How Much Deposit Do You Really Need for a First-Time Buyer Mortgage?
Saving for a deposit is one of the biggest hurdles for first-time buyers. But how much do you actually need? Let’s break it down for you…
Minimum Deposit Requirements
In 2025, most lenders required a minimum deposit of 5%. However, your options improve with a 10% or 20% deposit.
- 5% deposit: Limited mortgage choices, often with higher interest rates.
- 10% deposit: More mortgage deals, better interest rates.
- 20% deposit: Access to the lowest rates and lower monthly repayments.
For example; if you want to buy a £250,000 home:
- 5% deposit = £12,500
- 10% deposit = £25,000
- 20% deposit = £50,000
How to Save for a Deposit Faster
- Open a Lifetime ISA (LISA); get a 25% government bonus on savings.
- Cut back on expenses such as reducing rent, subscriptions, and unnecessary spending.
- Check first-time buyer schemes to see if you can buy with a lower deposit.
💡 Tip: A larger deposit reduces your loan-to-value (LTV) ratio, making you a lower-risk borrower and securing better mortgage deals.