Saving for a House Deposit UK 2025: How Much Do You Really Need?

The average UK house price is around £290,000 in 2025. A 10% deposit on that is £29,000. For most people, that's a lot of money to find.

The good news is you don't always need 10%. Some lenders offer 5% deposit mortgages, which brings the target down to about £14,500 on an average-priced home. The bad news is a smaller deposit means higher monthly payments, higher interest rates, and more paid in total over the life of the mortgage.

Here's how much you actually need, what help is available, and how to get there faster.

How much deposit do you need?

Most mortgage lenders want at least 5% of the purchase price as a deposit. But the more you put down, the better deal you get:

Deposit %	On a £250,000 home	Mortgage needed	What it means
5%	£12,500	£237,500	Highest rates, limited lender choice
10%	£25,000	£225,000	Better rates, more lenders
15%	£37,500	£212,500	Noticeably cheaper rates
20%	£50,000	£200,000	Best high-street rates

The difference in interest rates between a 5% and a 15% deposit can be 0.5-1.0% or more. On a £225,000 mortgage over 25 years, that's thousands of pounds in extra interest.

The sweet spot for most first-time buyers is 10-15%. It gets you access to competitive rates without needing to save forever.

What counts as a deposit?

Your deposit can come from:

• Personal savings (the simplest and most common route)
• Gifts from family (lenders will ask for a letter confirming it's a gift, not a loan)
• Inheritance
• LISA bonus (more on this below)
• Equity from selling another property (if you already own one)

What it can't come from: a personal loan, credit card, or any other borrowing. Lenders check the source of your deposit, and borrowed deposits are usually rejected.

Government schemes that help

Lifetime ISA (LISA)

If you're between 18 and 39, open a LISA. You can save up to £4,000 a year and the government adds 25% on top, that's up to £1,000 free money each year.

You can use it to buy a first home worth up to £450,000. The catch: if you withdraw for any other reason before age 60, you lose the bonus plus a penalty (25% of the withdrawal, which actually eats into your own contributions).

The LISA sits within your £20,000 annual ISA allowance. If you're saving specifically for a first home and you're under 40, there's no good reason not to have one.

First Homes scheme

Some new-build properties are available at a 30-50% discount to first-time buyers and key workers. The discount stays with the property when you sell. Availability varies by area and there are income caps (£80,000, or £90,000 in London).

Worth checking, but don't plan around it unless there's an active development near where you want to live.

Shared Ownership

You buy a share (25-75%) and pay rent on the rest. This lowers the deposit needed since you only need a deposit on the share you're buying. A 10% deposit on a 40% share of a £250,000 home is £10,000 instead of £25,000.

The trade-off is ongoing rent payments, service charges, and restrictions on what you can do with the property. It works for some people, but go in with your eyes open about the total costs.

Help to Buy ISA

Closed to new applicants since November 2019. If you already have one, you can keep saving into it until November 2029 and claim the bonus until November 2030. But you can't open a new one.

How to save faster

Work out your target

Pick a house price range for the area you want to buy in. Check Rightmove or Zoopla for realistic numbers. Then work backwards:

If you're aiming for a £250,000 property with a 10% deposit, you need £25,000. If you can save £800 a month, that's about 31 months, just over two and a half years.

Automate your savings

Set up a standing order on payday. The money leaves your account before you see it, so you don't miss it. This is the single most effective savings habit.

Cut the big costs first

Everyone talks about cutting out coffee and meal deals. That's fine, but the big wins are in the big categories:

• Rent: Can you move somewhere cheaper, or get a housemate for a year or two?
• Car: Do you actually need it, or could you manage with public transport while saving?
• Subscriptions: Add them up. The total is usually more than people expect.

A £200/month rent reduction does more than skipping every takeaway coffee for the rest of your life.

Use a LISA for the free money

If you're putting away £333 a month, you'll hit the £4,000 annual LISA cap and get £1,000 from the government. Over three years, that's £12,000 of your money plus £3,000 in bonuses.

Consider a Stocks and Shares ISA for longer timelines

If you're 5+ years from buying, a Stocks and Shares ISA may grow your deposit faster than cash savings. But if you need the money in 1-2 years, stick with cash. Markets can drop 20% in a bad year, and you don't want your deposit shrinking when you need it.

What about stamp duty?

First-time buyers in England and Northern Ireland pay no stamp duty on the first £300,000. On a £400,000 property, you'd pay 5% on the portion between £300,001 and £400,000, which works out to £5,000.

Scotland and Wales have their own systems (LBTT and LTT respectively) with different thresholds.

Budget for stamp duty on top of your deposit. It's not included in the deposit itself.

Other costs to budget for

The deposit isn't the only upfront cost. You'll also need:

Cost	Typical amount
Solicitor/conveyancer	£1,000 - £1,800
Survey	£300 - £700
Mortgage arrangement fee	£0 - £2,000
Removal costs	£300 - £1,000
Furniture and immediate repairs	Varies

Budget an extra £2,500-£5,000 on top of your deposit for these costs. Running out of money on completion day is stressful and avoidable.

A realistic savings plan

Here's what saving for a £250,000 home with a 10% deposit might look like:

Monthly savings	Time to £25,000	With LISA bonus
£500	50 months (4 years 2 months)	~45 months
£750	33 months (2 years 9 months)	~30 months
£1,000	25 months (2 years 1 month)	~23 months
£1,500	17 months (1 year 5 months)	~15 months

The LISA bonus shaves a few months off, but the biggest factor is how much you can put away each month.

To see exactly how much of your salary you could direct towards savings, try our salary calculator and work out your take-home pay.