How much deposit do I need for a mortgage?
Most UK lenders want a deposit of at least 5% of the purchase price, which is a 95% loan-to-value mortgage. You can buy with 5%, but a 10% or larger deposit opens more lenders and lower rates because lenders price by loan-to-value. The deposit sets your rate; how much you can borrow on top depends on your income and outgoings.
How loan-to-value works
Loan-to-value (LTV) is the mortgage as a percentage of the property value. Put down 5% and you borrow 95%; put down 25% and you borrow 75%. Lenders set their rates in LTV bands, and the rate usually improves as you cross thresholds like 90%, 85%, 80% and 75%. That is why even a small increase in deposit, if it tips you into a better band, can noticeably cut your rate.
What deposit to aim for
- 5%: the usual minimum, a 95% mortgage. Fewer lenders, higher rates.
- 10%: a clear step up in choice and pricing over 5%.
- 15% to 25%: access to most of the market and the better rate bands.
- 40% or more: typically the lowest rates a lender offers.
Remember the other costs
The deposit is not the only upfront cost. Budget separately for any stamp duty (with first-time-buyer relief in some cases), legal fees, a survey and possible lender or broker fees. Keeping a buffer back rather than spending every penny on the deposit is sensible.
Common questions
What is the minimum deposit?
For most residential mortgages the minimum is 5% of the purchase price, which is a 95% loan-to-value mortgage. Some specialist or new-build situations need more, and a few schemes lower the effective entry cost, but 5% is the usual floor.
Why does a bigger deposit help?
Lenders price by loan-to-value (LTV), the loan as a percentage of the property value. Rates step down at thresholds such as 90%, 85%, 80% and 75% LTV. A larger deposit lowers your LTV, which usually means a wider choice of lenders and a cheaper rate.
Does the deposit affect how much I can borrow?
They are separate. The deposit sets your LTV and rate; how much you can borrow on top is driven by your income and outgoings through the lender's affordability test. You need both to work for the purchase to add up.
Can the deposit be a gift?
Yes. A gifted deposit from close family is widely accepted, with a short letter confirming it is a gift and not a loan. See the gifted deposit guide for the detail lenders ask for.
No 5% saved? Family may be able to help: see gifted deposit, 95% mortgages or shared ownership.
Founder, MortgageExplained, MortgageExplained
Adam spent nearly a decade as a mortgage adviser at Just Mortgages, with further experience in commercial finance. He is CeMAP and CF qualified. He built MortgageExplained to do one thing well: explain mortgages in plain English, then introduce you to a regulated broker when you are ready. Every page is written and reviewed by Adam.
Last reviewed: 29 June 2026