Mortgages
Mortgage Deposits
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
On this page
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 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 & protection
- 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.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- GOV.UK, Lifetime ISA (opens in a new tab). Accessed 22 Aug 2026.
- MoneyHelper, How much deposit do you need for a mortgage? (opens in a new tab). Accessed 22 Aug 2026.