# Mortgage Deposits

> How much deposit you need for a mortgage, how it affects your interest rate, and the ways people build or boost a deposit.

Canonical page: [/mortgages/mortgage-deposits](/mortgages/mortgage-deposits/) · Last reviewed: 2026-08-22

Your deposit is the share of a property’s price you pay upfront. The larger it is, the smaller your loan-to-value and, usually, the better the rates you can access.

## Key information

- You normally need at least 5% of the property price as a deposit
- A bigger deposit means a lower loan-to-value and often a lower interest rate
- A Lifetime ISA can add a 25% government bonus towards a first home
- Gifted deposits are allowed by many lenders but must be properly documented

## How much you need

Most lenders expect a deposit of at least 5% of the purchase price, and some deals require 10% or more. The rest is covered by your mortgage. A property costing £200,000 would need a £10,000 deposit at 5%, or £20,000 at 10%.

The size of your deposit sets your loan-to-value (LTV). A 5% deposit is a 95% LTV mortgage; a 25% deposit is a 75% LTV mortgage. Lower LTVs are seen as lower risk by lenders, which is why they usually come with better interest rates.

## Why a bigger deposit helps

Beyond opening up cheaper rates, a larger deposit means you borrow less overall and pay less interest across the life of the mortgage. It can also give you more of a cushion against falls in house prices, reducing the risk of ending up in negative equity, where the loan is larger than the home is worth.

## Building or boosting a deposit

People build deposits in different ways. [A Lifetime ISA](/mortgages/lifetime-isa) adds a 25% government bonus (up to £1,000 a year) for eligible first-time buyers, on a home worth £450,000 or less. Many lenders also accept a gifted deposit from a close family member, though they will ask for written confirmation that it is a gift and carry out anti-money-laundering checks.

## Your rights

- Lenders must be clear about the deposit and loan-to-value required for each product.
- A Lifetime ISA bonus is subject to Government rules, including a withdrawal charge if you take the money out for anything other than a qualifying first home or retirement — check the rules before you save.
- If a deposit-linked product is mis-sold or mishandled you can complain and, if needed, contact the Financial Ombudsman Service.

## Official sources

- [GOV.UK — Lifetime ISA](https://www.gov.uk/lifetime-isa)
- [MoneyHelper — Mortgages](https://www.moneyhelper.org.uk/en/homes/buying-a-home)

## Related

- [First-Time Buyer Mortgages](/mortgages/first-time-buyer-mortgages/)
- [Mortgage Affordability](/mortgages/mortgage-affordability/)
- [Savings Accounts](/banking-savings/savings-accounts/)
- [Mortgage Calculator](/tools-calculators/mortgage-calculator/)

## Sources

- GOV.UK — [Lifetime ISA](https://www.gov.uk/lifetime-isa) (accessed 2026-08-22)
- MoneyHelper — [How much deposit do you need for a mortgage?](https://www.moneyhelper.org.uk/en/homes/buying-a-home/how-much-deposit-do-you-need-for-a-mortgage) (accessed 2026-08-22)