Your mortgage deposit affects how much you need to borrow, but it is not the only number that matters.
A larger deposit can sometimes open up more choice, reduce your loan-to-value and lower the mortgage amount needed. However, putting down every pound you have is not always the right move if it leaves you short for legal fees, moving costs, furniture or emergency savings.
This guide explains how mortgage deposits work, what 5%, 10% and 15% could look like, and how to balance your deposit with the wider cost of buying a home.
What to know about mortgage deposits
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Your deposit changes the loan-to-value
The more you put in upfront, the lower your mortgage balance may be.
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A larger deposit may improve choice
Moving into a lower loan-to-value band can sometimes widen lender or product options.
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Affordability still matters
Income, debts, credit commitments and regular spending can all affect how much a lender may offer.
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Keep money back for buying costs
Legal fees, surveys, moving costs, mortgage fees and property taxes may need to be budgeted for separately.
Unsure how far your deposit could go?
What is a mortgage deposit?
A mortgage deposit is the amount you contribute towards the property purchase price.
The mortgage usually covers the remaining balance. For example, if you buy a property for £300,000 with a £30,000 deposit, you would need a £270,000 mortgage.
This means you are putting down 10% of the property price and borrowing the remaining 90%.
Your deposit may come from savings, family support, a Lifetime ISA, inheritance, the sale of another property or another acceptable source. Your lender and solicitor will usually need to confirm where the money has come from.
Typical deposit amounts by property price
Many buyers need at least 5% to 10% of the property price as a deposit, although the right amount depends on the property, mortgage route and wider budget.
Typical examples might look like this:
Property price
5% deposit
10% deposit
15% deposit
£200,000
£10,000
£20,000
£30,000
£250,000
£12,500
£25,000
£37,500
£300,000
£15,000
£30,000
£45,000
£400,000
£20,000
£40,000
£60,000
A 5% deposit may be enough for some buyers. A larger deposit can reduce the amount you need to borrow and may improve your mortgage options.
Your deposit is only one part of your buying budget. Check how much you could borrow with our affordability calculator →
How deposits and loan-to-value work
Loan-to-value, often called LTV, compares the mortgage amount with the property value.
For example, a 5% deposit usually means a 95% LTV mortgage. A 10% deposit usually means a 90% LTV mortgage.
Simple examples:
Deposit
Mortgage share
Loan-to-value
5%
95% of the property price
95% LTV
10%
90% of the property price
90% LTV
15%
85% of the property price
85% LTV
25%
75% of the property price
75% LTV
Want to see your own deposit and LTV? Check your own figures with our loan-to-value calculator →
How your deposit can affect your mortgage options
Your deposit affects your loan-to-value, which can influence the mortgage options, rates and monthly payments available to you.
A larger deposit may help with:
- a lower mortgage amount
- a lower loan-to-value band
- more lender or product options
- potentially lower monthly repayments
- more equity from the start
A smaller deposit may still work if buying sooner matters, but it can mean:
- Fewer lender options
- Higher monthly repayments
- Stricter affordability checks
- More risk if property values fall
The right deposit is not always the biggest one possible. It is about balancing the deposit you can save, the monthly payment and the money you need to keep back for buying and moving costs.
Other upfront costs to budget for
It is easy to focus only on the deposit, but buying a home can involve other upfront costs too.
Your deposit goes towards the property purchase. Other costs may need to be paid separately, either before completion or around the time you move.
Costs to plan for may include:
- solicitor or conveyancing fees
- property searches
- survey or valuation costs
- mortgage product or arrangement fees
- moving costs
- insurance
- property taxes, where applicable
- furniture, repairs or setup costs after moving in
This is why using every pound of savings as your deposit is not always the right move. A larger deposit can help, but keeping a cash buffer can make the move feel more manageable.
Is a 5% deposit enough?
A 5% deposit can be enough for some buyers, usually through a 95% loan-to-value mortgage.
It may help you buy sooner if saving a larger deposit would take longer. The trade-off is that you are borrowing more of the property value, which can affect monthly repayments, lender choice and rates.
For some buyers, a 5% deposit is a realistic starting point. For others, saving a little more could improve the overall mortgage position.
Explore 95% mortgage options →
How to set a realistic deposit target
A useful deposit target is not always one single number. It can help to think about it in three parts.
01
Your minimum deposit
This is the amount you may need to access a mortgage, subject to lender criteria and affordability.
For some buyers, this could be 5% of the property price. Others may need more depending on the property, income, credit profile or mortgage type.
02
Your preferred deposit
This is the level that may give you a better balance between lender choice, monthly repayments and savings left over.
For example, moving from a 5% to 10% deposit may improve your options, but waiting longer still needs to make sense.
03
Your upfront cost buffer
This is the money you keep aside for the other costs of buying and moving.
A buffer can help cover legal fees, surveys, moving costs, mortgage fees, tax and early costs after completion.
The right deposit target should help you buy with enough left aside for the costs that come next.
What could your deposit unlock?
Not sure whether your deposit is enough? Muttuo can help you compare lender options, affordability and next steps.
Where can your mortgage deposit come from?
A deposit does not always come from one savings account. Some buyers use a mix of savings, family support, sale proceeds or other accepted sources.
Common deposit sources can include:
- personal savings
- Lifetime ISA savings
- gifted deposits from family
- inheritance
- sale proceeds from another property
- equity from an existing home
- bonuses or additional income
- selected government or homebuying schemes
If your deposit is gifted or borrowed, the lender will usually need to understand the arrangement. A genuine gift is usually treated differently from money that needs to be repaid.
