First-Time Buyer Deposit (2026): How Much You Actually Need
Here’s the myth that stops people buying: you do not need a 20% deposit. The minimum for a first-time buyer is just 5% — that’s £12,500 on a £250,000 home, not £50,000. Overestimating the deposit delays purchases every day. Here’s what you really need, and why a bit more can still help.
Not sure how big a deposit you really need? Let’s find out.
nextmove introduces you to FCA-regulated, whole-of-market brokers who’ll tell you the real number for your situation. We introduce; they advise. Free.
Get matched with a broker →★★★★★ Free · Independent · No obligation
Quick answer
The minimum deposit a first-time buyer needs in the UK is 5% of the property’s price — so £12,500 on a £250,000 home, or £15,000 on a £300,000 one. That’s the floor, and 95% mortgages (where you borrow the other 95%) are widely available, currently at their highest level in almost 20 years. You do not need the 20% deposit many people believe is required — that figure comes from the average deposit first-time buyers actually pay (around £61,000), which is inflated by those who choose or can afford to put down more. The gap between the 5% you need and the 20% people think they need causes many would-be buyers to delay unnecessarily. That said, while 5% is the minimum, putting down more genuinely helps: a bigger deposit means a lower loan-to-value (LTV), which unlocks better interest rates and more lender choice, with meaningful improvements at the 90%, 85% and 75% thresholds. For most first-time buyers, 10% is a sensible target, and 10–15% is the practical sweet spot balancing what you can save against the rates you’ll access. Remember too that the deposit isn’t your only upfront cost — budget an extra £3,000–£6,000 or so for solicitors, surveys and (above £300,000) stamp duty. This page explains how much you really need; for what buyers typically pay and how to save it, we point you to the detail. This is general information, not advice. As of September 2026.
In this guide
The 5% minimum (and the 20% myth)
Let’s clear up the single biggest misconception in first-time buying. The minimum deposit for a first-time buyer is 5% of the property’s purchase price — not 10%, not 20%. Mortgages where you borrow 95% of the value (called 95% LTV mortgages) are widely available in 2026, with the number of low-deposit products at their highest in almost two decades. So why do so many people think they need 20%? Because that’s roughly the average deposit first-time buyers actually put down — around £61,000 according to lender data — but that average is pulled up by buyers who choose to put down more, who received family help, or who live in expensive areas like London (where the average is far higher). The average is what people pay; the 5% is what you need. This distinction genuinely matters: research and industry data show that many would-be first-time buyers delay their purchase by overestimating the deposit they need, spending extra years renting while they save for a 20% deposit that was never required. If you’ve been holding off because 20% feels impossible, the good news is that the real threshold is a quarter of that. For what buyers typically pay across regions and age groups, see our guide to the average house deposit — but don’t mistake the average for the minimum.
What a deposit looks like in pounds
The 5% minimum, and 10–15%, across typical first-home prices
Seeing the actual pounds makes it far less daunting. Here’s what different deposit percentages come to across common first-time buyer prices:
| Property price | 5% (minimum) | 10% | 15% |
|---|---|---|---|
| £150,000 | £7,500 | £15,000 | £22,500 |
| £200,000 | £10,000 | £20,000 | £30,000 |
| £250,000 | £12,500 | £25,000 | £37,500 |
| £300,000 | £15,000 | £30,000 | £45,000 |
So for a typical £250,000 first home, the minimum deposit is £12,500 — a serious sum to save, but a world away from the £50,000 a “20% deposit” would require. For a more affordable £150,000 flat, just £7,500 gets you over the 5% line. If even 5% is out of reach, there are routes with lower or no deposit — see our guide to no-deposit mortgages — and for the deposit maths on a specific price, our deposit for a £250k house guide breaks one price point down in full. The key point: work out 5% of the homes you’re realistically looking at, and that’s your genuine starting target — not some inflated figure.
Why putting down more helps
While 5% is the minimum, it’s worth understanding why saving a little more — if you can — pays off, so you can make an informed choice rather than assuming you must hit 5% and stop, or must reach 20%. It comes down to loan-to-value (LTV) bands: lenders price mortgages by how much you’re borrowing as a percentage of the property value, and the best rates go to lower LTVs. The improvements are stepped:
- 5% deposit (95% LTV): the entry point. Rates are the highest available (often around 1–1.5% above the best deals) and fewer lenders operate here, so choice is more limited — but it gets you on the ladder.
- 10% deposit (90% LTV): a significant improvement. You access most mainstream lenders and rates drop considerably. This is why 10% is a popular target.
- 15% deposit (85% LTV): another meaningful step down in rates and wider product choice.
- 25% deposit (75% LTV): where the most competitive rates live — though few first-time buyers reach this, and you certainly don’t need to.
