How Much Deposit Do I Need for My First Home?

If you’re just starting to think about buying your first home, one of the first questions that usually comes up is how much deposit you’ll need. The short answer is: it depends, but there are some helpful benchmarks most first-time buyers can work with. 

In England and Wales, most first-time buyers aim for at least a 10% deposit. While the government’s Freedom to Buy scheme has made 5% deposit mortgages more widely available through a permanent guarantee for lenders, these high loan-to-value (LTV) mortgages often come with higher interest rates. As a general rule, the more you can save, the more options you’ll have. 

To put this into context, if you were buying a home priced at £200,000, your deposit might look like this: 

• 5% deposit: £10,000 (95% LTV) 

• 10% deposit: £20,000 (90% LTV) 

• 20% deposit: £40,000 (80% LTV) 

Why the size of your deposit matters 

Saving a larger deposit doesn’t just help with mortgage approval. It can also reduce your monthly repayments and make your mortgage cheaper over the long term. Lenders use your Loan-to-Value ratio to assess risk – the lower your LTV, the less risky you appear, which is why more competitive interest rates are often available to those putting down 10–20% or more. 

From a legal perspective, it’s also worth knowing that the Standard Conditions of Sale usually expect a 10% deposit to be paid on exchange of contracts. If you’re using a 5% deposit scheme, your solicitor will need to negotiate a reduced deposit on exchange with the seller’s legal team. 

If you’re receiving help from family to boost your deposit, see our guides on gifted deposits from parents or using inheritance for a deposit to understand what documentation you’ll need. 

Budgeting for the hidden costs 

While your deposit is the biggest upfront cost, it isn’t the only one. When planning your savings, you should also factor in: 

• Conveyancing fees and search costs 

• Building surveys to check the property’s condition 

• Stamp Duty Land Tax (England): Since April 2025, first-time buyer relief applies to properties up to £300,000. If your first home costs more than £500,000, you’ll likely pay the standard rates, which start on properties over £125,000 

In Wales, Land Transaction Tax (LTT) applies instead. The thresholds are different and there’s no specific first-time buyer relief – the 0% band currently applies to the first £225,000 for all residential buyers. 

For a fuller breakdown of what to budget for beyond your deposit, see our guide on what to save for besides a deposit. 

What you can expect with Setfords

More time, more attention: With no targets, Setfords lawyers can dedicate more time to you.

Ultimate flexibility: Our lawyers can tailor their schedules to meet your needs.

Nationwide coverage: with hundreds of consultant lawyers across the UK, we’ll connect you with the right expert.

Dedicated specialist legal partner: work directly with your chosen lawyer from start to finish.

Highly experienced: Setfords lawyers have an average of 20 years’ experience, so you can be assured you’re in safe hands.

Capacity-based allocation: our lawyers never take on more work than they can handle, so you get the focus and attention you deserve.

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Final Thoughts 

Understanding deposit requirements is often the first step toward buying your first home. What matters most is knowing your options – whether that’s a 5% Freedom to Buy mortgage or a larger 10% deposit – and ensuring your total budget covers the legal and tax costs of the move. 

Our conveyancing team at Setfords supports first-time buyers once they’re ready to move forward, guiding them through the legal process with clarity and reassurance. 

Get your free conveyancing quote today.