The short answer: 5% is the floor, 10% is where lender choice opens up, 15% is the practical sweet spot for first-time buyers, and 25% unlocks the best mainstream rates. The longer answer depends on what you can save and what the rate difference between bands actually costs you over 25 years.

What deposit does each LTV band give you?

In the UK, mortgages are priced in loan-to-value (LTV) bands — typically 95%, 90%, 85%, 80%, 75% and 60%. Your deposit determines which band you fall into, and each band has its own pricing sheet. Crossing a band downward usually shaves the rate, sometimes materially.

• 5% deposit (95% LTV). Most mainstream lenders offer 95% products to first-time buyers and home-movers. Rates sit at the upper end. Stress tests and credit-file requirements tighter than at lower LTVs.
• 10% deposit (90% LTV). Roughly twice as many product options as 95%. Rates typically 0.4–0.8 percentage points lower. The first meaningful step-down.
• 15% deposit (85% LTV). The sweet spot for first-time buyers. Most mainstream lenders compete in this band, and rates are noticeably keener than at 90%.
• 20% deposit (80% LTV). Strong position. Rate differential vs 85% is smaller but still real (~0.2–0.3 percentage points).
• 25% deposit (75% LTV). Best mainstream rates. Beyond this, rate improvements taper sharply — going to 40% rarely beats 25% by more than 0.1 percentage points.

Real numbers at common UK price points

What each LTV band looks like in pounds at four typical UK price points:

Property price	5% deposit	10%	15%	20%	25%
£200,000	£10,000	£20,000	£30,000	£40,000	£50,000
£300,000	£15,000	£30,000	£45,000	£60,000	£75,000
£400,000	£20,000	£40,000	£60,000	£80,000	£100,000
£500,000	£25,000	£50,000	£75,000	£100,000	£125,000

Use the deposit calculator to see the figures at any price and the corresponding mortgage size.

What does the rate difference cost in real money?

On a £250,000 mortgage over 25 years, here's roughly what a half-point rate change does to your monthly payment:

• 4.5% → £1,390/month, £166,900 total interest
• 5.0% → £1,461/month, £188,500 total interest
• 5.5% → £1,535/month, £210,500 total interest

So a half-point lower rate (typical of moving from 90% to 85% LTV) saves around £70–£75 a month — about £21,000–£22,000 over 25 years. That's the maths behind "save 5% more deposit and the mortgage gets cheaper".

Work the exact figures for your price and rate on the mortgage repayment calculator.

How LISA can boost your deposit by £1,000 a year

If you're 18–39 and don't already own a UK property, the Lifetime ISA is almost always worth opening. The mechanics:

• £4,000/year contribution cap — within your overall £20,000 ISA allowance.
• 25% government bonus — added monthly. Max bonus £1,000/year, £33,000 total if you start at 18 and contribute the max every year until 50.
• £450,000 property cap — only on first homes at that price or below. Over £450,000 and you lose the bonus and pay a 25% penalty on withdrawal.
• 12-month rule — the LISA must be open for at least 12 months before you can use it for a property purchase.
• Joint applicants both get a LISA. Two LISAs = up to £2,000 a year of bonus money toward a joint deposit.

Model the impact on your timeline using the deposit savings calculator — it shows side-by-side how much faster you hit a target with the LISA bonus vs without.

Gifted deposits — how they actually work

Around a third of UK first-time buyers receive some form of family help with their deposit. Lenders are fine with this, provided the paperwork is right:

• Gifted-deposit letter. A written statement, signed by the giver, confirming the money is a gift and not a loan, and that the giver retains no interest in the property. Your solicitor or broker can supply a template.
• Source-of-funds checks. Lenders and solicitors run AML checks under the Money Laundering Regulations 2017. Expect the giver to share 3–6 months of bank statements showing where the gift originated.
• Timing matters. Funds that have sat in your account for 6+ months attract minimal scrutiny. Funds arriving in the 3 months before exchange need a clear paper trail.
• Loans for deposits are usually not allowed. Most lenders specifically exclude borrowed deposits because they reduce your affordability and complicate the risk model.

