How much deposit for a mortgage first-time buyer?

What is the minimum deposit for a mortgage if you’re a first-time buyer?

At the moment there’s a specific route with a niche lender where if you can show you’ve been renting for 12 out of the last 18 months, you could potentially get a mortgage with zero deposit.

These things change regularly and that may not be available in a few months’ time – or there might be more similar options.

I’ve got another lender that can accept a minimum of £5,000 deposit – and again there are certain criteria to hit. For example, one of the applicants has to be a first-time buyer. But if you’re buying a £500,000 home, that would mean you just need a 1% deposit.

So, there are some niche products out there for applicants with a smaller deposit [all information correct at the time of recording in August 2025].

How can I save for a mortgage deposit?

I get asked that every single day. It’s hard. Rents are expensive, bills have gone up, gas and electricity are always increasing. First-time buyers are finding it more of a struggle to get a deposit together.

But it’s worthwhile saving that deposit, because with those low deposit or no deposit deals generally the interest rates are more expensive.

In the last three or four years, gifted deposits from family have become much more common. They might be gifting £5,000 or £6,000 – but I’ve also seen over £100,000. It depends on family circumstances.

Most lenders don’t have any issues or concerns with that as long as you can prove where the money’s come from.

If that’s not an option, you have to ask yourselves, do we want our own house? Can you cut those expensive meals in town, stop using taxis and get the bus? It’s much easier and cheaper to get a 90% mortgage than a 95% one – and even more so a 75% or 80%.

Lenders work on Loan to Value. As a basic example, on a £100,000 purchase price, if you’re putting £5,000 down, it’s a 95% mortgage. That’s one of the more expensive mortgages.
Interest rates are higher because there’s more risk to the lender. If you put a 10% deposit down – which is £10,000 in that example – interest rates are cheaper as the risk is lower.

That said, if it’s going to take you another two years to save an additional 5% deposit and property prices continue to go up, it could be worth getting a 95% mortgage now rather than save for the next two years.

That’s always difficult to work out – none of us have a crystal ball. We don’t know what property prices are going to do.

What are my options if I’m struggling to save for a deposit?

Cut your cloth accordingly. You can’t afford to go out every weekend and also save for a house. If you’re hell-bent on buying a home, you’ve got to make the effort.

Could you get a family deposit? When gifted deposits initially came in, most lenders required them to come from a family member. These days some accept non-family members who aren’t necessarily related to you.

Can I get a deposit from my family as a first-time buyer?

Yes – this is a gifted deposit, which could come from family or a non-family member. In fact, I had one recently where the deposit came from someone’s employer.

She was contemplating moving and her employer said they would gift the deposit. It wasn’t a bonus and wasn’t taxable – it was a gift because they wanted her to stay with them. She was important to their ongoing plans, and the company knew it was expensive to live nearby.

She’d saved about a 5% deposit herself but we went through some figures and it was just too expensive. The employer then gifted her another 5%. On 10%, it worked out much cheaper.

What is the average deposit for a first-time buyer?

This is probably more about the clients I deal with and the area we’re in, but our average is probably 10% to 15%. Perhaps 50% of them have some form of gifted deposit within that.