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Mortgage deposit calculator

Find out how long it could take to save money for a house deposit with our mortgage deposit calculator.

gocompare author
Updated 6 September 2021  | 3 min read

Mortgage deposit calculator

Saving for a deposit for your first home can feel like an uphill struggle, especially if you’re spending thousands on renting or if you’re on a low-income.

First-time buyers in the UK would need more than £11,000 on average to put down just a 5% deposit in June 2021. That figure doubled in Greater London, where an average first-time buyer price of £443,193 would need at least £22,000 to put down a 5% deposit.[1]

Our mortgage deposit calculator can help you get a clearer picture of how long it will take you to save for a deposit, depending on the price of the property you’re looking at, the percentage of the price you want to put down as a deposit and how much you can realistically save a month.

Note: The following calculator has been designed to give a useful general indication of costs. GoCompare accepts no responsibility if the results of any calculator are incorrect. The results provided are for guidance only and should not be considered a legitimate mortgage quote.

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What’s a deposit?

A mortgage deposit is a lump-sum of money you put down towards paying for a property.

You borrow the rest of the money you borrow from a mortgage lender.

How much deposit do I need to buy a house?

You’ll usually need a deposit of at least 5% of the property price.

But the more money you can put down, the better.

A bigger deposit will mean you’re more likely to be accepted for a mortgage.

It’ll also give you access to better mortgage deals, with lower interest rates and lower monthly repayments. And of course, you’ll have a smaller loan to repay.

You may come across the term ‘loan-to-value (LTV) ratio’ when you’re looking at saving for a mortgage deposit. The LTV is the proportion of the money you’re borrowing for a property.

For example, if you’re buying a home for £200,000 and have a £20,000 deposit to put down, that’s a 10% deposit, meaning you borrow 90%. The LTV ratio is 90%.

How to save for a deposit quickly

Paying off your debts first can make financial sense. Interest rates on credit cards and overdrafts are usually much higher than on savings accounts. So using some of your savings to clear your most expensive debts is a good move.

For other savings, you could look to change to utility providers that offer cheaper deals, search for somewhere cheaper to rent (or move in with parents), plus cut back on ‘luxuries’ like as eating out.

If you find it difficult to save, free banking apps such as Plum or Snoop analyse your spending and automatically put money away for you.

And it’s well worth looking at setting up a Lifetime Isa (LISA). It’s a savings account designed to help you buy a first home costing up to £450,000. You can save up to £4,000 a year and receive a 25% bonus of what you pay in.

How much will you need to buy your first home?

The average price of a house in the UK was £266,000 in June 2021, according to the Office for National Statistics and the average price paid by first-time buyers was £223,000.

Prices vary vastly around the country, though. For example, the cheapest place to buy a house is the North East (£150,000 average). The average house price in Scotland is £174,000, in Wales £195,000 and in England £284,000.

So, if you are looking to buy a house for £200,000:

  • For a 5% deposit (95% LTV) you’ll need £10,000
  • For a 10% deposit (90% LTV) you’ll need £20,000
  • for a 20% deposit (80% LTV) you’ll need £40,000

Look into the government’s ‘Help to Buy’ schemes, which offer first-time buyers equity loans, interest-free for five years, on the price of new-build homes. You’ll still need to find at least a 5% deposit.

How much deposit do I need if I'm self-employed?

Because the self-employed tend to have fluctuating incomes, lenders see them as riskier to lend to. But, as long as you can show a healthy set of accounts, you should have access to the same mortgage deals as employed people.

As is the case with any mortgage, the bigger deposit you put down, the better the deals you’ll be able to take advantage of. If you haven’t been trading for long, then a large deposit could give you a wider choice of lenders.

How much deposit do I need if I have bad credit?

Black marks on your credit score – even if you’ve been declared bankrupt, have defaults or county court judgements against you – won’t necessarily mean you won’t qualify for a mortgage.

You may not have access to mortgages offering the lowest interest charges, though, and you might be required to put down at least a 25% deposit. This will vary from lender to lender and a mortgage broker could help you find the best offerings.

Can I buy a house without a deposit?

100% mortgages – where you borrow the total cost of a property without having to put down a deposit - are rare.

They only ones you’ll find are guarantor mortgages – mortgages guaranteed by a parent or close relative. If the borrower hasn't got a deposit, the guarantor can offer their own property or savings as security to cover the deposit percentage.

There are risks, though. If house prices fall, you could find yourself in what’s known as ‘negative equity.’ This is where your home becomes worth less than the amount of money you have borrowed.

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[1]Based on an average First-time buyer price of £222,712 in the UK House Price Index in June 2021.

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