"How much do I need to save?" is almost always the first question we are asked, and the honest answer is that there are two numbers: the smallest deposit a lender will accept, and the deposit that gets you a deal worth having. They are rarely the same.
This guide walks through what each deposit size realistically buys you in Bristol and across the South West, where the extra costs hide, and how people get to their number faster than they expected.
Why lenders ask for a deposit at all
A deposit is the lender's safety margin. If they lend you 95% of a property's value and prices dip, there is very little room between what you owe and what the property is worth. Put down more, and that risk shrinks, which is why the pricing improves as your deposit grows.
The shorthand for this is loan to value, or LTV: the slice of the purchase price you are borrowing. A 10% deposit is a 90% LTV mortgage. Lenders price in bands, and crossing into a lower band is where the savings appear.
The 5% starting point
For most buyers, 5% is the realistic floor. It is enough to get you onto the ladder and there are lenders who will work with it, but the rates at 95% LTV sit at the expensive end of the market and the choice of lenders is narrower. New build flats in particular can be harder to place at that level.
If you are close to 5% and could reach 10% within a few months, it is worth running both scenarios before you commit. Sometimes waiting is the cheaper move; sometimes a rising asking price in your area cancels the benefit out. That is a numbers question, not a matter of opinion, and it takes ten minutes to answer properly.
What a bigger deposit actually buys you
The bands that matter most in practice, and what changes as you move through them:
- 5% deposit (95% LTV): you can buy, but from a smaller pool of lenders and at the higher end of the rate range.
- 10% deposit (90% LTV): a noticeably wider choice of lenders and a meaningful step down in rate for most buyers.
- 15% deposit (85% LTV): more competitive still, and it opens up lenders who are stricter about credit history or income type.
- 25% deposit (75% LTV): close to the best of the mainstream market, and the level most buy-to-let lending starts at.
- 40% deposit (60% LTV): the headline rates you see advertised usually sit here.
The jump from 5% to 10% is usually the single most valuable pound-for-pound saving a buyer can make. After 25%, the improvements get much smaller.
If your credit history has a few bumps
Missed payments, defaults or a past arrangement to pay do not rule you out, but they change who will lend to you. Specialist lenders who are comfortable with adverse credit typically want to see at least 15% down, sometimes more, depending on how recent and how serious the issue was.
The good news is that these things fade. A default from four years ago is treated very differently from one from four months ago, and knowing exactly what is on your file lets you plan around it rather than guess.
Buy-to-let works differently
If you are buying to rent out rather than to live in, expect to put down at least 25%. Buy-to-let lending is also assessed on the rent the property should achieve rather than only on your income, so a strong rental figure in Bristol can matter as much as your salary does.
Gifted deposits
A gift from family is completely normal and lenders see it every day. What they need is clarity: a short letter from whoever is gifting confirming it is a gift and not a loan, that they keep no stake in the property, and evidence of where the money came from. Expect the solicitor to ask for bank statements as part of standard anti-money-laundering checks.
A loan for a deposit is a different matter. Borrowing your deposit affects affordability and most lenders will not accept it, so tell your adviser early if that is the plan.
The costs that sit on top of the deposit
The deposit is the big number, but it is not the only one. Budget for these as well:
- Stamp Duty Land Tax (SDLT): nothing below £125,000, then rising in bands above it. First-time buyers pay nothing up to £300,000, as long as the property costs £500,000 or less.
- Legal fees and searches, typically somewhere in the four figures once disbursements are included.
- A survey, from a basic valuation up to a full building survey on an older property.
- Lender product or arrangement fees, which can sometimes be added to the loan.
- Removals, and the deposit and first month on any rental you are leaving.
Our stamp duty calculator on the homepage will give you the SDLT figure for any purchase price in Bristol in a couple of seconds, including the higher rates if this would be an additional property.
Talk it through with an adviser in Bristol
Every case is different, and how much to put down is one of those decisions where a half-hour conversation saves months of second-guessing. Our advisers work across Bristol and the South West, search the whole market, and never charge you a fee: we are paid by the lender, not by you. We can often have an Agreement in Principle arranged within 24 hours of speaking to you.
Call 0800 069 9110, 7 days a week, or send us a message and we will call you back at a time that suits.
This article is general information, not advice for your circumstances. Your home may be repossessed if you do not keep up repayments on your mortgage. Speak to an adviser about what is right for you.
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