If you are trying to save for a house deposit while paying rent, you already know the struggle. Every month, hundreds of pounds disappear into your landlord’s pocket instead of building your own equity.
According to ONS 2024 data, the typical UK household manages to save just £180 per month. More recent research from Barratt Homes in 2025 shows Gen Z is doing slightly better at £275/month, with Millennials saving around £245/month.
With average UK house prices sitting at around £250,000 (rising to £300,000 in the South West where we are based), this means for a traditional 10% deposit you need £25,000 for the average UK home, or £30,000 in the South West.
At the typical saving rate of £180/month, that is nearly 12 years of perfect saving. Even the more optimistic Gen Z rate of £275/month still means over nine years of waiting.
The market has quietly adapted
Many people do not realise that the ‘you need 10% minimum’ norm is now outdated.
Lenders have introduced higher income multiples and, crucially, much lower deposit requirements. Some deals now start from as little as £5,000 or even zero in specific circumstances, making home ownership closer than you may think.
Yes, a smaller deposit means a slightly higher interest rate. But that may well be worth it, if you can save yourself several years of rental payments, or want to keep some money back to spend on getting your new home looking the way you want it.
Getting on the ladder sooner often makes more financial sense than waiting for the ‘perfect’ deposit.
What deposit do you actually need?
We work with first time buyers at all deposit levels. Here is what is available in the market right now.
You can buy with no deposit at all if you fit specific scenarios. There are a handful of lenders who will help if you are permanently employed and can prove you have been paying rent for a year. Or if you are buying at a discount from a family member or landlord (the discount acts as the deposit). Or if you are buying a newbuild where the developer gives you a 5% deposit contribution. You will need great credit history for these deals, and they are not common, but they exist.
You can buy with £5,000 or even 1% deposit if you are a first time buyer prepared to fix for five years. Lenders such as Accord, Newcastle and Vida offer options starting at £5,000 or 1% deposit, and some are open to self-employed applicants too. Again, credit scoring matters here.
Most people can get a 5-10% deposit mortgage. Once you have saved around 5%, you have opened the door to over 50 lenders. Credit scoring is a bit stricter than if you have a bigger deposit, and the rate is 0.3% to 0.5% higher than a 10% deposit mortgage, but there are lots of options (unless you are buying a newbuild flat).
A 10-15% deposit gets you better rates and more options. At this level, almost all lenders are available to almost all people. Rates are usually 0.1% to 0.3% higher than a 15% deposit mortgage. There are still a few restrictions on newbuild flats.
A 15-25% deposit means you have access to all funders. Unless you are looking at buying a flat over a shop on a high street, or next to somewhere noisy or smelly, you should have options. Rates are very competitive, only 0.1% to 0.2% higher than a 25% deposit.
The pattern is clear. Every extra 5% you save opens more doors and shaves a bit off your rate. But the jump from 5% to 10% only costs you about 0.3% to 0.5% in interest. That is much less painful than most people assume.
The ‘Bank of Mum and Dad’ (and friends)
Over half of the first time buyer applications we handle include some form of family support.
The market has adapted here too. Lenders used to only accept deposit gifts from parents or siblings. Now, many will accept help from wider family and friends. That increases your options if your own family cannot contribute.
Bear in mind that any gifted deposit needs to come with a ‘gifted deposit letter’ confirming the money does not need to be repaid. We see the full range of circumstances, and we can guide you through exactly what documentation you will need.
Proving where your deposit came from
Wherever your deposit comes from (savings, gifts, bonuses, inheritance), lenders must verify it. This is a legal requirement to prevent money laundering.
You will need a year’s worth of bank statements showing the deposit building up, a signed letter from anyone gifting money, and proof of where the gifter’s funds came from.
This can feel intrusive, but it is standard practice across all lenders. For a comprehensive breakdown of what documents you will need, check out our detailed guide on proving your source of funds.
The real question
A bigger deposit gets you a lower rate. But waiting another 5-10 years to save that deposit costs you far more in lost rent than you will ever save in interest.
The market has created genuine routes onto the ladder with deposits at 5%, or even lower in specific cases.
Every situation is different. Your income, credit history, location and the type of property you want all affect which deals are available to you. The only way to know for certain is to run the actual numbers.
Book a no-obligation chat with us. We will show you exactly what deposit you need, what rates you can access, and whether getting on the ladder sooner makes financial sense for you. No sales pressure, just honest advice.
Because your mortgage shouldn’t cost the earth.
Remember, your home may be repossessed if you do not keep up repayments on your mortgage.
