Saving for a deposit is often the part of buying a first home that feels most out of reach. For many first-time buyers, it is the single biggest hurdle, and one that can create uncertainty long before house hunting even begins.

There is also a lot of mixed messaging around how much you actually need. Some people assume a large lump sum is essential, while others hear that buying with a smaller deposit is possible but are unsure how realistic that really is. The truth depends on several factors and this blog is here to help you dispel some of the myths.

Understanding how deposits work, what lenders typically look for, and how different deposit levels can affect your mortgage options can make the process feel far less daunting. Rather than focusing on a single number, it can be more helpful to understand the range of possibilities and what they mean for you as a first-time buyer.

What is a deposit and why does it matter?

A deposit is the amount of money you put towards the purchase of a property before taking out a mortgage. It forms your initial stake in the home and is usually shown as a percentage of the property’s value.

From a lender’s point of view, the deposit reduces the amount they need to lend and helps offset risk. In simple terms, the more you can contribute upfront, the less the lender is exposed if property prices change or financial circumstances shift.

What is the minimum deposit for a first-time buyer?

In the UK, some lenders offer mortgages to first-time buyers with a deposit as low as 5 percent of the property price. On a £250,000 home, that would mean a deposit of £12,500.

That said, a 5 percent deposit is not automatically available to everyone. Mortgage products at this level tend to be more limited and are assessed alongside other factors such as income, outgoings, credit history, and affordability checks.

Does having a bigger deposit make a difference?

The size of your deposit can influence both the choice of mortgage products available and the interest rate you are offered. Even a small increase in deposit can sometimes open up more options.

A larger deposit may:

Increase the range of lenders willing to consider your application
Reduce the interest rate applied to the mortgage
Lower monthly repayments over the life of the loan
Improve the overall strength of your application

Many first-time buyers aim for deposit levels such as 10 percent or 15 percent, as these can offer a broader choice of products compared to the minimum. Higher deposits, while harder to save, can also reduce the total cost of borrowing over time.

What is loan to value and how does it affect your mortgage?

Loan to Value, often referred to as LTV, describes how much of the property’s value is being borrowed.

For example, a 95 percent LTV mortgage means you are borrowing 95 percent of the property value and providing a 5 percent deposit. A 90 percent LTV mortgage reflects a 10 percent deposit.

Lower LTV mortgages are generally viewed as lower risk by lenders. As a result, they often come with more competitive interest rates and a wider choice of mortgage products.

Can first-time buyers use schemes to help with a deposit?

Some buyers use government-backed savings products or schemes to help build a deposit. Lifetime ISAs are one example, offering a government bonus on savings used towards a first home, subject to eligibility criteria.

Others consider shared ownership, where a portion of a property is purchased rather than the full value. While this can reduce the size of the deposit required, it introduces different long-term considerations that are important to understand.

Is the deposit the only cost you need to plan for?

The deposit is a major part of buying a home, but it is not the only upfront cost. First-time buyers also need to factor in expenses such as solicitor fees, property surveys, moving costs and stamp duty in some circumstances.

Understanding the wider financial picture can be just as important as saving for the deposit itself.

Final note

There is no single deposit amount that suits every first-time buyer. What matters is understanding what is achievable for your circumstances and how different deposit levels can affect your options. With the right information, the process becomes less about hitting a perfect number and more about making informed choices. You can find out more about becoming a first time buyer in these blogs:

How to Get a Mortgage: A Step-by-Step Guide for First-Time Buyers - a comprehensive walkthrough of the mortgage process for first-time buyers, from saving a deposit to getting a mortgage offer.

First-Time Buyer’s Guide to Mortgages - focused on mortgages, key steps, saving for a deposit and understanding affordability.

Frequently asked questions

Is a 5 percent deposit always enough?
Not always. While some lenders offer mortgages at this level, availability depends on affordability, credit history, and wider market conditions.

Can a deposit be gifted by family?
In many cases, yes. Lenders usually require confirmation that the money is a gift and does not need to be repaid.

Does my credit history affect how much deposit I need?
It can. A stronger credit profile may increase available options, while a weaker history could mean a higher deposit is required.

Is it better to wait and save a larger deposit?
This depends on individual circumstances, including housing costs, income stability, and personal priorities.

Do first-time buyers get special mortgage deals?
Some products are aimed specifically at first-time buyers, but rates and availability are still influenced by deposit size and affordability checks.

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How Much Deposit Do First-Time Buyers Really Need