Work out exactly how much deposit you need, compare LTV scenarios and see how long it will take to save it. Includes how different deposit sizes affect your mortgage rate and monthly repayment.
| Deposit | LTV | Amount Needed | Months to Save | Rate* | Monthly Payment |
|---|
Your deposit size determines your Loan-to-Value ratio — and your LTV determines what mortgage rate you can access. The difference between a 5% deposit (95% LTV) and a 10% deposit (90% LTV) in monthly repayment terms can be £150–£300/month. Understanding exactly what you need, by when, and which savings vehicles accelerate getting there is the foundation of first-time buying.
| Deposit | LTV | Typical 2yr Fixed Rate | Monthly on £225,000 loan | Monthly Saving vs 95% LTV |
|---|---|---|---|---|
| 5% (£14k on £280k) | 95% | 5.2% | £1,344 | — (base) |
| 10% (£28k) | 90% | 4.6% | £1,252 | £92/mo |
| 15% (£42k) | 85% | 4.3% | £1,213 | £131/mo |
| 20% (£56k) | 80% | 4.1% | £1,187 | £157/mo |
| 25% (£70k) | 75% | 3.9% | £1,161 | £183/mo |
First-time buyers under 40 can open a Lifetime ISA (LISA) and save up to £4,000/year. The government adds a 25% bonus — worth up to £1,000/year of free money. Over 5 years: up to £5,000 in government bonuses. Access the LISA penalty-free for your first home purchase (max £450,000 property price). A Lifetime ISA + regular savings account is the fastest combination for building a UK first-time buyer deposit.
The minimum deposit for most lenders is 5% (95% LTV mortgage). On a £280,000 home, that is £14,000. However, a 10% deposit (£28,000) unlocks significantly better rates and a wider range of lenders. First-time buyers should also budget for stamp duty (£0 for FTBs up to £425,000), legal fees (£1,500–£2,500), survey (£500–£1,000) and any moving costs.
LTV (Loan-to-Value) is your mortgage as a percentage of the property value. A £252,000 mortgage on a £280,000 home = 90% LTV. Lower LTV means lower risk for the lender, which translates to a lower interest rate for you. Moving from 90% to 85% LTV (an extra £14,000 deposit on a £280,000 home) typically reduces your rate by 0.3–0.5% — saving £60–£100/month on repayments.
At £800/month at 4.5% AER: a 5% deposit on a £280,000 home (£14,000 minus any saved) takes approximately 16 months from zero. A 10% deposit (£28,000) takes approximately 31 months. The Lifetime ISA government bonus of £1,000/year significantly accelerates this. Shared Ownership allows buying with a smaller deposit on a proportion of the property — as low as 5% of the share purchased.