The takeaway isn’t “save 25%” — it’s that if you’re close to the next band (say you have 8% and could stretch to 10%), that extra can be worth it for the rate. But equally, if you have 5% and are ready to buy, waiting years to save more while paying rent and watching prices rise often isn’t worth it. It’s a balance, and the right answer depends on your circumstances, which is exactly what a broker helps you weigh up. Understanding your loan-to-value is the key to seeing where you stand.
Want to know the real deposit for the homes you’re eyeing?
A whole-of-market broker gives you the actual number and the rates each deposit unlocks. Get matched, free.
Get matched with a broker →★★★★★ Free · Independent · No obligation
Deposit and income work together
One thing that surprises first-time buyers: your deposit alone doesn’t determine what you can buy — it works alongside your income. Lenders decide how much you can borrow primarily on affordability, typically lending 4 to 4.5 times your income (some specialist lenders up to 5.5×). Your deposit then adds to that borrowing to set your total budget. For example, if you earn £40,000 and a lender offers 4.5× income, you can borrow around £180,000. With a 5% deposit of about £9,500, that’s a property budget of roughly £189,500; with a 10% deposit of £20,000, around £200,000. So a bigger deposit does increase the property value you can reach — but only in combination with what your income allows you to borrow. This is why the honest answer to “how much deposit do I need” is always “it depends on the property and your income” — and why working it out properly, rather than guessing, matters. Our guide to how much you can borrow covers the income side, and together with your deposit it gives you your real budget.
Beyond the deposit: the other costs
A crucial point often missed: the deposit isn’t the only cash you need upfront. Budgeting only for the deposit and forgetting the extras is a common trap. On top of your deposit, set aside roughly £3,000–£6,000 for:
- Stamp duty — though first-time buyers pay nothing on homes up to £300,000, and only 5% on the portion above that up to £500,000. See first-time buyer stamp duty.
- Solicitor / conveyancing fees — typically £1,000–£2,500 for the legal work.
- Survey — £400–£1,000 depending on the level of survey.
- Mortgage and valuation fees — some lenders charge product or booking fees.
- Moving costs — removals, and any furniture for your new home.
The good news for first-time buyers is that the stamp duty exemption up to £300,000 removes what is otherwise buyers’ biggest extra cost. Factor the rest into your savings plan so completion day doesn’t bring a nasty surprise — our full breakdown of the cost of buying a house lists every charge.
How to reach your deposit
Once you know your real target (5% of your price range, ideally stretching toward 10%), here are the main routes to get there:
- Lifetime ISA. The single best tool for most first-time buyers: save up to £4,000 a year and the government adds a 25% bonus — up to £1,000 free per year. Over four years that’s £4,000 of free money toward your deposit. See our Lifetime ISA guide.
- A gifted deposit. Around half of first-time buyers get some family help. A gifted deposit from parents can bridge the gap entirely or partly.
- First-time buyer schemes. Shared ownership, and other schemes can reduce the deposit you need — see first-time buyer schemes.
- Regular saving. A dedicated monthly savings habit, ideally automated, into the highest-interest account available to you.
- Low-deposit and no-deposit options. If saving even 5% is a struggle, explore no-deposit routes and low-deposit schemes, which have grown in availability.
The bottom line
The minimum first-time buyer deposit is 5% — £12,500 on a £250,000 home — not the 20% many wrongly believe, and that misconception delays countless purchases. 95% mortgages are widely available, so 5% genuinely gets you on the ladder. That said, saving a bit more helps: dropping into a lower LTV band at 10% or 15% unlocks better rates and more lenders, making 10–15% a sensible sweet spot if you can reach it. Your deposit works alongside your income to set your budget, and you’ll need an extra £3,000–£6,000 for solicitors, surveys and any stamp duty (though first-time buyers pay none up to £300,000). Use a Lifetime ISA for the 25% bonus, consider family help, and don’t wait years chasing a 20% deposit you never needed. Work out 5% of your price range — that’s your real starting line.
Ready to find out your real number? Get matched with an FCA-regulated, whole-of-market broker who’ll tell you exactly what deposit you need — free, no obligation.
First-time buyer deposit: FAQs
How much deposit does a first-time buyer need?
The minimum deposit for a first-time buyer in the UK is 5% of the property’s purchase price. On a £250,000 home that’s £12,500, and on a £300,000 home it’s £15,000. Mortgages where you borrow the other 95% (95% LTV mortgages) are widely available in 2026, at their highest level in almost 20 years. You do not need a 20% deposit, despite the common belief — that figure reflects the average deposit first-time buyers pay (around £61,000), which is inflated by those who put down more or live in expensive areas. The 5% is what you need; the 20% is what some choose to pay. While 5% is the minimum, putting down 10% or more unlocks better mortgage rates by moving you into a lower loan-to-value band, so 10–15% is often a sensible target if you can save it.
