Last reviewed: June 2026
TL;DR- The minimum deposit for most UK residential mortgages is 5% of the purchase price (95% LTV).
- Buy-to-let and second home mortgages typically require a minimum of 25% deposit.
- Each 5-10% increase in deposit (moving down an LTV tier) typically produces a better interest rate.
- The deposit amount should be considered alongside other upfront purchase costs - stamp duty, legal fees and survey - when planning a purchase budget.
Minimum Deposit for Residential Mortgages
For a standard owner-occupied residential mortgage, the minimum deposit available from mainstream lenders and government-backed schemes is 5% of the purchase price. On a £250,000 property, a 5% deposit is £12,500 and the mortgage is £237,500. 95% LTV products carry the highest rates and the most restricted lender choice of any mainstream mortgage tier.
The minimum deposit changes for specific circumstances: new build properties often require 10-15% (85-90% LTV) because some lenders restrict LTV on new builds; buy-to-let mortgages require a minimum of 25%; second home mortgages typically require 15-25%; and some specialist property types (ex-local authority high-rise flats, non-standard construction) require higher deposits even on residential products.
Deposit Requirements by Scenario
- Standard residential purchase (first time buyer or home mover): minimum 5% (95% LTV).
- New build residential: minimum 10-15% (85-90% LTV) from most lenders.
- Buy-to-let: minimum 25% (75% LTV) from most lenders.
- Holiday home / second home: minimum 15-25% (75-85% LTV).
- Adverse credit residential: minimum 15-25% depending on severity and recency of adverse events.
- Non-standard construction: minimum 15-25% depending on construction type.
- Commercial property: minimum 25-35% (65-75% LTV).
How Deposit Size Affects the Rate
Moving from one LTV tier to the next typically produces a rate improvement. The most significant improvements tend to occur between 90% and 85% LTV and between 80% and 75% LTV. Moving from 95% to 90% LTV (an extra 5% deposit on the purchase price) often produces a larger rate improvement than moving from 80% to 75% LTV (also an extra 5% deposit). The actual rate differentials vary with market conditions. A broker can model the rate improvement and total interest saving for a specific loan amount at different deposit levels.
Planning for All Upfront Costs
Beyond the deposit, a UK property purchase involves: stamp duty land tax (variable by purchase price and buyer type); solicitor and conveyancing fees; mortgage arrangement fee (if applicable); survey fee; removal costs; and any immediate home improvements. First time buyers purchasing at £300,000 in England might face: £0 SDLT (under first time buyer relief); £1,500-£2,500 in legal fees; £0-£1,500 in arrangement fee; £400-£1,000 for a survey; plus removal costs. Total purchase costs beyond the deposit of approximately £3,000-£6,000 should be in place alongside the deposit.
Frequently Asked Questions
Does a bigger deposit always mean a better mortgage rate?
Yes, generally. Each lower LTV tier typically carries a better rate. However, the rate improvement between tiers varies, and at some LTV points the improvement is marginal. The biggest improvements tend to be at 90% to 85% and at 80% to 75%. Beyond 60% LTV, many lenders price at the same rate regardless of further LTV improvement.
Can I use a Help to Buy ISA as my deposit?
The Help to Buy ISA bonus is paid at completion through the solicitor and is treated as part of the deposit for mortgage purposes. However, the bonus cannot typically be used for the exchange deposit (the 10% paid at exchange of contracts) as it is only available at completion. Buyers who have a Help to Buy ISA should factor this timing into their deposit planning.
What if I find a property before I have saved enough deposit?
Options include: a gifted deposit from family to supplement savings; a springboard or family-assisted mortgage where family savings substitute for part of the deposit; a government scheme (shared ownership, LISA); or delaying the purchase until the deposit target is reached. Purchasing at a higher LTV than planned means paying a higher rate, which has a long-term interest cost. The trade-off should be assessed with a broker for the specific circumstances.
Is the deposit lost if the purchase falls through?
The position on deposit depends on at what stage the purchase falls through. Before exchange of contracts, neither party is legally committed - the buyer can withdraw and any reservation fee (on new builds) may be forfeited but no deposit is at risk on resale properties. After exchange of contracts, the buyer has typically paid a 10% deposit (from personal funds, distinct from the mortgage deposit) to the seller's solicitor. If the buyer withdraws after exchange without a valid legal reason, this 10% is forfeited. The mortgage deposit (the total amount funded by the buyer) is a separate concept from the exchange deposit.
