How Much Deposit Do You Really Need in 2026?

The honest answer is: considerably less than the traditional 20% many people assume, though the size of your deposit still meaningfully affects your rate, your monthly payment, and your lender options. Here’s the current picture.

The minimum: 5%

Since the Mortgage Guarantee Scheme was made permanent in July 2025, 95% loan-to-value mortgages - requiring just a 5% deposit - are available through more than 500 participating lenders, on residential properties up to £600,000. This is a genuinely low entry point, though it comes with trade-offs worth understanding.

Why a bigger deposit still usually means a better deal

• Lower interest rates are generally available at lower loan-to-value ratios - a 90% or 85% mortgage typically carries a meaningfully better rate than a 95% one, since the lender’s risk is lower.
• Lower monthly payments, both from the smaller loan amount itself and the typically better rate.
• More lender choice - some lenders don’t offer 95% deals at all, or restrict them to specific circumstances, narrowing your options at the lowest deposit tier.

The average first-time buyer deposit in practice

Despite the 5% minimum being available, actual first-time buyer deposits average considerably higher - estimates range from around £54,000 to £63,000 nationally, typically around 20% of the purchase price, reflecting that many buyers either save more than the minimum or receive help from family (Savills research found 52% of first-time buyers get some parental contribution).

Why 10% is often treated as a practical middle ground

Many mortgage advisers suggest 10% as a reasonable target where possible - meaningfully better rates than 95% deals, without needing to save as long as a full 20%. Whether this is realistic depends heavily on your specific area’s average property price and your saving capacity, particularly given rents (currently averaging £1,383 a month nationally) simultaneously competing for the same disposable income.

What a 95% mortgage actually restricts

• Repayment mortgages only - the Mortgage Guarantee Scheme doesn’t support interest-only lending.
• Residential properties only, up to £600,000 - no buy-to-let or non-standard construction.
• Standard affordability and credit checks still apply in full - the guarantee protects the lender, not the borrower, and doesn’t relax the underlying affordability assessment that determines how much a lender will actually offer you.

A worked comparison

On a £200,000 mortgage over 30 years, moving from a 95% to a 90% deposit typically both reduces the loan amount and often unlocks a better rate - the combined effect on monthly payments can be more significant than the deposit percentage difference alone might suggest, which is why even a modest amount of additional saving before applying can be worthwhile if your timeline allows it.

The bottom line

You genuinely only need 5% to get on the property ladder in 2026, thanks to the now-permanent Mortgage Guarantee Scheme - but every additional percentage point you can save typically improves your rate and widens your lender choice, so the decision isn’t simply ‘can I afford the minimum’ but ‘is waiting to save more worth the trade-off against getting on the ladder sooner’ (see our dedicated article comparing these two paths directly).