The deposit is the wall most first-time buyers have to climb, and the figure people quote, "you need 10%", hides a more useful truth. The minimum to get a mortgage is lower than that, but a bigger deposit unlocks dramatically better rates, which can matter more than the deposit itself. Knowing the tiers, and what each one buys you, helps you decide whether to keep saving or to buy now. Here is the honest picture for 2025.
The short version
The short version
- The minimum deposit for most mortgages is 5% of the property price.
- 10% opens up far more deals and better rates; 25%+ gets you the cheapest rates.
- A bigger deposit lowers your loan-to-value (LTV), which is what really drives your interest rate.
- On a £250,000 home, 5% is £12,500, 10% is £25,000 and 25% is £62,500.
The deposit tiers
Lenders price mortgages by loan-to-value, the percentage of the property's value you are borrowing. The less you borrow relative to the price, the lower the risk to the lender, and the better the rate you are offered. Your deposit sets your LTV.
| Deposit | Loan-to-value | What it gets you |
|---|---|---|
| 5% | 95% | The minimum, fewer deals, highest rates |
| 10% | 90% | A solid step up in choice and pricing |
| 15% | 85% | Noticeably better rates |
| 25%+ | 75% or less | The cheapest rates lenders offer |
On a £250,000 home that means £12,500 at 5%, £25,000 at 10% and £62,500 at 25%. The deposit calculator works out the figure for any price and shows how long it takes to save at your rate.
Key figure
Why a bigger deposit can beat a bigger salary
Here is the part that surprises people. The jump from a 95% to a 90% mortgage, or 90% to 85%, can cut your interest rate meaningfully, and on a mortgage of a couple of hundred thousand pounds, even a small rate difference changes your monthly payment by a lot. Pushing your deposit over the next LTV threshold (say, from 8% to 10%) can save you more over the mortgage term than the extra deposit cost you. The mortgage calculator lets you compare the monthly payment at different rates so you can see the effect.
The total cash you actually need
The deposit is not the only upfront cost, and forgetting the rest is a classic mistake:
Budget for the deposit plus these, or you will be caught short close to completion.
How to build the deposit faster
Open a Lifetime ISA, for a first home up to £450,000, the government adds a 25% bonus on up to £4,000 a year. Free money toward your deposit. Check the rules with the [Lifetime ISA calculator](/lifetime-isa-calculator).
Automate the saving, a standing order on payday into a separate account removes the temptation to spend it.
Aim for the next LTV threshold, not a round number, crossing 90% or 85% is where the rate savings kick in.
Clear expensive debt first, it both improves your mortgage affordability and frees up cash to save.
Watch out
Don't drain every penny into the deposit Putting your entire savings into the deposit leaves nothing for the other buying costs, moving, or the inevitable early repairs and furnishings. Keep a buffer, a slightly smaller deposit with an emergency fund intact is usually wiser than a marginally lower rate and no savings.
Questions
Frequently asked questions
The minimum is usually 5% of the property price, but 10% or more opens up far better mortgage rates. On a £250,000 home that is £12,500 at 5% or £25,000 at 10%.
Often yes. A bigger deposit lowers your loan-to-value, which can cut your interest rate enough to save more over the mortgage term than the extra deposit cost you.
The percentage of the property's price you are borrowing. A £25,000 deposit on a £250,000 home is a 90% loan-to-value. Lower LTV means lower risk to the lender and cheaper rates.
Yes. For a first home up to £450,000, the government adds a 25% bonus on up to £4,000 a year paid into a Lifetime ISA, a meaningful boost to a deposit.
Stamp duty (above £300,000 for first-time buyers), legal and survey fees, possible mortgage fees, and moving costs. Budget for these on top of the deposit.
Figures are 2025/26 estimates and illustrative. Rates and lender criteria vary, treat the calculators as a guide and consider mortgage advice.