This guide is general information. Product availability and affordability depend on the full application. Your home may be repossessed if you do not keep up repayments on a mortgage.
Deposit and LTV calculation
The deposit is usually the difference between the purchase price and mortgage advance. LTV is the mortgage divided by the lender's accepted property value. If the lender values the home below the agreed price, the cash needed can increase because lending is normally based on the lower value.
| Deposit | Cash on a £250,000 purchase | Mortgage | LTV |
|---|---|---|---|
| 5% | £12,500 | £237,500 | 95% |
| 10% | £25,000 | £225,000 | 90% |
| 15% | £37,500 | £212,500 | 85% |
| 20% | £50,000 | £200,000 | 80% |
| 25% | £62,500 | £187,500 | 75% |
The permanent Mortgage Guarantee Scheme
The Treasury's permanent scheme, introduced in July 2025, supports participating lenders' eligible mortgages above 90% and up to 95% LTV. The government guarantee protects part of the lender's loss; it does not provide your deposit or reduce the affordability assessment. Lenders can offer 95% products inside or outside the scheme and can apply additional criteria.
Read the scheme eligibility guideDoes a bigger deposit mean a cheaper mortgage?
It can. Lenders often group products by maximum LTV, so reaching a lower band may change available rates and fees. The saving is not fixed and product pricing can make one band less attractive than expected. Compare total cost over the period you expect to keep the deal, not only the interest rate.
Do not use every pound for the deposit without budgeting for legal work, survey, moving, initial repairs, insurance, product costs, applicable property tax and an emergency fund. A slightly smaller deposit with adequate reserves can be more resilient than completing with no cash buffer.
Accepted deposit sources and evidence
Personal savings
Keep statements showing how funds accumulated and explain large credits or transfers.
Gifted deposit
The lender and conveyancer can require donor identity, source, relationship and a declaration that the money is not repayable.
Lifetime ISA
Eligibility, account age, withdrawal process and the property-price limit must all be met.
Inheritance or asset sale
Keep probate, completion, contract and bank evidence connecting the source to the account used.
Equity or sale proceeds
A home mover may use equity, subject to the sale completing and any secured debt and costs being repaid.
Borrowed money
Many lenders restrict unsecured borrowing for a deposit. Disclose every loan and committed repayment.
Set a complete savings target
Add the target deposit, transaction costs, moving costs, immediate property work and the emergency reserve you want after completion. Subtract confirmed gifts and eligible scheme funds. Divide the remainder by a realistic monthly saving amount, then revisit the target as price and mortgage assumptions change.
Prepare the mortgage documentsCompare deposit scenarios with a broker
Ask which lenders and products the broker can consider, what it cannot access and all fees before proceeding.
Request a broker match