First-Time Buyer UK: How Much Deposit Do You Need in 2026?

The minimum deposit for most UK mortgages is 5% of the property price — £13,500 on the £270,000 UK average (ONS, April 2026). A 10% deposit (£27,000) unlocks more lenders and better rates; 20% (£54,000) accesses the best published deals. The Bank of England base rate stands at 3.75% (held 18 June 2026), and the Lifetime ISA still pays a 25% government bonus on up to £4,000 saved per year toward a first home (HMRC).

This guide explains the trade-offs at each deposit size, shows worked examples at mid-2026 rates, and lays out realistic saving timelines.

Quick summary

• Minimum deposit: 5% of property price (£13,500 on the £270k UK average)
• Recommended: 10–15% for materially better rates and product choice
• Best-rate threshold: 20% (80% LTV) accesses the lowest published rates
• Government help: Lifetime ISA adds a 25% bonus on up to £4,000/year, capped at £1,000/year
• Property cap for LISA: £450,000

Minimum deposit requirements

5% deposit (95% LTV)

The minimum on most mainstream UK mortgages.

Pros:

• Less to save before buying
• Earlier entry to the property ladder
• Equity-building starts sooner

Cons:

• Higher interest rates (typically 4.5–5.0% in mid-2026, vs 3.5–3.9% at 60% LTV)
• Limited lender choice (specialist 95% LTV products only)
• Higher monthly payments
• Some lenders require a mortgage guarantee or family-deposit scheme

Example: £250,000 property

• 5% deposit: £12,500
• Mortgage: £237,500
• Representative rate: 4.7%
• Monthly payment over 25 years: £1,347

10% deposit (90% LTV)

The 90% LTV band is where most mainstream lenders compete on rate.

Benefits:

• Wider lender selection
• Better interest rates (typically 4.0–4.5% in mid-2026)
• Lower monthly payments
• More room to negotiate

Example: £250,000 property

• 10% deposit: £25,000
• Mortgage: £225,000
• Representative rate: 4.3%
• Monthly payment over 25 years: £1,225
• Saves £122/month vs 5% deposit

15% deposit (85% LTV)

The 85% LTV band typically secures rates close to the best-buys without the harder 20% deposit threshold.

Benefits:

• Materially better rates (typically 3.85–4.1% in mid-2026)
• Access to premium products
• Lower monthly costs
• Smaller gap to the 20% best-rate tier

Example: £250,000 property

• 15% deposit: £37,500
• Mortgage: £212,500
• Representative rate: 4.0%
• Monthly payment over 25 years: £1,122
• Saves £225/month vs 5% deposit

20% deposit (80% LTV)

The 80% LTV band is where the best-buys live.

Benefits:

• Lowest published rates (typically 3.75–3.9% in mid-2026)
• No high-LTV product fees
• Widest product range
• Lowest total interest over the life of the mortgage

Example: £250,000 property

• 20% deposit: £50,000
• Mortgage: £200,000
• Representative rate: 3.85%
• Monthly payment over 25 years: £1,039
• Saves £308/month vs 5% deposit
• Saves £92,400 over 25 years

Deposit requirements by property price

Property price	5% deposit	10% deposit	15% deposit	20% deposit
£150,000	£7,500	£15,000	£22,500	£30,000
£200,000	£10,000	£20,000	£30,000	£40,000
£250,000	£12,500	£25,000	£37,500	£50,000
£270,000 (UK avg)	£13,500	£27,000	£40,500	£54,000
£300,000	£15,000	£30,000	£45,000	£60,000
£400,000	£20,000	£40,000	£60,000	£80,000
£500,000	£25,000	£50,000	£75,000	£100,000

Key insight: each additional 5% deposit typically reduces the offered interest rate by 0.15–0.30 percentage points, saving thousands across the term.

Regional variations

Deposit requirements vary substantially by region. ONS country averages for April 2026:

• England: £294,000
• Wales: £207,000
• Scotland: £190,000
• Northern Ireland: £185,000

Regional sub-averages move significantly inside England.

