The question every first-time buyer asks first is also the one with the most confused answers online. The honest answer for 2026 is: technically 5%, in practice 10%, comfortably 15%. Here is the maths behind that.
The minimum 5% deposit
All major UK lenders offer 95% loan-to-value (LTV) mortgages on residential purchases up to £600,000. That means a 5% deposit. On a £200,000 flat the deposit is £10,000. On a £350,000 house it is £17,500.
95% LTV mortgages exist but they come with significant downsides:
- The rate is typically 1.0 to 1.5 percentage points higher than at 75% LTV.
- Affordability testing is stricter; lenders stress-test the loan at 8% to 9% pretend rates.
- Some lenders cap the maximum loan size to four or four-and-a-half times income, lower than the higher LTV brackets.
- If property prices fall, you go into negative equity quickly.
Rate drops at each LTV band
Mortgage rates step down at 95%, 90%, 85%, 80% and 75% LTV. The biggest jump is from 95% to 90%, which is why so many first-time buyer guides suggest aiming for 10% rather than 5%. Indicative best-buy rates in May 2026 on a 5-year fix:
| LTV | Deposit | Indicative rate | Monthly (£300k) |
|---|---|---|---|
| 95% | 5% | 5.95% | £1,820 |
| 90% | 10% | 5.10% | £1,470 |
| 85% | 15% | 4.85% | £1,345 |
| 75% | 25% | 4.55% | £1,250 |
Going from 5% to 10% deposit on a £300,000 home saves around £350 a month. That is £21,000 over a 5-year fix, well over the extra £15,000 deposit. Going from 10% to 25% saves another £220 a month but ties up much more cash up front.
The affordability test
Lenders multiply your gross salary to set a maximum loan. Most cap at 4.5 times income, with some specialist lenders going up to 5.5x for professionals. They then run an affordability test at a stress rate (typically the standard variable rate plus 1%, around 9% in 2026) to check you can still afford the payments if rates rise.
For a £40,000 income, that gives a maximum loan of around £180,000. With a 10% deposit, the maximum property price is £200,000.
Realistic deposit by region
The 10% rule of thumb varies dramatically by region:
- North East England: average price £165,000. 10% deposit £16,500.
- Yorkshire: average price £220,000. 10% deposit £22,000.
- West Midlands: average price £260,000. 10% deposit £26,000.
- South East: average price £390,000. 10% deposit £39,000.
- London: average price £530,000. 10% deposit £53,000.
The costs people forget
On top of the deposit, budget for:
- Stamp duty: £0 for first-time buyers up to £300,000 in England/NI, otherwise see the stamp duty guide.
- Conveyancing: £1,200 to £2,500 including searches.
- Mortgage arrangement fee: £0 to £1,995, usually optional add-to-loan.
- Survey: £450 (Level 2) to £900 (Level 3) on a typical home.
- Moving and setup: £500 to £2,000 (removal, deposit on utilities, furniture).
Add £3,000 to £8,000 on top of the deposit for a smooth move.
First-time buyer help that still exists in 2026
- Lifetime ISA: 25% government bonus on up to £4,000 a year, payable on first home up to £450,000.
- Stamp duty relief: £0 SDLT on first £300,000 in England and Northern Ireland for first-time buyers.
- 5% deposit scheme: government guarantees the lender, all major banks participate.
- Shared ownership: buy a share, rent the rest. See the shared ownership guide for the real costs.
The Help to Buy equity loan closed to new applicants in 2023 and is not coming back.
Check the affordability before you offer
Once you have an address in mind, run a PropertyReportUK to see council tax, EPC, flood risk and sold prices in the building. The council tax band and EPC rating both feed into total monthly costs, not just the mortgage. Get a report.