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How much deposit do I need to buy a house?

It’s the big question. Anyone considering buying property for the first time knows that they will have to put down a large lump sum – but exactly how large does it have to be?


In recent years the general rule has been that you’ll need (at least) 10% of the property’s value in cash, with the other 90% coming from a mortgage. Mortgage lenders reward higher deposits with lower interest rates and better all-round deals, and of course the more equity you have in your property, the more security you have. 

However, in March this year the government announced a new scheme that enables first time buyers to access 95% mortgages, bringing their deposits down to just 5%. To put this in context: in April 2021, the average property price in the UK was around £251,000. So a 5% deposit for an average property would be about £12,550, compared to £25,100 for a 10% deposit.

The good news is that now is a great time to be getting a mortgage, according to Aaron Strutt  from Trinity Financial. He says: “Banks and building societies have been reducing the cost of their rates for quite a while and they are incredibly cheap. The best two and year fixes are available below 1 per cent, while 10 per cent deposit rates start at 2.30%.”

The best deals are offered to people with a lower loan to value (LTV), so for the lowest rates you will typically need to have a deposit of between 25 and 35 per cent, which is difficult to achieve for most first-time buyers. But there can be a lot of variation in what lenders are willing to lend, notes Aaron, who points out that: “first-time buyers tend to want advice to make sure they are getting the best deal. It is not uncommon for borrowers to approach their bank and find out they will not lend them enough money, they then ask for help to find a more generous lender often with better rates.”

What does an average price property look like? Here are three properties currently on the market at £250,000, yours with a deposit of £12,500.

Saxon Road, Exeter EX1, £250,000

This three bedroom house in Exeter is in need of some updating but is well located for shops, schools and access to the city centre. 

Please contact Winkworth Exeter 01392 271177 for further information.

Gleneldon Road, London SW16, £250,000

This studio in Streatham inhabits the top floor of an attractive Victorian villa, with a spacious living area and access to a shared garden.

Please contact Winkworth Streatham 020 8769 6699 for further information.

Yelverton Close, Norwich NR6, £250,000

This extended two bedroom bungalow in Norwich has lots of space and light, plus an impressive garden. 

Please contact Winkworth Hellesdon, 01603 881010 for further information.

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