House Deposit Guide: How Much You Need and Simple Ways to Save

When you hear "house deposit" most people picture a huge lump sum that feels out of reach. In reality, it’s just the money you put down to show lenders you’re serious and to lower your loan amount. The bigger the deposit, the smaller the mortgage, which usually means a better interest rate and lower monthly payments.

How Much Deposit Do You Need?

In the UK, most lenders ask for at least 5% of the property price as a deposit. For a £250,000 house that’s £12,500. However, many experts recommend aiming for 10% to 20% if you can. A 10% deposit (£25,000) often unlocks a lower rate, while a 20% deposit (£50,000) can shave off a few percentage points on the mortgage rate. Some government schemes, like Help to Buy or shared ownership, let you get by with as little as 5%.

If you’re a first‑time buyer, you might qualify for additional support such as the Lifetime ISA, which lets you save up to £4,000 a year and adds a 25% government bonus, boosting your deposit even more. Remember, the deposit amount you need also depends on the lender’s risk appetite, your credit score, and the type of mortgage you choose.

Smart Ways to Build Your Deposit Faster

Start by setting a clear savings target and a timeline. Break the total amount into monthly goals and treat each deposit like a bill you must pay. Open a dedicated savings account that offers a higher interest rate, and avoid dipping into it for everyday expenses.

Cut discretionary spending where you can—skip the pricey coffee runs, cancel unused subscriptions, and shop with a list to prevent impulse buys. Any extra cash, such as tax refunds, bonuses, or gifts, should go straight into your deposit pot.

Consider a part‑time side hustle or freelance work. Even a few extra hours each week can add up to a few hundred pounds a month, speeding up your progress dramatically. If your employer offers a salary sacrifice scheme for a pension or a mortgage, check whether you can redirect some of that money into your deposit savings.

Finally, look into government‑backed schemes that match your savings. The Lifetime ISA, for example, adds 25% to the amount you save each year up to £1,000. Combine that with a regular high‑interest savings account, and you’ll watch your deposit grow faster than you thought possible.

Saving for a house deposit takes discipline, but every pound you put aside today reduces the loan you’ll need tomorrow and can save you thousands in interest. Keep your goal in sight, use the tips above, and soon you’ll be ready to put an offer on your new home.