How much deposit do I need to buy a house?

Carl Aktinson

4-minute read

Last updated:

July 30, 2020

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Lenders want at least a minimum deposit of 5%.

This is £5,000 for a £100,000 property or £11,500 for a £230,000 property, the current UK-wide average for a house.

This would mean you’d have a 95% mortgage. It’s called that because the loan to value (LTV) is 95%.

The higher the LTV, the more limited your mortgage options are and, generally, the higher the rate of interest you will be charged. Equally, the bigger your deposit (and the lower the LTV) the lower the interest rates will be.

Most lenders start to offer more choice (and better rates) when you have at least a 10% deposit.

It may be worth knowing that the average deposit for first-time buyers is £43,433. That’s enough for a £430,000 house at a 90% LTV.

That said, the price of a first-time buyer home is £217,200, which makes the £43,433 deposit more like 20%.

Remember, Mojo can show you right now what first-time buyer mortgages your deposit can get you.

Can I get a 0% deposit or a 100% LTV mortgage?

Maybe before the credit crunch. Now the only 0% deposit mortgages are guarantor mortgages. Here, you’ll need someone else – usually your parents – to be liable to pay your mortgage if you can’t afford to do so.

What about Help to Buy schemes and deposits?

You can learn more about Help to Buy here, but the minimum deposit allowed with Help to Buy is 5%. However, with a Help to Buy Equity loan that could be enough for a LTV of 75%.

Furthermore, if you save for your deposit with a Help to Buy Isa, the government will boost your deposit by an additional 25% of what you have saved. Bear in mind that, if you haven’t opened a Help to Buy Isa already, you no longer can, but it may be worth looking at Lifetime Isas.

First-time buyer mortgage guides

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