First-Time Buyers UK 2026 — Deposits, Mortgages, Schemes and Buying Costs
How to Save for a House Deposit UK — Complete Guide
Practical guide to saving for a house deposit in the UK. How much you need, best savings accounts, government schemes, and strategies to reach your goal faster.
Saving for a house deposit is the biggest financial challenge for most first-time buyers. Here’s how to reach your goal.
For the wider cluster covering deposit strategy, affordability, schemes, mortgage applications and buying costs, use the main First-Time Buyers hub.
How Much Do You Need?
Deposit Requirements
| Deposit Size |
Typical LTV |
What It Means |
| 5% |
95% |
Minimum for most lenders |
| 10% |
90% |
Better rates available |
| 15% |
85% |
Good range of options |
| 20% |
80% |
Best mainstream rates |
| 25%+ |
75% or less |
Premium rates |
Real Numbers by House Price
| House Price |
5% Deposit |
10% Deposit |
15% Deposit |
| £150,000 |
£7,500 |
£15,000 |
£22,500 |
| £200,000 |
£10,000 |
£20,000 |
£30,000 |
| £250,000 |
£12,500 |
£25,000 |
£37,500 |
| £300,000 |
£15,000 |
£30,000 |
£45,000 |
| £350,000 |
£17,500 |
£35,000 |
£52,500 |
Additional Costs
| Cost |
Typical Amount |
| Stamp duty |
£0-£12,500 (FTB relief available) |
| Solicitor fees |
£1,000-£1,500 |
| Survey |
£300-£600 |
| Mortgage fees |
£0-£1,500 |
| Moving costs |
£500-£2,000 |
| Total extras |
£2,000-£15,000 |
Best Accounts for Deposit Saving
Lifetime ISA (LISA)
| Feature |
Details |
| Government bonus |
25% on contributions |
| Maximum contribution |
£4,000/year |
| Maximum bonus |
£1,000/year |
| Age limit |
18-39 to open |
| Property limit |
Up to £450,000 |
| Withdrawal penalty |
25% if not for property/retirement |
LISA Example
| Years Saving |
Your Contributions |
Government Bonus |
Total |
| 1 |
£4,000 |
£1,000 |
£5,000 |
| 2 |
£8,000 |
£2,000 |
£10,000 |
| 3 |
£12,000 |
£3,000 |
£15,000 |
| 4 |
£16,000 |
£4,000 |
£20,000 |
| 5 |
£20,000 |
£5,000 |
£25,000 |
Other Savings Options
| Account Type |
Best For |
Typical Rate |
| Regular saver |
Monthly deposits |
5-7% (limited) |
| Easy access ISA |
Flexibility |
4-5% |
| Fixed-rate bond |
Definite timeline |
4.5-5.5% |
| Notice account |
Slight restriction |
4.5-5% |
| Premium Bonds |
Tax-free, safe |
~4% average |
Recommended Combination
| Account |
Purpose |
Amount |
| Lifetime ISA |
Long-term deposit |
£333/month max |
| Regular saver |
Bonus interest |
Up to limit |
| Easy access |
Emergency fund |
3 months expenses |
| Easy access |
Surplus savings |
Remainder |
Saving Strategies
The Fundamentals
| Strategy |
Potential Saving |
| Automate savings |
Prevents spending |
| Pay yourself first |
Saves before spending |
| Track spending |
Find waste |
| Budget properly |
Know your numbers |
Major Cost Cuts
| Expense |
Potential Monthly Saving |
| Live with parents |
£500-£1,500 |
| House share vs solo rent |
£200-£500 |
| Move to cheaper area |
£200-£400 |
| Downsize current place |
£100-£300 |
| Give up car |
£200-£400 |
Smaller Wins
| Change |
Monthly Saving |
| Cook at home |
£100-£200 |
| Cancel unused subscriptions |
£20-£50 |
| Switch energy/insurance |
£30-£50 |
| Reduce takeaways |
£50-£100 |
| Cheaper phone contract |
£20-£30 |
Increasing Income
| Method |
Potential Extra |
| Overtime |
Varies |
| Side hustle |
£200-£500/month |
| Sell unused items |
One-off £500-£2,000 |
| Rent spare room |
£400-£700/month |
| Career progression |
Long-term gains |