When a bigger deposit isn't worth it

The rate benefit of crossing LTV bands is real but not infinite. The rough rule:

• 5% → 10%: typically saves 0.4–0.8 percentage points of rate. Big win.
• 10% → 15%: 0.2–0.4 percentage points. Meaningful.
• 15% → 20%: 0.1–0.3 percentage points. Worth it if it's a small extra save.
• 20% → 25%: 0.1–0.2 percentage points. Borderline — depends on rate environment.
• 25% → 40%: typically <0.1 percentage points. The money is almost always better deployed elsewhere (paying down higher-rate debt, or simply buying sooner).

The other reason not to push past 25% is opportunity cost. Each extra year you save vs the price rising, the deposit target moves on you. UK house prices have risen at roughly the rate of inflation over the last decade — so if you're already at 15% and ready to move, saving longer is not necessarily a free option.

Affordability and deposit aren't the same thing

A 25% deposit doesn't guarantee a mortgage. Lenders run two tests:

• Loan-to-income (LTI): typically 4 to 4.5× household gross income, capped at 5× by selected lenders. Bigger deposit doesn't lift the income cap.
• Debt-to-income (DTI): stress-tests your monthly payment against income net of existing commitments. Bigger deposit reduces the mortgage and helps here.

So a £30,000 deposit on a £300,000 house is only achievable if the £270,000 mortgage fits within your income multiple. Use the affordability calculator to check that side of the equation before committing to a price point.

Frequently asked questions

How much deposit do I need to buy a house in the UK?

The floor is 5% of the property price for most mainstream UK residential mortgages. 10% unlocks materially more products. 15% is the practical sweet spot for first-time buyers seeking decent rates. 25% gets you the best mainstream rates on the market.

Can I buy with less than 5% deposit?

Yes, but only via specific schemes. Shared Ownership lets you buy 25–75% of a property and pay rent on the rest, with deposits sometimes as low as 5% of your share. Some lenders also offer 99% mortgages for first-time buyers with strong credit profiles and rent-payment history evidence.

How much deposit for a £200,000 house?

At 5% you need £10,000. At 10% it's £20,000. At 15% £30,000. At 25% £50,000. The deposit you choose materially affects the rate you'll be offered — 95% LTV products typically price 0.4–0.8 percentage points above 90% products on equivalent terms.

Does a bigger deposit help with bad credit?

Yes. A bigger deposit reduces the lender's risk per pound lent, so they're more willing to accept a thinner credit file or recent missed payments. Going from 10% to 15% deposit often opens up materially more lender options for borrowers with adverse credit.

Can family contribute to my deposit?

Yes — gifted deposits from immediate family (parents, grandparents, siblings) are widely accepted. You'll need a written gifted-deposit letter confirming the money is a gift, not a loan, and that the giver has no interest in the property. Some lenders also ask for the giver's bank statements showing source of funds.

Is it worth saving longer for a bigger deposit?

Usually yes up to 25%, where rate improvements flatten. Going from 5% to 15% can save £700–£1,500 a year of interest on a £250,000 mortgage at typical 2026 rates — over 25 years that's £20,000–£40,000 of savings. Above 25% the rate benefit tapers, so additional capital is often better deployed elsewhere.

What's a LISA and can it boost my deposit?

A Lifetime ISA is a tax-free savings account for 18–39 year olds. You can contribute up to £4,000 a year and the government adds a 25% bonus — up to £1,000 a year free. Funds can be used for a first home up to £450,000, provided the LISA has been open for 12+ months before purchase. For eligible buyers, it's almost always worth opening.

Related calculators

Related guides

To understand take-home pay supporting your savings target, PayslipCheck breaks down a UK payslip line by line. For longer-form deposit and budgeting strategy, PennyWise Finance has a first-time buyer savings guide.

Last reviewed: 24 May 2026.