Saving for a house deposit is one of the most common financial goals in the UK — and one of the most challenging, given the gap between property prices and average incomes. This guide covers the practical side: how much you actually need, how long it realistically takes, and which savings accounts are worth using while you build towards the target.
The calculator above lets you enter a property price, your deposit percentage target, and your monthly saving rate — it shows you the timeline so you can plan accordingly.
How Much Deposit Do You Actually Need?
The minimum deposit for a residential mortgage in the UK is typically 5% of the purchase price. On a £250,000 property, that's £12,500. On a £350,000 property, it's £17,500.
A 5% deposit is achievable, and there are mortgages available at this level — but the interest rate on a 95% loan-to-value mortgage is significantly higher than on a 90% or 85% LTV mortgage. The bigger the deposit as a percentage of the purchase price, the lower the LTV and the better the mortgage rate available.
The difference in monthly repayments between a 5% and a 10% deposit can be substantial. If your goal is to buy as quickly as possible, a 5% deposit gets you there sooner, but the higher mortgage rate may cost more over the long run. If you can save longer and reach 10% or 15%, the better mortgage rate often outweighs the delay.
The Realistic Timeline
The gap between average UK incomes and average house prices means deposit saving takes years for most people — particularly in higher-cost areas. This isn't a failure of effort; it's the arithmetic of the market.
A few typical scenarios to give a sense of scale:
- Saving £500/month with a 5% target on a £250,000 property: approximately 2 years
- Saving £500/month with a 10% target on a £250,000 property: approximately 4 years
- Saving £500/month with a 10% target on a £350,000 property: approximately 6 years
These are rough figures — the calculator gives you the exact timeline for your numbers. Interest helps, but doesn't dramatically shorten the timeline at typical savings rates. The main lever is the monthly saving amount.
Accounts Worth Using While You Save
Where you keep your deposit savings while they build up genuinely matters — both for the return you get and for protecting the money's tax-free status.
Lifetime ISA (under 40s only)
If you're a first-time buyer under 40, the Lifetime ISA is worth serious consideration. You can save up to £4,000 per year and the government adds a 25% bonus — up to £1,000 per year. On a three-year saving period, that's up to £3,000 in government money on top of your contributions.
The restrictions: the property must be worth £450,000 or less, and you must be a first-time buyer. Withdrawals for any other purpose incur a penalty that costs you more than the bonus. This makes it unsuitable as an emergency fund — keep LISA money solely for the deposit.
Our ISA guide covers Lifetime ISAs in more detail.
Cash ISA
A Cash ISA keeps your savings interest tax-free. For longer saving periods where your savings balance grows large, this becomes increasingly worthwhile — savings interest above the Personal Savings Allowance is taxable in a standard account.
Regular saver accounts
The higher interest rates on regular savers — often 7–8% — make them worth using for the monthly saving amount while you're building up. The restriction on withdrawals suits deposit saving well, since you're not intending to touch the money anyway. Our regular saver accounts guide explains how these work.
Easy-access savings account
A competitive easy-access account is useful for the portion of savings you might need to access or move at short notice. As you get closer to having your deposit ready, moving money into a flexible, accessible account means you can act quickly when the right property comes up.
Shared Ownership — An Alternative to Saving a Full Deposit
Shared Ownership is a government-backed scheme that allows you to buy a share of a property (typically 10–75%) and pay rent on the remainder, rather than buying outright. The deposit is calculated on the share you're buying — typically 5–10% of that share — which makes the deposit requirement significantly lower than buying outright.
It's not the right route for everyone, and there are ongoing costs (rent on the unowned share, service charges on leasehold properties) that make the overall cost picture more complex than a straightforward purchase. But for areas where property prices are high relative to income, it can make ownership achievable sooner.
Details and eligibility are at gov.uk.
Other Costs Beyond the Deposit
The deposit is the biggest single upfront cost, but it's not the only one. Budget for:
- Stamp Duty Land Tax — first-time buyers pay no SDLT on the first £425,000 (as of 2025/26). Above this, rates apply. Our stamp duty calculator works out the exact figure for any purchase price.
- Solicitor and conveyancing fees — typically £1,000–£2,500
- Survey costs — £300–£1,500 depending on survey type
- Mortgage arrangement fees — some mortgages have fees of £500–£2,000, which can often be added to the mortgage
- Moving costs — vary widely but budget at least a few hundred pounds
These costs typically add £3,000–£6,000 on top of the deposit for a standard first purchase. It's worth factoring them into your total savings target so they're not a surprise at exchange stage.
Frequently Asked Questions
Most residential mortgages require a minimum 5% deposit. Some specific government-backed schemes may allow lower deposits in certain circumstances, but 5% is the practical minimum for most buyers.
Generally yes — a lower LTV (loan-to-value ratio, which decreases as your deposit increases) typically means access to better mortgage rates. The biggest improvements tend to come at 90% LTV (10% deposit) and 85% LTV (15% deposit). Above 25% deposit, the rate improvements become smaller.
Yes — mortgage lenders accept gifted deposits, typically from immediate family members. The lender will usually require a signed letter from the donor confirming the money is a gift and not a loan. The rules vary by lender, so check with your mortgage broker.
No — simply saving money has no effect on your credit score. Actions that do affect your credit score include applying for credit, missing payments, and high credit card utilisation. Building your savings and simultaneously maintaining a clean credit record are complementary.
For most first-time buyers, yes. A mortgage broker (particularly a whole-of-market broker) can access deals not available direct to consumers, assess which lenders are likely to approve your application, and advise on the best structure for your situation. Many offer a free initial consultation, with fees payable only on completion.
This guide provides general information and is not financial or mortgage advice. Mortgage rates, scheme eligibility criteria and stamp duty rules are subject to change. Speak to a qualified mortgage adviser before making decisions about a property purchase.