Find out how much deposit you need and how long it will take to save — with Lifetime ISA bonus option included.
Your Loan-to-Value (LTV) ratio is the size of your mortgage as a percentage of the property value. The lower your LTV, the better the mortgage interest rate you will typically be offered.
| Deposit | LTV | Typical Rate Range | £250k Property | Rating |
|---|---|---|---|---|
| 5% | 95% | 5.5% – 6.5% | £12,500 deposit | Limited choice |
| 10% | 90% | 4.8% – 5.8% | £25,000 deposit | Good start |
| 15% | 85% | 4.3% – 5.2% | £37,500 deposit | Better rates |
| 20% | 80% | 4.0% – 4.8% | £50,000 deposit | Great rates |
| 25% | 75% | 3.8% – 4.5% | £62,500 deposit | Excellent |
| 40%+ | 60% | 3.5% – 4.2% | £100,000 deposit | Best rates |
Saving for a house deposit is one of the biggest financial challenges for buyers in the UK. Understanding exactly how much you need — and how to get there faster — can make a significant difference to your property journey.
The absolute minimum deposit accepted by most UK lenders in 2025 is 5% of the property purchase price. This gives you a 95% Loan-to-Value (LTV) mortgage. While accessible, these products carry the highest interest rates and the most limited range of lenders.
For example, on a £250,000 property:
Most mortgage advisers recommend aiming for at least a 10% deposit. This opens access to a much wider range of mortgage products and meaningfully reduces your monthly repayments compared to a 5% deposit. If you can stretch to 15% or 20%, the rate improvements become increasingly significant.
Your deposit is not the only upfront cost. First-time buyers must also budget for:
Budget an extra 1.5%–3% of the property price for these additional costs on top of your deposit.
Save up to £4,000/year and get a 25% government bonus (max £1,000/year). For first homes up to £450,000. Open age 18–39, use from age 18.
Buy 25%–75% of a property and pay rent on the rest. Deposit based on share price only, making it much more accessible in expensive areas.
Armed Forces personnel can borrow up to 50% of annual salary (max £25,000) interest-free towards a deposit, repaid over 10 years.
Family members can gift deposit funds. Lenders require a signed gifted deposit letter confirming it is not a loan. No tax for the recipient.
The Lifetime ISA is one of the most powerful tools available to first-time buyers in the UK. You can open one between the ages of 18 and 39 and save up to £4,000 each tax year. The government adds a 25% bonus on everything you save — meaning up to £1,000 of free money per year.
If you save the maximum £4,000/year for 5 years, you'll have contributed £20,000 plus £5,000 in government bonuses — a total of £25,000. That is a 10% deposit on a £250,000 home, achieved with government help.
Key rules: the property must cost £450,000 or less, it must be purchased with a mortgage, and you must be a first-time buyer. Withdrawing for other reasons incurs a 25% penalty on the total (which effectively claws back the bonus and a portion of your own savings).
Once you exchange contracts, your deposit is legally committed. If you pull out after exchange, you lose your deposit. Before exchange, your money should be held by your solicitor in a client account. Always use a solicitor regulated by the SRA or CLC for full protection.
The minimum deposit for a house in the UK is 5% of the property purchase price (a 95% LTV mortgage). On a £250,000 property, that means £12,500. Most lenders require a minimum of 10% for a much wider range of products and better interest rates. Some specialist lenders offer 5% deposit mortgages but these come with strict eligibility criteria.
LTV (Loan-to-Value) directly impacts the interest rate you are offered. Lenders view a higher LTV as greater risk, so they charge more. At 95% LTV you'll pay the highest rates. At 90% LTV rates improve noticeably, while 80% and below unlocks significantly better deals. At 60% LTV you access the very best rates on the market, which can save you thousands of pounds over a 2–5 year fixed term.
The Lifetime ISA (LISA) lets you save up to £4,000 per year and receive a 25% government bonus on your contributions (maximum £1,000 bonus per year). You can use your LISA savings — including the bonus — to buy your first home, provided the property costs £450,000 or less and you purchase with a mortgage. You must be aged 18–39 to open one, and the funds must have been in the account for at least 12 months before you can use them to buy a home.
Yes. Family members (typically parents or grandparents) can gift you money towards your deposit. The lender will require a signed gifted deposit letter from the donor confirming the money is a genuine gift and will not need to be repaid. Many lenders also ask for bank statements proving the donor has the funds. There are no immediate income tax implications for the recipient. For the donor, gifts could be considered for inheritance tax purposes if they pass away within 7 years of giving the gift.
The time to save depends on your target deposit amount and monthly savings capacity. For a £250,000 home, a 10% deposit is £25,000:
Using a Lifetime ISA (with the 25% bonus) can effectively reduce savings time by 3–12 months depending on how much you contribute.
Shared ownership allows you to buy a share of a property — typically between 25% and 75% — and pay subsidised rent to a housing association on the portion you don't own. Your deposit is calculated on the share you are buying, not the full property price. For example, if you buy a 25% share of a £200,000 home, your share costs £50,000, and a 10% deposit is just £5,000. You can "staircase" your ownership upwards over time. Shared ownership is particularly useful in high-value areas where full ownership is unaffordable.
Yes. The Forces Help to Buy (FHTB) scheme allows eligible regular Armed Forces personnel to borrow up to 50% of their annual salary (to a maximum of £25,000) interest-free to use towards a deposit on a home. The loan is repaid over 10 years through monthly pay deductions. It can be used for a first home or to move to a different property to meet Service needs. Reserve forces personnel may also be eligible under certain conditions. The scheme has been extended and remains available in 2025.