London (around £525k)

• 5% deposit: £26,250
• 10% deposit: £52,500
• 15% deposit: £78,750
• Reality: dual income and 4–6 years of saving is typical

South East (around £370k)

• 5% deposit: £18,500
• 10% deposit: £37,000
• 15% deposit: £55,500
• Reality: 3–5 years on a £40,000+ single income with disciplined saving

North West (around £230k)

• 5% deposit: £11,500
• 10% deposit: £23,000
• 15% deposit: £34,500
• Reality: 2–3 years for many first-time buyers

Scotland (around £190k)

• 5% deposit: £9,500
• 10% deposit: £19,000
• 15% deposit: £28,500
• Reality: most affordable UK region, 2–3 years typical

Wales (around £207k)

• 5% deposit: £10,350
• 10% deposit: £20,700
• 15% deposit: £31,050
• Reality: 2–4 years typical

Government schemes that boost the deposit

Lifetime ISA (LISA)

The most powerful UK savings product for first-time buyers.

Mechanics:

• Save up to £4,000/year
• Government adds a 25% bonus (up to £1,000/year)
• Use for a first home purchase or for retirement from age 60
• Property cap: £450,000

Four-year worked example:

• Year 1: £4,000 contribution + £1,000 bonus = £5,000
• Year 2: £4,000 + £1,000 bonus = £10,000 total
• Year 3: £4,000 + £1,000 bonus = £15,000 total
• Year 4: £4,000 + £1,000 bonus = £20,000 total

After 4 years: £20,000 deposit (£16,000 from the saver, £4,000 from HMRC)

Restrictions:

• Must be aged 18–39 to open (contributions accepted until age 50)
• Must be a first-time buyer in the UK
• 25% withdrawal penalty for non-qualifying uses (which can leave the saver worse off than they started — note the asymmetry: 25% in, 25% out, but the 25% out applies to the gross including the bonus)
• Property must cost £450,000 or less

Shared Ownership

Buy a share (typically 25–75%) of a property and rent the remainder.

Mechanics:

• Buy a 25–75% share with a mortgage and deposit on the share only
• Pay subsidised rent on the unsold share (typically around 2.75% of its value annually)
• "Staircase" up to higher percentages over time
• Sell at any point, although the housing association often has first refusal

Example: £200,000 property at 50% share

• Share value: £100,000
• 5% deposit on the share: £5,000
• Mortgage on the share: £95,000
• Plus rent on the remaining £100,000 share

Pros:

• Materially lower initial deposit
• Entry into the market in expensive areas
• Ownership growth over time through staircasing

Cons:

• Rent on the unsold share runs alongside the mortgage payment
• Limited property availability
• Restrictions on sale (housing association approval)
• Sometimes responsible for 100% of repairs even with partial ownership — the lease determines who pays for what

First Homes scheme

A 30–50% discount on selected new-build properties.

Eligibility:

• First-time buyer
• Local connection to the area
• Household income under £80,000 (£90,000 in London)
• Post-discount property price under £250,000 (£420,000 in London)

Example:

• Market value: £250,000
• 30% discount: −£75,000
• Purchase price: £175,000
• 5% deposit at the post-discount price: £8,750 (vs £12,500 at full market value)

Help to Buy equity loan (closed)

Help to Buy closed to new applications on 31 October 2022 (new builds in England) and is no longer available. Existing equity loans continue, including staircasing and redemption options.

