How much do you need to save for a house deposit?
The short answer: saving £500 a month, a 10% deposit on a £250,000 home plus about £3,000 of buying costs takes about 4.3 years with 4% interest. A 5% deposit takes about 2.5 years. A Lifetime ISA can cut those times by adding 25% on up to £4,000 a year.
How long it takes, by price and deposit
Each target includes about £3,000 for solicitor, survey and moving costs. First-time buyers pay no stamp duty up to £300,000 in England and Northern Ireland.
| Home price | Deposit | Total to save | At £300 a month | At £500 a month |
|---|---|---|---|---|
| £200,000 | 5% | £13,000 | 3.4 years | 2.1 years |
| £200,000 | 10% | £23,000 | 5.8 years | 3.6 years |
| £200,000 | 15% | £33,000 | 7.8 years | 5 years |
| £250,000 | 5% | £15,500 | 4 years | 2.5 years |
| £250,000 | 10% | £28,000 | 6.8 years | 4.3 years |
| £250,000 | 15% | £40,500 | 9.3 years | 6 years |
| £300,000 | 5% | £18,000 | 4.6 years | 2.9 years |
| £300,000 | 10% | £33,000 | 7.8 years | 5 years |
| £300,000 | 15% | £48,000 | 10.8 years | 7 years |
Buying as a couple, each saving the same amount, roughly halves these times.
Why the deposit size matters
Lenders price mortgages by loan-to-value (LTV): the share of the price you borrow. The best rates usually start at 75% or 60% LTV, and 95% mortgages cost more. A bigger deposit also lowers how much you need to borrow, which matters because lenders usually cap loans at 4 to 4.5 times income. See how much you can borrow.
The Lifetime ISA boost
If you are 18 to 39 and buying your first home for £450,000 or less, a Lifetime ISA adds 25% to what you pay in, on up to £4,000 a year. Saving £333 a month towards £30,000:
- The account must be open for at least a year before you use it to buy.
- Withdraw for anything other than a first home or retirement from 60 and you pay a charge, now 20% (it was 25%).
- The £450,000 price limit has not changed for years, which matters in London and the South East.
Ways to get there sooner
- Automate it: move the money on payday.
- Cut rent temporarily: a cheaper flat or living with family can save more than any account.
- Clear debts first: car finance and card balances reduce what lenders will offer.
- Use schemes: some lenders offer 5% deposit mortgages, and shared ownership lets you buy a share of a home with a smaller deposit.
- Family help: a gifted deposit is common, and lenders will want a letter confirming it is a gift.
Budget for the costs on top
Solicitor or conveyancer, survey, lender fees and moving can easily come to £2,000 to £4,000. If you have owned a home before, or the price is over £300,000, add stamp duty; see the stamp duty calculator and first-time buyer stamp duty relief.
Once you have a deposit, check what the monthly payment would be with the mortgage calculator, and see how long it takes to save £10,000 for monthly saving targets.
Gifted deposits
Many first-time buyers get help from family. Lenders accept gifted deposits, but they will want a signed letter from the giver confirming it is a gift, not a loan, and that they will have no share in the property. They will also check where the money came from. For the giver, a large gift is a potentially exempt transfer for Inheritance Tax and becomes fully exempt after seven years. See the 7-year rule for gifts.
If the money is a loan, tell the lender: it counts as a debt and will be part of the affordability check.
Saving with a partner or friend
- Agree the split: if you put in different amounts, record it. A declaration of trust, drawn up by your solicitor, sets out who owns what if you sell or split up.
- Two Lifetime ISAs: each buyer can have one, so a couple can get up to £2,000 a year in bonuses together.
- Both must be first-time buyers for the first-time buyer stamp duty rates and to use a Lifetime ISA without a charge.
Low-deposit mortgages
95% mortgages are widely available, supported by a government guarantee scheme for lenders. The rates are higher than with a bigger deposit, and you are more exposed if prices fall. Saving to 10% often brings a noticeably lower rate, so it can be worth waiting a few months if you are close.
Related reading: how council tax bands work.
Examples assume a steady 4% interest rate and no tax on interest. House prices and lending criteria change.
Common questions
How long does it take to save for a house deposit?
For a 10% deposit on a £250,000 home, plus about £3,000 of costs, saving £500 a month takes about 4.3 years with 4% interest. A couple saving £500 each would take about half that.
How much deposit do I need for a house?
At least 5% of the price for most lenders, but 10% or more gets noticeably better rates, and 15% to 25% better still. Keep a few thousand pounds extra for fees and moving.
Is a Lifetime ISA worth it for a house deposit?
Usually, if you are a first-time buyer aged 18 to 39 buying a home under £450,000. The government adds 25% on up to £4,000 a year, so up to £1,000 a year free. The charge for withdrawing it for anything else has been cut from 25% to 20%.
Can I use my pension for a house deposit?
Not in the UK before age 55 (57 from April 2028). A Lifetime ISA is the closest equivalent for first-time buyers.
Is it better to save a bigger deposit or buy sooner?
It depends on rents and prices where you live. A bigger deposit cuts your rate and monthly payment, but each year of saving costs you a year of rent.