How much deposit do I need to buy a house?


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If you’re planning to buy your first home, you’ll know the first step is saving for a deposit. Find out how to get started with our simple guide to mortgage deposit requirements.

How much deposit do I need in percentage terms?      

With economic uncertainty prompting many lenders to end their low-deposit deals, first-time buyers could now be looking at a mortgage deposit of at least 10% of the value of their first home.

But there is good news too. Until March 2023, first-time buyers with a 5% deposit can make use of the Government’s Help to Buy scheme. Through this scheme, you could receive a 20% equity loan (interest-free for five years) towards the value of your new-build home, meaning you’ll then simply need to secure a mortgage for the reaming 75%.

You can find out more about the Government-backed Help to Buy scheme here.

How much deposit do I need in cash terms?      

When working out how much you’ll need to save for your mortgage deposit in cash terms, there are two main things to bear in mind:

  • Typical property prices in the area you’re looking to buy in

Property portals like Rightmove or Zoopla will give you a good idea of local house prices, as will talking to local estate agents. But remember that the figures they’ll give you are asking prices – the properties may in fact be worth slightly less or more. If you want more reliable information, the Land Registry will tell you how much houses in the area have recently sold for.

Land Registry price paid tool

  • What you can afford in repayments each month

Mortgage rates are constantly changing. And while the cheapest rate might look the most attractive, beware – it may not necessarily be the best deal for you. There are several other factors to consider, such as minimum and maximum terms, upfront fees, and early repayment charges. If the repayments on a low-deposit mortgage are too high for you, then you’ll need to either get a bigger deposit together or look into schemes like Help to Buy.

Help to Buy scheme

Should I save a bigger mortgage deposit?

Although the mortgage deposit minimum is 5%, if you can save that bit more there are five main ways you’ll benefit:

  1. Your monthly repayments will be lower

It’s a bit of a no-brainer, but the bigger the deposit you can find, the smaller your loan will be. And the smaller the loan, the lower your monthly repayments.

  • You’ll get a better mortgage deal

Putting down a bigger deposit will make you less of a risk for lenders. So they’ll often be prepared to offer you lower interest rates.

  • There’s more chance you’ll be accepted

All lenders carry out checks as to whether you can afford your mortgage repayments, taking into account your income and outgoings. If your deposit is small, you’re more likely to fail these checks, as you’ll need to put more money into your mortgage each month.

  • You’ll have a bigger buying budget

A mortgage is typically up to four-and-a-half times your salary. If this means you can’t borrow as much as you’d like, you may need a bigger deposit just to make up the value of the property.

  • You’ll be at less risk of ‘negative equity’

The more of your home you own outright, the less chance you have of falling into ‘negative equity’. That is when you owe more on your mortgage than your property is currently worth – which can make it very difficult for you to move house or switch mortgage.

Get a clearer picture with our Help to Buy calculator

Getting together a deposit may seem like an uphill struggle. But we’re here to help.

For an idea of how the Help to Buy scheme could work for you, and when you’ll have saved enough of a deposit to buy a home, just tap a few details into our simple calculator.

Help to Buy calculator