What lenders may need to see
Lenders and solicitors usually need to confirm where your deposit has come from as part of the mortgage and legal process.
Depending on your deposit source, they may ask for:
- bank statements showing your savings
- Lifetime ISA statements, if relevant
- a gifted deposit letter
- proof of ID from the person gifting money
- evidence of inheritance or property sale proceeds
- details of any borrowed funds
Keeping your deposit source clear and easy to evidence can help the process run more smoothly.
Should you save a larger deposit before applying?
Saving a larger deposit can reduce the amount you need to borrow and may improve your mortgage options.
However, waiting longer is not always the better route. For some buyers, moving with a smaller deposit may make sense if the mortgage is affordable and the timing works.
It can help to compare:
- how much extra deposit you could realistically save
- whether saving more could improve your loan-to-value band
- how long it would take to reach the next deposit level
- whether waiting could affect the type of home you want to buy
- how much cash you need to keep back for fees, moving costs and emergencies
The right deposit target should help you buy with enough left aside for the costs that come next.
Deposit routes to compare
Different buyers may need different deposit routes.
First-time buyers
First-time buyers may be able to buy with a 5% or 10% deposit, depending on lender criteria and affordability.
- Lifetime ISA savings may help eligible buyers
- Gifted deposits or shared ownership could also support some buyers
Home movers
Home movers often use equity from their current property as the deposit for their next home.
- The available deposit depends on the sale price and mortgage balance
- Moving costs and fees may reduce how much is left to use
Buyers with gifted deposits
A gifted deposit could help if family are able to support your purchase.
- Lenders usually need proof the money is a gift
- The person gifting may need to provide ID and evidence of funds
Buyers with lower deposits
Some buyers may still have mortgage options with a smaller deposit.
- A lower deposit can mean fewer lender options
- Rates, repayments and affordability checks may be affected
Shared ownership buyers
Shared ownership can reduce the deposit needed because you buy a share of the property.
- The deposit is usually based on the share you buy
- Rent, service charges and future staircasing costs may apply
New-build buyers
New-build buyers may have different deposit options depending on the property, lender and developer scheme.
- Some new-build routes may support buyers with smaller deposits
- Builder incentives, lender criteria and property type need to be checked
How Muttuo Mortgages can help
Your deposit can shape your mortgage options, but it is only one part of the application.
Muttuo Mortgages can help you:
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compare mortgage options from over 100 lenders
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understand how your deposit affects loan-to-value
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check whether a 5%, 10% or larger deposit route may work
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review gifted deposits, family support or other deposit sources
Whether you already have a deposit ready or you are working out what you may need, Team Muttuo can help you understand your options before you apply.
See what your deposit could unlock
Not sure whether your deposit is enough? Muttuo can help you compare lender options, affordability and next steps.
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Mortgage deposit FAQs
These FAQs answer common questions about mortgage deposits, including how much you may need, whether 5% is enough, what lenders may check and whether you should keep money aside for other costs.
How much deposit do I need for a mortgage?
Many buyers need at least 5% to 10% of the property price.
The exact amount depends on the lender, mortgage product, property type and your circumstances. A larger deposit may improve your mortgage options, but some buyers may be able to buy with a smaller deposit.
Can I get a mortgage with a 5% deposit?
Yes, some buyers may be able to get a mortgage with a 5% deposit.
This usually means borrowing 95% of the property value. Lenders will still check affordability, income, credit history, commitments and the property before deciding whether to offer a mortgage.
Is a 10% deposit better than a 5% deposit?
A 10% deposit may give you more mortgage choice than a 5% deposit.
It can reduce the amount you need to borrow and may lower your monthly repayments. However, whether it is worth waiting to save more depends on your property plans, affordability and timescale.
Can my deposit be gifted by family?
Yes, many lenders accept gifted deposits from family.
The lender will usually need a gifted deposit letter confirming the money is a gift and does not need to be repaid. The source of the funds may also need to be checked.
Do lenders check where my deposit comes from?
Yes, lenders and solicitors usually check the source of your deposit.
You may need to provide bank statements, proof of savings, gifted deposit documents or evidence of inheritance or sale proceeds.
Can I borrow my deposit?
Borrowing a deposit can make getting a mortgage more difficult.
If the deposit is a loan, lenders may treat the repayment as a financial commitment. This could affect affordability and may limit your mortgage options.
Do legal fees come out of my deposit?
Legal fees are usually separate from your deposit.
Your deposit goes towards the property purchase. Legal fees usually cover the work carried out by your solicitor or conveyancer, including searches, checks and handling the transfer of ownership.
You may also need to budget separately for surveys, mortgage fees, moving costs and property taxes. This is why your total savings target should include more than the deposit alone.
Should I use all my savings as a deposit?
Not always.
Using a bigger deposit may reduce the amount you borrow, but you may still need money for legal fees, surveys, moving costs, repairs, furniture and an emergency buffer. It is worth checking the full cost of buying before using all your savings.
Should I save more deposit or pay off debt first?
It depends on your situation.
Reducing debt may help if loans, credit cards, car finance or other commitments are limiting how much a lender thinks you can afford. However, using too much of your savings to clear debt could leave you short for your deposit, fees or moving costs.
The right approach depends on your income, debts, savings, property target and timescale. A mortgage adviser can help you understand which route may make the biggest difference before you apply.
Does a bigger deposit mean a better mortgage rate?
A bigger deposit can sometimes help you access more competitive mortgage rates, but it is not the only factor.
Lenders will also consider your income, credit history, affordability, property type and the mortgage product available at the time you apply.
