How Much Deposit Do I Need to Buy a House? UK 2026 Guide

Your deposit size significantly affects what you can borrow, your interest rate, and your monthly payments. Here’s everything you need to know about house deposits in 2026.

Minimum Deposit Requirements

Residential Mortgages

Deposit Size	LTV	Availability	Typical Rate
5%	95%	Limited lenders	Highest rates
10%	90%	Most lenders	High rates
15%	85%	All lenders	Better rates
20%	80%	All lenders	Good rates
25%	75%	All lenders	Best rates
40%+	60%	All lenders	Lowest rates

Buy-to-Let Mortgages

Deposit Size	LTV	Availability
25%	75%	Minimum required
40%	60%	Better rates
50%+	50%	Best rates

How Deposit Size Affects Your Rate

Example: £250,000 House Purchase

Deposit	Deposit Amount	LTV	Typical Rate	Monthly Payment*
5%	£12,500	95%	5.5%	£1,348
10%	£25,000	90%	4.8%	£1,216
15%	£37,500	85%	4.4%	£1,146
20%	£50,000	80%	4.2%	£1,076
25%	£62,500	75%	3.9%	£1,005

*25-year repayment mortgage, rates illustrative for 2026

Total Cost Over Mortgage Term

Deposit	Loan Amount	Rate	Total Repaid	Interest Paid
5%	£237,500	5.5%	£404,400	£166,900
10%	£225,000	4.8%	£364,800	£139,800
15%	£212,500	4.4%	£343,800	£131,300
20%	£200,000	4.2%	£322,800	£122,800
25%	£187,500	3.9%	£301,500	£114,000

Difference between 5% and 25% deposit: £52,900 less interest over the term.

Deposit by Property Type

Different Requirements

Property Type	Minimum Deposit	Recommended
Standard house	5%	10-15%
New build house	5-10%	15%+
New build flat	10-15%	20%+
Ex-council	5-10%	15%+
Non-standard construction	15-25%	25%+
Listed building	10-15%	20%+

New Builds Require More

Lenders are cautious with new builds because:

• Initial value may drop (new build premium)
• Build quality uncertain
• Developer incentives can distort value

First-Time Buyer Options

Standard 5% Deposit Mortgages

Available from most major lenders:

• Barclays
• NatWest
• Nationwide
• Halifax
• Santander

Help to Buy Alternatives

With Help to Buy closed, consider:

Scheme	What It Offers
Lifetime ISA	25% bonus on savings up to £4,000/year
Shared Ownership	Buy 25-75% initially
First Homes	30-50% discount for local first-timers
Rent to Buy	Rent at reduced rate while saving

Lifetime ISA (LISA)

Feature	Details
Annual limit	£4,000
Government bonus	25% (£1,000 max/year)
Total by age 50	£33,000 contribution + £8,250 bonus
Property limit	£450,000
Penalty if not used for property	25% on withdrawals

Example: Save £4,000/year for 5 years = £20,000 + £5,000 bonus = £25,000 deposit.

Where Your Deposit Can Come From

Acceptable Sources

Source	Accepted?	Evidence Needed
Personal savings	Yes	Bank statements
Gift from family	Yes	Gift letter + their bank statements
Inheritance	Yes	Probate documentation
Sale of another property	Yes	Completion statement
Lifetime ISA	Yes	LISA statements
Bonus at work	Yes	Payslip showing bonus
Savings from salary	Yes	Bank statement trail

Unacceptable Sources

Source	Generally Not Accepted
Borrowed money (loan)	No — it’s debt, not deposit
Credit card advances	No
Gambling winnings	Rarely without extensive documentation
Cryptocurrency (sometimes)	Varies by lender
Unknown cash sources	Must be traceable

Gifted Deposits

Most lenders accept gifts from immediate family:

Requirement	Details
Gift letter	Confirming it’s a gift, not a loan
No repayment	Must not need to be repaid
Donor ID	Proof of identity
Fund source	Origin of donor’s money
Common donors	Parents, grandparents

Template requirements for gift letter:

• Donor’s full name and address
• Confirmation amount is a gift
• Statement no repayment expected
• Donor’s signature
• Usually witnessed

How to Save a Deposit Faster

Monthly Savings Target

Property Price	5% Deposit	Save Over
£150,000	£7,500	3 years @ £208/month
£200,000	£10,000	3 years @ £278/month
£250,000	£12,500	3 years @ £347/month
£300,000	£15,000	3 years @ £417/month
£400,000	£20,000	4 years @ £417/month

Best Savings Strategies

Strategy	Effect
LISA	25% free bonus
Regular saver accounts	5-7% interest
Cut unnecessary spending	Faster saving
Increase income	Side jobs, overtime
Live with parents	Save on rent
Government schemes	Additional support

What to Save In

Account Type	Best For
Lifetime ISA	1+ years until purchase
Regular saver	Disciplined monthly saving
Easy access saver	Short-term, flexibility needed
Cash ISA	Tax-free growth
Fixed rate bond	Guaranteed sum, fixed date

Don’t Forget Other Costs

Your deposit isn’t your only expense. Budget for:

Cost	Typical Amount
Stamp duty (if applicable)	Varies (none for FTBs under £425,000)
Solicitor fees	£1,000-£2,000
Survey	£250-£1,500
Mortgage fees	£0-£2,000
Moving costs	£300-£2,000
Furnishing	Variable
Initial repairs	Variable

Rule of thumb: Budget deposit + £3,000-5,000 for other buying costs.

Deposit Size Decision

When 5% Makes Sense

✅ First-time buyer wanting to get on ladder ✅ Confident income will increase ✅ Plan to overpay or remortgage to lower LTV ✅ Market conditions favour buyers

When to Save More

✅ Can wait 1-2 years to save more ✅ Want lower monthly payments ✅ Prefer financial security ✅ Buying new build (often need 10-15% anyway)

Key Takeaways

Point	Detail
Minimum	5% for most, 10-15% for some properties
Ideal	10-15% balances rate vs waiting time
Best rates	25%+ deposit
Buy-to-let	25% minimum
First-time buyers	Use LISA for 25% bonus
Don’t forget	Other buying costs need budget too