How deposit size affects monthly payments

Using a £300,000 property over 25 years at mid-2026 representative rates:

Deposit	LTV	Rate	Monthly payment	Total interest over 25 yrs
£15k (5%)	95%	4.7%	£1,617	£200,100
£30k (10%)	90%	4.3%	£1,470	£171,000
£45k (15%)	85%	4.0%	£1,346	£148,800
£60k (20%)	80%	3.85%	£1,247	£134,100

Savings from 20% vs 5% deposit:

• Monthly: £370 less
• Annually: £4,440 less
• 25 years: £111,000 less in interest

Realistic saving timelines

Saving a £10,000 deposit

On a £25,000 salary (£1,793/month take-home for 2026/27):

• Save £200/month: 50 months (4.2 years)
• Save £300/month: 33 months (2.8 years)
• Save £400/month: 25 months (2.1 years)

With LISA bonus:

• Save £333/month into a LISA (£4,000/year)
• Annual bonus: £1,000
• Total: £5,000/year
• Reach £10,000 in 2 years

Saving a £25,000 deposit

On a £35,000 salary (£2,393/month take-home for 2026/27):

• Save £400/month: 62 months (5.2 years)
• Save £600/month: 42 months (3.5 years)

With LISA bonus and a partner:

• You save £333/month into a LISA
• Partner saves £333/month into a LISA
• Combined contribution: £666/month = £8,000/year
• Combined bonus: £2,000/year
• Total: £10,000/year
• Reach £25,000 in 2.5 years

Saving a £40,000 deposit

Combined £60,000 salary (roughly £4,086/month take-home for 2026/27):

• Save £1,000/month: 40 months (3.3 years)
• Save £1,500/month: 27 months (2.2 years)

With dual LISA + additional savings:

• Both max LISAs: £8,000 contribution + £2,000 bonus = £10,000/year
• Additional £500/month outside the LISAs: £6,000/year
• Total: £16,000/year
• Reach £40,000 in 2.5 years

Deposit saving strategies

1. Open a Lifetime ISA early

• Open before age 40 (eligibility window)
• Contribute up to £4,000/year
• The £1,000/year bonus is the highest-return savings vehicle the UK government offers for first-time buyers

2. Regular saver accounts

Best-published regular saver rates have ranged 5–7.5% over 2025–2026 from current-account providers (First Direct, Nationwide, Principality, Santander). Regular savers cap the monthly deposit (typically £200–£300) but pay rates well above easy-access savings — making them the natural complement to a LISA.

3. Automate the savings

A standing order on payday into the LISA and the regular savers removes the "decide each month" friction. The behavioural research literature consistently shows automated transfers outperform discretionary saving.

4. Side income

Direct any side income to the deposit:

• Freelancing: £200–£500/month
• Tutoring (subject-specific): £300–£600/month
• Selling possessions: one-off £100–£300
• Driving/delivery: £400–£800/month part-time

5. Reduce monthly outgoings

Typical levers:

• Cancel duplicate subscriptions: £20–£40/month
• Meal-prep vs eating out: £100–£200/month
• Mobile contract on a SIM-only plan: £20–£40/month
• Renegotiate broadband/energy: £20–£40/month

6. Windfalls to deposit

Direct unexpected money straight to deposit:

• Tax refunds (HMRC repayments via PAYE)
• Work bonuses
• Inheritance
• Gifts on milestone birthdays

7. Partner contributions

Buying with a partner:

• Split the deposit 50/50 or proportionally to income
• Both open LISAs — two bonuses of £1,000/year stack

8. Gifted deposits from family

UK Finance data has consistently shown around a third of first-time buyers receive family help with the deposit.

• Must be a genuine gift (not a loan)
• Solicitor produces a "deed of gift" letter for the lender
• The lender verifies the source of funds for AML purposes

Using our mortgage calculator

1. Enter your target property price
2. Enter your deposit amount (or %)
3. Select a representative interest rate
4. Choose a term (25–35 years)
5. See:
   • Monthly payment
   • Total interest over the term
   • Total amount repayable
   • Affordability check

Calculate Your Mortgage →

Common deposit mistakes to avoid

Mistake 1: Waiting for the "perfect" deposit

Holding out for 20% while house prices rise typically erodes more buying power than the rate differential gains. With ONS reporting a 3.8% year-on-year increase to April 2026, a one-year delay on a £270,000 target adds about £10,000 to the purchase price.

