How Much Deposit Do I Need to Buy a House?

When you’re thinking about buying, one of the first big questions is:“How much deposit do I actually need?”

For most buyers in Wales, deposits are typically between 5% and 20% of the purchase price. That means:

• At 5% deposit, you’re borrowing 95% loan-to-value (LTV)

• At 20% deposit, you’re borrowing 80% LTV

LTV is how lenders measure risk:

Higher LTV = higher risk to the lender = usually higher interest rates and fewer product choices. Lower LTV = lower risk = better rates and more choice

Deposit vs LTV – a simple breakdown

Let’s use a purely illustrative example property price of £270,973. Here’s what different deposits look like:

• 5% deposit → £13,549 → 95% LTV

• 10% deposit → £27,097 → 90% LTV

• 15% deposit → £40,646 → 85% LTV

• 20% deposit → £54,195 → 80% LTV

The more you can put down, the better your LTV band and the stronger your position when you come to apply.

95% LTV mortgages – what you need to know

High LTV (like 95%) mortgages are designed for people with smaller deposits. Some lenders still offer 5% deposit products, often aimed at first-time buyers.

Key points:

• 5% is usually the minimum deposit you’ll need to buy

• 95% LTV is higher risk for both lender and borrower

• If prices fall, you’re more exposed to negative equity (home worth less than your mortgage)

• Lenders generally price this in – so 95% LTV mortgages usually have higher interest rates and fewer options

So while 5% can get you on the ladder, it’s strongly recommended to save more if you can:

• Better choice of lenders and products

• Lower monthly repayments

• Less risk if prices move

How to work out the deposit you need

There are two big variables to think about:

1. What you can genuinely afford

2. The likely property price and associated costs

What can you afford?

Don’t just look at the mortgage payment in isolation. Factor in:

• Day-to-day living costs

• Council tax

• Utilities (gas, electric, water, broadband)

• Travel and commuting

• Insurance and maintenance

• Food, subscriptions, childcare, etc.

Use our Mortgage Calculator as a rough guide for:

• How much you might be able to borrow

• What your monthly repayments could look like

Once you see those numbers, overlay your actual budget and see if it’s genuinely comfortable.

Mortgage Calculator

Property price

Your deposit target will be a percentage of the property price, so you need a rough idea of:

• The area(s) you’re likely to buy in

• Typical prices for the kind of property you want (flat, terrace, semi, etc.)

Use:

• Property portals

• Local estate agent sites

• Sold price data

You won’t get an exact number, but you’ll get a ballpark to aim at — e.g. “We probably need £30–40k to be at 10–15% deposit in this area.”

How to save for a deposit (while still renting)

Saving while paying rent is hard, but not impossible. The key is structure and trade-offs.

Practical ideas:

• Set a monthly savings target and treat it like a non-negotiable bill

• Downsize to a cheaper rental or house share

• Move back in with family short term (if that’s an option)

• Live with more people to share rent and bills

• Rent slightly outside city centres where rents can be lower

• Cut back on non-essentials (daily coffees, takeaways, impulse buys)

• Sublet a room (only if your tenancy agreement allows it)

• Sell unused items and throw the lump sums into savings

• Use higher-interest ISAs or savings products instead of leaving money in a low-interest current account

Small cuts, consistently applied, make a bigger difference than one-off heroic sacrifices.

How long does it take to save a deposit?

It varies massively, depending on:

• Your income

• How aggressively you save

• The property price you’re aiming at

• Where you live / want to buy

Illustrative example:

• Property price: £270,973

• Target deposit: 15% = £40,646

• Household income: £29,900

• Saving 20% of income per year = £5,980 (~£498/month)

At that pace, it would take around 8 years to reach £40,646.

Reality check:

• Higher earners, couples, or those in cheaper areas = faster

• Lower incomes or more expensive areas (e.g. major cities) = slower

The point isn’t the exact number — it’s to show why planning, schemes and family help often matter.

If you’re struggling to save

You’re not alone. Very few people buy entirely solo with no help.

Options to explore:

• Help to Buy – Wales (shared equity loan on new-builds, subject to criteria)

• Shared Ownership – Wales (buy a share, pay rent on the rest)

• Lifetime ISA (for eligible savers, with a government bonus)

• “Bank of Mum & Dad” – gifted deposits or family-assisted mortgages

• Buying with a partner, friend or family member

A mortgage adviser who understands Welsh schemes can help you navigate which of these, if any, are appropriate.

Why it’s worth saving a higher deposit

Yes, it’s hard. But there are real advantages to pushing your deposit higher if you can:

1. Lower interest rates

Bigger deposit = lower LTV.Lower LTV usually opens up cheaper mortgage products.

2. Lower monthly repayments

If you borrow less:

• Your monthly payments are smaller

• Affordability checks are easier to pass

• You have more breathing room in your budget

3. Easier application process

When lenders assess you, they look at:

• Income and employment

• Incomings vs outgoings

• Credit reports and history

• Size of deposit and LTV

If the required monthly repayment is lower, it’s much easier for your figures to pass their stress tests.

4. Less risk of negative equity

With a higher deposit:

• You own a bigger slice of the property from day one

• You’re less exposed if prices dip in the short term

This gives you more flexibility if you ever need to sell or remortgage.

5. More choice

• Lenders usually cap what they’ll lend as a multiple of your income

• A bigger deposit can bridge the gap between what you can borrow and what the property costs

• That often means more locations and property types are realistically in reach

If your salary is on the lower side, a higher deposit is sometimes the only way to make a particular purchase viable.

Need a mortgage adviser?

If you’re trying to figure out how much to save, what’s realistic for you, and what schemes or lenders might help, don’t guess.

At Martin & Co, we can connect you with an approved mortgage adviser who will:

• Look at your income, deposit and goals

• Show you what’s realistic now vs what it would look like with a bigger deposit

• Explain Help to Buy – Wales, Shared Ownership and other options where appropriate

• Help you find a mortgage deal that actually fits your life, not just a headline rate

Schedule a call with our Mortgage Adviser

Your home may be repossessed if you do not keep up repayments on your mortgage.