Do first-time buyers really need a 20% deposit?
No — this is one of the most damaging myths in home buying. The minimum deposit is 5%, not 20%. The 20% figure comes from the average deposit first-time buyers actually put down, which is pulled up by buyers who can afford more, received family gifts, or live in high-priced areas like London. Because so many people believe they need 20%, industry data shows that would-be buyers frequently delay their purchases by years, renting while they save for a deposit far larger than required. In reality, 95% mortgages (needing just 5% down) are widely available. So if the 20% figure has been putting you off, the real threshold is a quarter of that — around £12,500 on a £250,000 home. Saving more than 5% does help you access better rates, but it’s a choice to optimise, not a requirement to buy.
Is a bigger deposit better for a first-time buyer?
Yes, if you can afford it, because a bigger deposit lowers your loan-to-value (LTV) and unlocks better mortgage rates and more lender choice. The improvements are stepped at key thresholds: a 5% deposit (95% LTV) gets you on the ladder but at the highest rates with fewer lenders; 10% (90% LTV) is a significant improvement accessing most mainstream lenders; 15% (85% LTV) is another step down; and 25% (75% LTV) is where the most competitive rates sit. However, bigger isn’t always better in practice — waiting years to save a larger deposit while paying rent and watching house prices rise can cost more than the rate saving is worth. The sensible approach is to aim for the next achievable band (often 10%), but not to delay endlessly chasing 20% or 25%. It’s a balance a broker can help you weigh.
What deposit do I need for a £200,000 house as a first-time buyer?
For a £200,000 home, the minimum first-time buyer deposit is 5%, which is £10,000. A 10% deposit would be £20,000, and 15% would be £30,000. With the minimum £10,000 deposit you’d need a 95% mortgage of £190,000, which is achievable given how widely available 95% mortgages are in 2026, though the interest rate will be higher than with a larger deposit. Stepping up to a £20,000 (10%) deposit would move you into the 90% LTV band, accessing more lenders and noticeably better rates. Remember that your income also matters — lenders typically lend 4 to 4.5 times your income, so you need to earn enough to borrow the £190,000 as well as having the deposit. And budget an extra £3,000 or so for solicitor and survey costs (there’s no stamp duty for first-time buyers at this price). A broker can confirm the real figures for your circumstances.
Can I buy my first home with a 5% deposit?
Yes. A 5% deposit is the standard minimum for first-time buyers, and 95% mortgages (where you borrow the remaining 95%) are widely available in 2026, with low-deposit products at their highest level in nearly two decades. On a £250,000 home, a 5% deposit is £12,500. The trade-off is that 95% mortgages carry higher interest rates than lower-LTV deals (often around 1 to 1.5% more) and come from a slightly narrower pool of lenders, because the lender is taking on more risk. But they are a genuine and popular route onto the property ladder. If you have 5% saved and a stable income sufficient for the mortgage, you can buy. If even 5% is difficult, there are low-deposit schemes and, in limited cases, no-deposit options worth exploring. A broker can identify the best 95% deals and check your eligibility.
How much money do I need in total to buy my first home?
Beyond the deposit, budget an extra £3,000 to £6,000 for the other upfront costs of buying. These include solicitor and conveyancing fees (typically £1,000 to £2,500), a survey (£400 to £1,000), any mortgage product or valuation fees, and moving costs. The big saving for first-time buyers is stamp duty: you pay nothing on homes up to £300,000, and only 5% on the portion above £300,000 up to £500,000, which removes what is usually buyers’ largest extra cost. So for a typical £250,000 first home with a 5% deposit, you’d need £12,500 for the deposit plus roughly £3,000 to £4,000 for the other costs — call it around £16,000 in total. Budgeting for these extras from the start, rather than just the deposit, avoids an unwelcome surprise close to completion. A full cost breakdown helps you plan accurately.
Important information
nextmove is an introducer, not a lender or mortgage adviser. This article is general information only and does not constitute financial advice. Minimum deposits, loan-to-value bands, interest rates, availability of 95% mortgages and the other costs of buying vary between lenders and change over time; the figures here are illustrative examples based on 2026 conditions, not quotes, and how much you can borrow and buy depends on your income, deposit, credit profile and lender criteria. We introduce you to FCA-regulated, whole-of-market mortgage brokers who can assess your situation and advise, and we may receive a fee or commission for doing so.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Deposit
Get matched with a broker
Want your real deposit number? Get matched with a whole-of-market broker who’ll work it out with you. We introduce, they advise. Free.
Get matched with a broker → Independent · No obligation