Mistake 2: Not using a Lifetime ISA

A LISA opened before age 40 and funded at £4,000/year for four years adds £4,000 of free bonus. Missing this is the single highest-cost mistake first-time buyers make.

Mistake 3: Holding all savings in cash

Cash savings lose real-terms value to inflation. CPI sat at 2.8% in mid-2026 (Bank of England); even at the best easy-access rates of around 4.5–5.0%, the real-terms gain is modest. For deposits being built over five years or more, a Stocks & Shares ISA inside a LISA wrapper is a common alternative, with the trade-off of short-term volatility.

Mistake 4: Forgetting other purchase costs

Beyond the deposit, budget for:

• Stamp Duty: £0–£10,000+ (first-time buyer rates: 0% to £300,000, 5% to £500,000)
• Solicitor fees: £1,000–£2,000
• Survey: £400–£1,500
• Moving costs: £500–£1,500
• Mortgage arrangement fee: often £0–£1,500
• Total non-deposit costs: typically £2,000–£8,000

Frequently asked questions

Can I buy with just a 5% deposit?

Yes. 5% deposit mortgages are widely available in mid-2026 (subject to credit and affordability), but typically at rates 0.8–1.0 percentage points above the 60% LTV best-buys. The trade-off is faster entry vs more interest over the term.

How long does it take to save £20,000?

On a £30,000 salary, saving £500/month takes 40 months (3.3 years) without a LISA. With a maxed LISA bonus, the timeline drops to about 3 years. With a partner both using a LISA, about 2 years.

Should I wait for a 20% deposit?

Not necessarily. UK house price growth (3.8% year-on-year to April 2026 per ONS) typically erodes more buying power than the rate differential gains across multi-year waits. Buying with 10–15% often works out better than continuing to save.

Can my parents gift me a deposit?

Yes. The gift must be genuine (not a loan), documented with a solicitor's deed-of-gift letter. The lender will verify the source of funds. Average gifted deposits in the UK in recent years have been £20,000–£25,000.

What if I can only save 5%?

You can still buy. 95% LTV mortgages are widely available, just at higher rates than lower-LTV products. A LISA can accelerate the saving rate by 25%.

Does Lifetime ISA money count as my deposit?

Yes. LISA funds (your contributions plus the 25% bonus) can be transferred directly to the solicitor for a first-home purchase, provided the property costs £450,000 or less and you are a first-time buyer.

How much deposit do I need in London?

With average prices around £525,000, expect £26,250 (5%) to £105,000 (20%). Most London first-time buyers combine dual incomes with 4–6 years of saving plus, frequently, a gifted deposit.

Can I still use Help to Buy?

No new applications since 31 October 2022. Existing equity-loan holders can still staircase, redeem, or sell. The current alternatives are Shared Ownership and First Homes.

Related resources

• Mortgage Calculator — calculate monthly payments
• Mortgage Affordability Guide — how much you can borrow
• First-Time Buyer Stamp Duty Relief — save up to £5,000 (post-1-April-2025 rates)
• Stamp Duty Calculator 2026 — calculate property tax

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Official sources:

• GOV.UK: Lifetime ISA
• GOV.UK: Shared Ownership
• GOV.UK: First Homes scheme
• MoneyHelper: Saving for a Deposit
• ONS: Private rent and house prices, UK

Last updated: 24 June 2026. Reflects April 2026 ONS UK average property price of £270,000, current Bank of England base rate of 3.75%, and post-1-April-2025 stamp duty thresholds (£300,000 FTB nil-rate band, £500,000 FTB cap, max FTB saving £5,000).

Disclaimer: Deposit requirements, scheme eligibility, and rates are subject to change. Lifetime ISA penalties apply to non-qualifying withdrawals. Mortgage availability depends on credit profile and affordability assessment. UK Calculator provides information and tools and is not a mortgage or financial adviser.