Think you need a 20% deposit to buy a home? Think again.
There’s a lot of outdated advice floating around when it comes to buying your first home. One of the most common is that you’ll need to save a 20% deposit before you can even think about applying for a mortgage.
But here’s the truth: while a 20% deposit could unlock better mortgage rates, it’s not essential. In fact, there are plenty of ways to get on the ladder with far less — and some buyers don’t need to save a deposit at all! Here’s everything you need to know.
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How much deposit do you actually need?
Although the average first-time buyer deposit is 20% of the total property price, many first-time buyers put down between 5% and 10%. So if you’re buying a £250,000 home, a 5% deposit would be £12,500. That’s much more achievable than the £50,000 you’d need for 20%! Today, plenty of mainstream lenders accept smaller deposits, and there are government-backed schemes designed specifically to help low-deposit buyers too.
And don’t forget you could boost your existing savings by up to £1,000 a year with a Lifetime ISA. Save up to £4,000 a year in your LISA and the government will give you a 25% bonus.
Save faster with the market-leading Cash Lifetime ISA
Save up to £4,000 per tax year in our Cash Lifetime ISA that comes with a market-leading 4.33% AER interest rate (variable). Plus, get a 25% government bonus of up to £1,000 per tax year to boost your first home deposit or retirement pot. Download our app to get started.
You’ll need to have your Lifetime ISA open for a full year before you can use your savings towards your first home, and you can only withdraw penalty-free for an eligible first home or after the age of 60. Any ineligible withdrawals will incur a 25% penalty charge, potentially leaving you with less than you put in.
Historically, a 20% deposit was considered the safest bet. It reduced the lender’s risk and often gave borrowers access to the best mortgage rates. But as house prices have risen faster than wages, buyers have needed more flexible ways to get on the ladder. That’s why lenders, developers and brokers have introduced new products and schemes to reflect today’s reality, and to help buyers like you.
How can I buy a home with a small deposit?
There are so many ways to buy a home with a small deposit. From government-backed schemes to specialist mortgage types based on your income and job type.
We’ve listed a few key ones here. To discover which schemes you’re eligible for (including the ones you might not know of) create a free Tembo plan. It takes 10 minutes to complete, and there’s no credit check involved. Get started here.
Deposit Unlock
Offered by selected new-build developers, Deposit Unlock lets you buy a new build home with just a 5% deposit. The rest is covered by a special mortgage backed by the house builder and insurer. It’s open to both first-time buyers and home movers, and can be a good option if you want a modern home without needing a big lump sum upfront.
Professional Mortgages
Some lenders offer higher income multiples to borrowers in specific professions, including doctors, nurses, teachers, solicitors, and more. A Professional Mortgage may allow you to borrow 5.5 times your salary or even 6 times your salary, even with a 5% deposit. That means you could afford more without needing to save for years, provided your role, salary and overall finances meet the criteria.
5.5x Income Mortgage
If you have a good income and stable finances, some lenders will let you borrow up to 5.5 times your household income, regardless of your job title. This is higher than the standard 4.5x income cap and could boost your borrowing power by thousands. You’ll usually need a 5% deposit and meet certain affordability rules, but it could give you more options if you’re feeling priced out of your chosen area.
Shared Ownership
With a Shared Ownership scheme, you buy a share of a property (usually between 10% and 75%) and pay rent on the remainder. This reduces the size of the mortgage and deposit needed, making it easier to buy in expensive areas. You can increase your ownership over time through a process called staircasing. It’s available on selected properties and subject to eligibility.
Key Worker or NHS Mortgages
If you work in the NHS or other key public sector roles like education, emergency services or the armed forces, you might be eligible for a key worker mortgage. Some lenders offer higher income multiples of up to 6 or even 6.5 times your salary, plus low-deposit options and exclusive rates. It’s designed to help essential workers buy sooner and closer to where they work.
Can I buy a house with no deposit at all?
In some cases, yes. If you’ve been renting for at least 12 months and can show consistent, on-time payments, some lenders now offer deposit-free mortgages that let you borrow 100% of the property value. No deposit required!
You may also be able to boost your borrowing using a family-assisted mortgage, where a loved one adds their name to their mortgage, acts as your guarantor or puts down a small sum as security. These options aren’t widely advertised, but they can be game-changers for buyers with limited savings.
Here’s how these options work in more detail.
Skipton's Track Record mortgage
If you’ve been renting for at least 12 months and paying on time, Skipton’s Track Record Mortgage could help you buy without a deposit. It’s one of the few 100% mortgages available, using your rent history as proof that you can afford mortgage payments. You’ll still need to meet other lending criteria, but it’s a promising option for renters with good financial habits but very little saved.
Deposit Boost
If a family member or close friend owns property and wants to help you get on the ladder, they may be able to unlock money from their home to top up your deposit, or cover it entirely. This is known as a Deposit Boost and lets you increase your upfront contribution without using your own savings, or adding to your own.
Savings as Security
If someone close to you wants to help but doesn’t want to give their money away, a savings as security mortgage could be the answer. Your helper will deposit a lump sum (usually around 10% of the property price) into a special savings account with the lender and the funds will be used as a backup for your mortgage. As long as you keep up with your repayments, they’ll get their money back plus interest after a set period, usually 3–5 years. It’s a win-win for everybody.
You may have more options than you think
At Tembo, we specialise in helping buyers overcome affordability challenges and buy their first home sooner. On average, we boost buyers’ budgets by £88,000! We compare your eligibility over 100 lenders and more than 25 buying schemes to find the best fit for you.
