Your deposit is one of the biggest factors in determining what mortgage deals you qualify for, what interest rate you receive, and how much you can borrow overall. Whether you’re a first-time buyer, moving home, or looking at a buy-to-let mortgage, understanding deposit requirements will help you plan realistically before applying.
This guide breaks down deposit sizes, the best Loan-to-Value (LTV) bands, minimum requirements, government-backed options, and how deposit size affects affordability and rates. We also cover typical property scenarios and how much deposit you may need for each.
What Is a Mortgage Deposit?
A mortgage deposit is the amount of money you contribute upfront toward the purchase price of a property. It represents part of your equity and determines the initial Loan-to-Value (LTV) of your mortgage.
For example:
- Property price: £300,000
- Deposit: £30,000
Your mortgage = £270,000 (90% LTV).
The lower your LTV, the better the interest rates lenders typically offer.
Minimum Deposit Requirements
The minimum deposit varies depending on the type of borrower and mortgage:
- ✔️ First-time buyers: As little as 5% with a 95% mortgage
- ✔️ Home movers: Usually 5–10% minimum
- ✔️ New-build homes: Often 10–15% (some lenders require more)
- ✔️ Buy-to-let: Typically 25–40% deposit required
Lenders set their own criteria based on risk, property type and borrower profile.
Best Deposit Sizes for Lower Rates
Deposit size is broken into specific LTV bands. When you cross into a lower band, your interest rate usually becomes cheaper.
Common LTV bands:
- 95% (5% deposit)
- 90% (10% deposit)
- 85% (15% deposit)
- 80% (20% deposit)
- 75% (25% deposit)
- 60% (40% deposit)
Rates improve significantly as you move into lower bands. If you are close to the next deposit milestone, increasing your deposit slightly may save thousands over the term.
Example: How Deposit Affects Rates
Scenario: £300,000 purchase
| Deposit | LTV | Typical Rate |
|---|---|---|
| 5% (£15,000) | 95% LTV | Higher rates |
| 10% (£30,000) | 90% LTV | Lower than 95% |
| 20% (£60,000) | 80% LTV | Much lower |
If you’re unsure how your deposit affects borrowing, see our full explanation of Loan-to-Value bands.
Deposit Requirements for First-Time Buyers
Most first-time buyers aim for a 5%–10% deposit, depending on affordability and property price. A larger deposit can help if:
- ✔️ Your credit history is limited
- ✔️ You want access to lower-rate fixed mortgages
- ✔️ You are buying a new-build property
For specialist application routes, such as Shared Ownership, the initial deposit can be lower because you buy only a share of the property.
Deposit Requirements for Buy-to-Let
Buy-to-let mortgages have stricter deposit rules. Lenders commonly require:
- ✔️ 25% minimum deposit
- ✔️ 40% for the best interest rates
Your expected rental income must also meet stress testing requirements, which may increase the deposit needed.
New Builds and Flats – Why Deposits Are Higher
Lenders often require larger deposits for new-build homes due to price volatility and increased lending risk.
- ✔️ New-build houses: often 10%+
- ✔️ New-build flats: often 15–25%
If you’re buying a new-build property, consider reviewing our section on the borrowing guide to see how your deposit impacts your buying budget.
How Deposit Size Affects Affordability
Your deposit doesn’t directly change income affordability calculations, but it impacts:
- ✔️ Interest rate offered
- ✔️ Maximum loan amount available
- ✔️ Monthly repayments
A better rate means lower payments, which in turn can make affordability easier to pass.
Government Assistance Schemes
While Help to Buy has ended, several schemes still support buyers with small deposits, including:
- ✔️ Mortgage Guarantee Scheme (95% LTV)
- ✔️ First Homes Scheme (discounted new-build homes)
- ✔️ Shared Ownership
If you’re exploring these routes, our Shared Ownership Guide explains the structure and deposit requirements.
How to Grow Your Deposit Faster
Saving for a deposit can feel slow, but small adjustments make a big difference.
- ✔️ Reduce monthly credit card balances
- ✔️ Pause new finance applications
- ✔️ Move savings into a higher-interest account
- ✔️ Track spending more closely for 3–6 months before applying
If you want a rough idea of how deposit and borrowing size interact, try the tools on our mortgage calculators page.
Next Steps
If you’re planning your mortgage and want tailored guidance on deposit requirements, we can connect you with an FCA-regulated adviser who can assess your full situation and explain the best options for your budget and goals.
You can start by reviewing related guides like How Much Can I Borrow? or by getting in touch via our contact page.
All mortgage advice is provided by FCA-regulated advisers. Your home may be repossessed if you do not keep up repayments on your mortgage.
FAQs
Do I need a deposit if I’m using Shared Ownership?
In most cases yes, but only on the share you’re buying — not the full property value.
Are 5% deposit mortgages still available?
Yes, through the Mortgage Guarantee Scheme and selected lender products.
Is a bigger deposit always better?
Almost always. It reduces your LTV, interest rate, and overall risk to the lender.
Can parents gift a deposit?
Yes — most lenders accept gifted deposits with a simple confirmation letter.
Do new-build flats require larger deposits?
Typically yes, often 15–25% minimum.