How Much Deposit Do I Need to Buy a House? 

Working out your deposit early gives you real clarity on your purchasing power. While 5% is the entry point, understanding how each extra percentage point helps can save you thousands over the life of your mortgage. 

The 5% minimum 

For most first-time buyers, the entry point is a 5% deposit. Supported by the government’s permanent Mortgage Guarantee Scheme, these are widely available. However, because you’re borrowing 95% of the home’s value, you’ll face higher interest rates. A clean credit history is non-negotiable at this level. 

For more on how your credit score affects the deals available to you, see our guide on what credit score you need to buy a house. 

The sweet spot tiers 

Mortgage rates move in steps rather than a smooth scale. 

A 10% deposit is often the biggest single jump in affordability. You’ll unlock dozens more lenders and see a significant drop in your monthly repayments. 

At 15-20%, you become a safe bet for lenders. This is especially helpful if you’re self-employed or buying a new-build property. 

Property-specific rules 

Not all homes are treated equally. You may need a larger deposit (20-25%) for new-build flats because lenders are more cautious about their resale value. 

If you’re using the Deposit Unlock scheme to buy a new-build with 5%, be aware that the scheme is set to close to new completions in April 2026. This means you likely need to have your offer accepted and your mortgage offer in place very soon to ensure you cross the finish line before the deadline. 

Exchange deposit vs mortgage deposit 

This is the most common pitfall for buyers. 

Your mortgage deposit is the total cash you’re putting toward the house. Your exchange deposit is the cash you hand over to your solicitor on the day you exchange contracts which is the point of no return. This is standardly 10%. 

If your total mortgage deposit is only 5%, your solicitor must negotiate a reduced deposit on exchange with the seller’s side early on. This ensures the deal doesn’t stall at the final hurdle. 

For more on how this works, see our guide on the steps from offer to completion. 

Next steps 

Proving where your deposit came from is as important as saving it. Setfords’ residential property team specialises in source of funds verification, ensuring your money is legally cleared for a smooth exchange. 

Get your free conveyancing quote today 

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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