Why your deposit size matters
Your deposit is the gap between the property price and the mortgage you borrow, and it is one of the biggest factors in the rate you are offered. Lenders group mortgages by loan-to-value, or LTV, which is the mortgage expressed as a percentage of the property value. A smaller deposit means a higher LTV, and higher LTV mortgages generally come with higher rates because they carry more risk for the lender.
Typical minimum deposits
Most residential mortgages ask for a minimum deposit of five to ten percent of the property price, though the exact minimum varies by lender and by your circumstances. Putting down more than the minimum, where you can, usually opens up better rates, so it is worth understanding where the different LTV brackets sit before you start viewing properties.
Ways people build a deposit
Common approaches include regular saving into a dedicated account, using a Lifetime ISA where eligible, and receiving a gifted deposit from family, which lenders will usually want confirmed in writing. A mortgage adviser can talk through what deposit size makes sense for your circumstances and what evidence a lender will want to see.
