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Service Status: The current lockdown means our branch opening hours have changed. Please check our branch locator if you need to visit for the latest information.
The safest way to bank with us right now is from home either using our app or through Internet Banking.
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Saving for a mortgage deposit is your first step towards buying your first house – but it can be a big step for many.
Typically, your deposit should cover between 5% and 15% of the total purchase price of your property.
For example, with a property worth £200,000 a 5% deposit is £10,000. A 15% deposit would be £30,000. Putting together a savings plan can help you reach this milestone.
And remember, your deposit isn’t the only thing you’ll need to budget for when buying a new home – there’s moving day, fees and a few other costs to consider. Read more about how much buying a house may cost.
The minimum mortgage deposit you’ll need is usually 5% to 15% of the total value of your house. Your mortgage provider will then lend you the money to cover the rest. If you can afford a larger deposit, it can mean lower monthly repayments.
The value of your deposit will vary depending on property prices in your area. In the early part of 2018, the average deposit for first-time buyers was 16%.
There are lots of ways you can save for a deposit – from simple lifestyle changes to using government schemes. Some ways people save for a mortgage include:
Other ways to build up a deposit
Saving is only the first step – making these savings work for you is the next step.
To make the most of your savings, choose a savings account that offers a high interest rate. These will usually be fixed savings accounts or ISAs, where you can’t withdraw money from during a fixed period.
If you go for an ISA with a fixed term, make sure it lines up with your moving timeline so you can access the money for the deposit when you need it.
We can’t offer financial advice, so speak to an impartial financial adviser for more tips on making the most of your savings.
Every lender will consider different criteria, but these are some of the common elements they’ll look at when deciding which interest rate to offer.
Credit history
Your credit score influences the mortgage rate you’re offered, as it shows your track record of paying off loans and whether you’re likely to keep up with your mortgage repayments.
Deposit size
The money you borrow when you take out a mortgage is worked out by taking away your deposit from the purchase price of your new home. A higher deposit gives a better loan to value ratio. A better loan to value ratio means you’ll probably be offered lower interest rate deals.
Length of the mortgage term
If you choose a mortgage that’s repaid over a shorter period, you may have higher monthly payments, but pay less interest.
If your mortgage repayments are spread over a longer time, you may pay less on your repayments, but more interest. A mortgage adviser can help to recommend a term that works for your circumstances.
If you’re still renting and looking to make the switch to home ownership, it can be tough to balance monthly rental payments and saving for a mortgage.
Saving for a deposit while paying rent can seem daunting, there are a few things you can do to make it easier:
The content on this page is for reference and does not constitute finance advice.
For impartial financial advice, we recommend government bodies like the Money Advice Service.
Find out more about mortgages.
We have a range of mortgage calculators to help you:
You can talk to us over the phone or use our mortgage video service from the comfort of your own home.
Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.
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