Okay, decision time.
Do you buy now with 5% deposit? Or continue saving for 10%?
Both are on the table for first-time buyers. But they lead to pretty different places —
different borrowing, different LTV, different mortgage deals, different payments, maybe even a different rate.
So which one’s right for you? Let’s actually look at the numbers.
What does 5% deposit actually mean?
You put in 5% of the price. The bank covers the other 95%.
That’s what people call a 95% LTV mortgage.
Example if buying a house priced at £200,000:
Purchase Price: £200,000
Your 5% deposit: £10,000
Mortgage: £190,000
LTV: 95%
What does 10% deposit mean?
Same idea, just doubled up. You put in 10%, bank covers 90%.
Same £200,000 house:
Purchase Price: £200,000
Your 10% deposit: £20,000
Mortgage: £180,000
LTV: 90%
So you’d need to find another £10,000 in savings. But in return, your mortgage shrinks by
£10,000 too.
Let’s see it across different price points
Property Price 5% Deposit 10% Deposit Extra Cash Needed
£150,000 £7,500 £15,000 £7,500
£200,000 £10,000 £20,000 £10,000
£250,000 £12,500 £25,000 £12,500
£300,000 £15,000 £30,000 £15,000
£350,000 £17,500 £35,000 £17,500
£400,000 £20,000 £40,000 £20,000
See the pattern? The pricier the house, the bigger the gap between 5% and 10%.
Why go with a 5% deposit?
One word: speed.
You get on the ladder sooner.
Saving that extra 5%? That can take a while. Say you’re eyeing a £300,000 place. The gap
between 5% and 10% is £15,000.
If saving that takes you two more years, that’s two years of not owning a home, and maybe prices increasing.
For a lot of people, 5% deposit means buying now instead of buying later.
What’s the catch with 5% deposit?
A few things to weigh up.
You’re borrowing more.
£250,000 house, 5% deposit? You need a £237,500 mortgage.
Same house, 10% deposit? Just £225,000.
That’s £12,500 less debt, straight away.
Rates might not be as good.
Mortgages are grouped into LTV bands. A 90% LTV mortgage can have different products,
higher rates, than a 95% LTV one.
Doesn’t automatically mean 90% is better. But it’s worth comparing when you’re actually
ready to buy.
You start with less equity.
Equity is basically: house value minus what you owe.
Bigger deposit, bigger equity from day one.
Why does that matter? Because house prices can drop as well as rise. Less equity means less of
a buffer if that happens.
What’s the upside of going 10%?
Moving from 95% to 90% LTV brings a few wins:
You borrow less
You start with more equity
You will have more mortgage products to choose from
You will have lower interest rates
Usually lower monthly payments (though that depends on your actual rate and term)
Should I throw every penny at the deposit though?
Hold on. Slow down.
Say you’ve got £22,000 saved and you’re eyeing a £200,000 house.
Technically, £20,000 gets you a 10% deposit. But that leaves just £2,000 for everything
else.
And “everything else” is a long list:
Conveyancing costs (solicitor fees)
Survey costs
Mortgage fees
Moving costs
Furniture
Decorating
Repairs
Insurance
Emergency savings
Sometimes putting down £15,000 and keeping £7,000 back leaves you in a much better
spot than maxing out the deposit and having nothing left.
There’s no universal right answer here. It’s about your situation.
Is it worth just… waiting for 10%?
This is really the question, isn’t it.
Ask yourself:
How long would the extra 5% actually take to save? Two months feels totally different from two years.
What mortgages are actually available at 95% vs 90%? Don’t guess. Check the real
market when you’re ready.
What would the monthly payments look like, realistically? Run the actual numbers, not
vibes.
Would hitting 10% wipe out my savings entirely? Owning a home with zero safety net is
risky. Boilers break. Roofs leak.
How badly do I want to buy right now? Your life circumstances count too. Not everything
is a spreadsheet decision.
Could I go even higher than 10%?
Sure, nothing stops you.
15%, 20%, even 25% deposit moves you into even lower LTV bands, which can mean even
more mortgage choice. Ultimately, a larger deposit means a smaller mortgage, lower interest rates, which lead to lower monthly payments.
But there’s a limit to this logic. You can’t save forever chasing an ever-bigger deposit.
The goal isn’t “biggest deposit possible.” It’s finding the sweet spot between:
Deposit + what you can actually afford + buying costs + emergency savings.
Also check the difference in interest rates available at the time.
5% vs 10%: the quick comparison
5% Deposit 10% Deposit
Typical LTV 95% 90%
Cash needed upfront Lower Higher
Mortgage required Higher Lower
Starting equity Lower Higher
Product choice Possibly more limited Possibly wider
Time to save Possibly shorter Possibly longer
Savings left over Possibly more Depends how much you use
Quick-fire FAQs
Can a first-time buyer actually get a 5% deposit mortgage? Yes, 95% LTV mortgages
exist for eligible buyers. Depends on the lender, the property, and what’s available at the
time.
Will 10% deposit get me a better rate? Generally yes, but not guaranteed. Different LTV bands have
different products. Always compare what’s actually on offer when you’re buying.
Is 10% deposit “enough” for a first-time buyer? It generally means borrowing around 90% of the
property value. Whether that’s “enough” depends entirely on your affordability, the property price and
your situation.
Should I just wait until I’ve got 10%? Not automatically. Weigh the extra saving time
against your options, your monthly payment, your plans, and how much savings you’d have
left.
The bottom line
5% deposit can get you moving faster. 10% deposit means less debt and possibly better deals.
Neither is automatically “right.”
What actually matters:
How much will I be borrowing?
What’s the monthly cost?
How long will the extra saving actually take?
What will I have left once I’ve bought?
Answer those honestly, and you’ll know which one’s right for you — no guesswork needed.
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The author of this blog holds professional qualifications as both a UK Mortgage Advisor (CeMAP) and Financial Advisor (DipPFS). However, this blog operates strictly as an independent platform for educational and informational purposes. It is not a trading or operating vehicle for an FCA-authorised financial services firm.
Financial criteria, mortgage interest rates, tax laws, and lender guidelines change frequently. While we aim for accuracy, this content should not be relied upon to make financial choices. A full, regulated individual assessment is necessary before any financial product can be safely recommended. If you require formal, regulated advice, you must contact an active FCA-Authorised Professional