letter confirming it's a genuine gift with no expectation of repayment or ownership.
• A Lifetime ISA (LISA) — a government scheme where eligible first-time buyers can get a bonus on savings put towards a first home, within set rules and limits.
• Equity from a property you already own — if you're moving rather than buying your first home.

Lenders also care about where the money came from (this is normal anti-money-laundering checking), so it helps to keep records of savings and any gifts.

Don't forget the costs beyond the deposit

The deposit is the big one, but it isn't the only cash you'll need. It's worth budgeting for the extras too, so nothing catches you out:

• Stamp duty (or its equivalent in Scotland and Wales), depending on the price and whether you're a first-time buyer.
• Legal and conveyancing fees.
• A survey or valuation on the property.
• Mortgage-related and other fees, which any lender or adviser must set out clearly and up front.
• Moving costs and a sensible buffer for the first few months.

A larger deposit reduces how much you borrow, but keeping a little back for these costs — and for emergencies — is something plenty of buyers factor in.

How much you can borrow is a separate question

Your deposit sets how much of the price you're covering yourself. Quite separately, a lender looks at how much they'll lend you, which is usually based on your income and outgoings. A common rule of thumb is that lenders often lend somewhere in the region of 4 to 4.5 times your income, though this varies a lot by lender and circumstances and isn't a guarantee.

So the deposit and the borrowing amount work together: the two added up need to cover the property's price. Understanding both sides is what tells you what's realistic — and it's exactly the kind of thing a whole-of-market adviser can map out with you against real, current deals rather than rules of thumb.

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured against it. This guide is general information, not advice.