The minimum for most mortgages is 5% of the price, which is about £27,700 on the London average of £554,000. A 10% deposit (around £55,400) opens up far more lenders and better rates, and each 5% step after that usually lowers the rate again. From 2027 the new Your First Home scheme should let eligible first-time buyers of new builds put down as little as 2.5%.
- 01What deposits look like in London
- 02Why the size of your deposit matters
- 03Budget for more than the deposit
- 04Ways to build or boost a deposit
01What deposits look like in London
| Price | 5% | 10% | 15% | 25% |
|---|---|---|---|---|
| £400,000 | £20,000 | £40,000 | £60,000 | £100,000 |
| £554,000 (London average) | £27,700 | £55,400 | £83,100 | £138,500 |
| £750,000 | £37,500 | £75,000 | £112,500 | £187,500 |
| £1,000,000 | £50,000 | £100,000 | £150,000 | £250,000 |
Average London price from the UK House Price Index, August 2026.
02Why the size of your deposit matters
Lenders price mortgages in loan-to-value (LTV) bands, typically 95%, 90%, 85%, 80%, 75% and 60%. Moving down a band can cut your rate noticeably, and the biggest steps are usually from 95% to 90% and from 90% to 85%. A bigger deposit also means a smaller loan, so you need less income to pass affordability.
Above £1 million, many lenders want at least 15% to 25% down, although private banks will sometimes lend more against wider assets.
03Budget for more than the deposit
- Stamp duty: £17,700 for a home mover at £554,000. First-time buyers pay less below £500,000. See our stamp duty guide.
- Legal fees and searches: often £1,800 to £3,000 in London, more for leasehold flats.
- Survey: typically £500 to £1,500 depending on the property.
- Lender and broker fees: some products carry an arrangement fee. Our typical broker fee is £495.
- Moving costs and furnishing.
04Ways to build or boost a deposit
- Gifted deposits from family are accepted by most lenders with a signed gift letter.
- Lifetime ISA: a 25% government bonus on up to £4,000 a year, for first homes up to £450,000. From 29 October 2026 the charge for using it on a home above £450,000 fell from 25% to 20%.
- Your First Home: a 20% government equity loan on new builds with a deposit from 2.5%, opening in 2027. Read our guide to the scheme.
- Joint borrower, sole proprietor mortgages let a parent's income support the application without them owning the home.
Frequently asked questions
Can I buy in London with a 5% deposit?
Yes. Many lenders offer 95% mortgages, although the choice is smaller, rates are higher and you need enough income to borrow 95% of the price.
Does a gifted deposit affect my mortgage?
Most lenders accept gifted deposits from close family. They will want a gift letter confirming it is not a loan, and the giver may need to provide ID and proof of funds.
Is it better to save a bigger deposit or buy sooner?
It depends on rents, prices and rates. A bigger deposit lowers your rate and monthly payment, but waiting has a cost if rents are high. We can model both options for you.
What deposit do I need for a buy-to-let?
Usually at least 25%, and the rent must cover the mortgage payment by a set margin.