Timeline Planning
Realistic Timelines
| Monthly Saving |
Time to £25,000 |
Time to £40,000 |
| £300 |
7 years |
11 years |
| £500 |
4 years |
6.5 years |
| £750 |
2.8 years |
4.5 years |
| £1,000 |
2 years |
3.3 years |
| £1,500 |
1.4 years |
2.2 years |
Assumes LISA bonus on first £4,000/year
Setting Your Target
| Step |
Action |
| 1 |
Research house prices in target area |
| 2 |
Decide deposit percentage (10-15% ideal) |
| 3 |
Add £5,000-£10,000 for other costs |
| 4 |
Set realistic timeline |
| 5 |
Calculate monthly saving needed |
Government Schemes
Help for First-Time Buyers
| Scheme |
How It Helps |
| Lifetime ISA |
25% bonus on savings |
| Shared Ownership |
Buy 25-75% of property |
| First Homes |
30-50% discount on new builds |
| Forces Help to Buy |
For armed forces |
| Stamp Duty Relief |
No stamp duty under £425,000 |
Shared Ownership Benefits
| Feature |
Details |
| Deposit needed |
5-10% of share bought |
| Example |
25% of £300,000 = £75,000 share |
| Deposit on share |
£3,750-£7,500 |
| You pay rent on |
Remainder (75%) |
| Can buy more |
“Staircasing” up to 100% |
Getting Help from Family
Family Support Options
| Method |
How It Works |
| Gifted deposit |
Parents give money |
| Family loan |
Informal borrowing |
| Guarantor mortgage |
Family provides security |
| Joint borrower sole proprietor |
Parents on mortgage, not deed |
| Family springboard |
Parents’ savings as security |
Gifted Deposits
| Consideration |
Details |
| Documentation |
Lenders need gift letter |
| Tax implications |
Usually none (PET rules) |
| Relationship proof |
May be requested |
| Repayment expectation |
Must be genuine gift |
Protecting Your Savings
Keep Your Deposit Safe
| Rule |
Why |
| Don’t invest deposit |
Risk of loss |
| Use FSCS-protected accounts |
£85,000 per institution |
| Spread large amounts |
Across different banks |
| Don’t touch it |
Maintain discipline |
Build Emergency Fund First
| Priority |
Amount |
| Emergency fund |
3 months expenses |
| Then deposit saving |
Everything else |
Common Mistakes
What to Avoid
| Mistake |
Why It’s a Problem |
| Not using LISA |
Missing 25% free money |
| Investing deposit |
Risk losing it |
| No emergency fund |
May need to raid deposit |
| Underestimating costs |
Surprised by fees |
| Saving inconsistently |
Slower progress |
Summary: Deposit Saving Checklist
Getting Started
| Action |
Done |
| Open Lifetime ISA |
☐ |
| Set up automatic transfers |
☐ |
| Build emergency fund |
☐ |
| Calculate target amount |
☐ |
| Set timeline |
☐ |
Maximise Savings
| Action |
Done |
| Max out LISA (£333/month) |
☐ |
| Cut major expenses |
☐ |
| Consider increasing income |
☐ |
| Review and adjust monthly |
☐ |
Before You Buy
| Check |
Done |
| Deposit reaches target |
☐ |
| Extra costs covered |
☐ |
| Emergency fund intact |
☐ |
| Mortgage in principle obtained |
☐ |
Saving for a deposit takes time and discipline. Use the Lifetime ISA for the 25% bonus, automate your savings, and stay focused on your goal. Every pound saved now means lower mortgage payments for decades.
aliases:
- /mortgages/first-time-buyers/saving-for-house-deposit/
Your home may be repossessed if you do not keep up repayments on your mortgage. PocketWise provides information and guidance — we do not offer financial advice. Seek independent mortgage advice before making decisions about borrowing.
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