How much deposit do you need?

The deposit you put down sets your loan-to-value (LTV), the percentage of the property price you are borrowing. Loan-to-value drives which lenders will look at you and what rate they will offer.

The deposit tiers in plain English

At 5% deposit you have access to the smallest pool of lenders, but you can buy. Rates are higher because the lender is taking on more risk. At 10% the pool widens and rates step down. At 15% you reach the part of the market where most mainstream lenders compete. From 25% upwards you are on the most competitive rates available.

Worked example on a £300,000 purchase

On a £300,000 home, a 5% deposit is £15,000, a 10% deposit is £30,000, a 15% deposit is £45,000, and a 25% deposit is £75,000. The gap between 95% LTV and 90% LTV is usually 0.4 to 0.7 percentage points. The gap between 90% LTV and 85% LTV is typically 0.3 to 0.6 points. So pushing from 5% to 10% deposit on a 25-year mortgage at typical rates can save £60 to £110 a month, which is £7,200 to £13,200 over a five-year fix. The 15% mark is where the rate curve flattens.

Specialist 5% deposit routes

Some lenders run schemes that give you a 5% deposit deal at near-90% rates if you meet specific criteria. Track Record, Family Springboard, Deposit Unlock on new build, and a small set of broker-only 5% products are the routes worth knowing about. We assess each on the numbers, not the marketing. Track Record uses your rental payment history as evidence of affordability. Family Springboard takes a small cash deposit from a family member into a savings account at the lender for a fixed term. Deposit Unlock is housebuilder-backed insurance that lets a small group of lenders price 95% LTV more competitively on new build.

Stamp Duty Land Tax (SDLT) and your deposit

First-time buyer SDLT relief means no Stamp Duty up to a property price of £300,000. Between £300,001 and £500,000 you pay 5% on the slice above £300,000. Above £500,000 you lose the relief entirely and pay standard SDLT from £125,000 up. Plan your deposit so SDLT is not a surprise, not the other way round. On a £320,000 purchase, the SDLT bill for a first-time buyer is £1,000 (5% of the £20,000 above the threshold). On a £510,000 purchase it leaps to £15,500 because relief is gone entirely. The cliff at £500,000 catches a lot of people; we flag it before you offer.

Saving versus buying now

The right call depends on the rate gap, the property market in your area, and how long the saving stretch will take. We run the numbers both ways. If waiting six months to push from 5% to 10% saves you £120 a month for five years, we will tell you. If property inflation in your patch will eat the saving, we will tell you that too. As a rough sense check, a 3% annual price rise on a £300,000 home is £9,000 a year, more than most people save in twelve months while still paying rent.

Where the deposit money has to come from

Lenders trace every penny. Personal savings need three to six months of statements showing the build-up. A gifted deposit needs a signed letter from the donor, three months of donor statements, and donor ID. Help to Buy ISA and Lifetime ISA (LISA) bonuses count, although the LISA carries a 25% unauthorised withdrawal charge if the property is over £450,000. Sale proceeds from a previous property need the completion statement. Inheritance needs probate documentation. We line all of this up before the application so the case does not stall on source-of-funds questions.

Common pitfalls we see

Forgetting fees on top of the deposit. A typical first-time buyer needs around £2,500 to £4,000 of additional cash for solicitor fees, searches, survey and moving costs, even before any furniture spend. Draining the deposit to clear a small credit card can also backfire if it pushes you below a deposit tier. We model the trade-off rather than guess.