How Much Mortgage Deposit Do You Need in 2025?
Wondering how much mortgage deposit you really need before you can buy a home in 2025?
Here’s a straightforward look at deposits in today’s market, so you know what to aim for.
Minimum Mortgage Deposit: 5% Is the Starting Point
For most buyers, you’ll need at least a 5% deposit of the property price.
On a £250,000 home, that’s £12,500.
Saving just this amount can get you started, but it often limits your mortgage choices and can mean higher interest rates.
Bigger Mortgage Deposits Give You More Options
- A 10% or 15% deposit usually unlocks a wider range of mortgages with better rates.
- A 20% deposit or more can bring the lowest available rates and reduce your monthly repayments.
Even adding a few thousand pounds to your deposit can make a noticeable difference in your mortgage offer.
First-Time Buyers: 5% Mortgage Deposits Still Available
Thanks to the government’s Mortgage Guarantee Scheme continuing into 2025, some lenders offer mortgages with only a 5% deposit.
But smaller deposits often mean higher costs over time, so it’s worth comparing deals carefully, and if you’re new to the process, our Comprehensive Mortgage Guide for First-Time Buyers in the UK breaks it all down in simple terms.
Second Homes and Buy-to-Let: Higher Mortgage Deposits Needed
If you’re buying a second property or planning to rent it out, expect to need a 15% to 25% deposit.
Lenders usually see these purchases as riskier, so they require more upfront.
How to Build a Bigger Mortgage Deposit
- Consider a Lifetime ISA if you’re eligible, to add a government bonus to your savings.
- Family contributions can help, but make sure your lender knows exactly where your deposit is coming from.
Keep It Realistic
There’s no one-size-fits-all deposit amount.
Focus on what you can save without stretching your finances too far.
The right deposit is one you can afford comfortably not one that leaves you worrying every month…
Looking to buy in 2025?
Pera Mortgages can help you find a mortgage that matches your deposit and future plans.
Let’s get started.
Your Mortgage Your Future