Buying your first home can feel exciting and completely overwhelming at the same time.
The deposit is usually the biggest hurdle as it’s the number that makes everything feel real.
If you’re wondering how to save for a deposit on your first home, this guide will walk you through:
• How much you’re likely to need
• How long saving might realistically take
• Where to keep your deposit money
• Practical ways to build it faster without burning out
Let’s make this feel doable.
How much deposit you actually need
The amount you need depends on the price of the home and the type of mortgage you’re aiming for.
In the UK, deposits usually start at:
- 5% of the property price at the absolute minimum
- 10% to 15% for more choice and better rates
- 20% or more if you want lower monthly payments
For example, on a £250,000 home:
- 5% is £12,500
- 10% is £25,000
- 15% is £37,500
Those numbers can feel intimidating. Before you panic, remember two things.
First, your target depends on where you live. Property prices vary massively across the UK.
For example:
| Region | Average property price (2025 est.) | 10% deposit | 20% deposit |
|---|---|---|---|
| London | £525,000 | £52,500 | £105,000 |
| South East | £390,000 | £39,000 | £78,000 |
| North West | £215,000 | £21,500 | £43,000 |
| Scotland | £190,000 | £19,000 | £38,000 |
| UK average | £285,000 | £28,500 | £57,000 |
Source: Land Registry & ONS, early 2025
Second, you don’t need the perfect deposit. You need a realistic starting point.
If you haven’t already, check average prices in your area and calculate what 5, 10 and 15% look like.
How long does it take to save a deposit?
There isn’t a standard timeline. Some people save in two years. Others take five or more.
Your income, rent, childcare costs and location all matter.
Instead of asking, “How long should it take?” ask, “How much can I save each month without hating my life?”
For example:
- Saving £300 per month builds £3,600 in a year
- Saving £500 per month builds £6,000 in a year
- Saving £800 per month builds £9,600 in a year
Now reverse engineer it. If your target deposit is £20,000 and you can save £500 per month, that’s just over three years.
That’s a plan you can stick to.
How to work out what you can realistically save
Start with your current income and essential expenses. Strip out everything that keeps you housed, fed and functioning.
Then look at what’s left.
If you’ve read my guide on how to create a household budget that works for you, this is where that framework becomes powerful.
Be honest. If saving £700 per month would mean living on toast and resentment, lower the number. Consistency beats intensity every time.
Automate the amount you choose. You can always increase it later when things feel easier.
Where to keep your deposit savings
This isn’t money for investing in high-risk assets. You need stability. A house purchase has a deadline.
Here are your main options.
- Lifetime ISA: If you’re under 40 and a first-time buyer, a Lifetime ISA can be incredibly helpful. You can save up to £4,000 per year and the government adds a 25 percent bonus. Save £4,000 and you receive £1,000 extra. That’s a strong return with zero stress.
- High-interest savings accounts: Look for competitive easy-access or fixed-term savings accounts. The rate won’t make you rich, but it will protect your money from inflation more than leaving it in a current account.
- Regular saver accounts: Some banks offer higher rates if you commit to saving a fixed amount monthly.
Keep it simple. Your deposit money should be safe, accessible and separate from daily spending.
Simple ways to grow your deposit faster
You don’t need extreme tactics. Small structural changes work better.
- Automate everything: Set up a standing order the day after payday. If you don’t see the money, you won’t miss it.
- Use windfalls strategically: Bonuses, tax refunds, gifts, overtime or side income can go straight to your deposit fund. Avoid letting “extra” money disappear into lifestyle creep.
- Review big expenses: Switching energy suppliers, renegotiating broadband or cancelling unused subscriptions won’t magically create £10,000. But over two or three years, those small wins stack up.
- Consider increasing income: A pay rise, side hustle, or career move can shorten your saving timeline more than extreme budgeting. Sometimes the biggest shift comes from earning more, not cutting more.
If you’re trying to free up cash, my post on how to reduce your energy bills without sacrificing comfort might help.
Government schemes that can help first-time buyers
Beyond the Lifetime ISA, there may be schemes available depending on your situation.
- Shared ownership: You buy a share of a property and pay rent on the rest. The deposit required is often smaller because it’s based on your share, not the full value.
- Mortgage guarantee schemes: At times, the government supports lenders offering 95% mortgages, which means a 5% deposit.
Always read the detail carefully. A smaller deposit often means higher monthly repayments. Make sure affordability works long term.
Should you invest your deposit instead?
This question comes up a lot.
If your house purchase is more than five years away, investing could make sense. Over shorter periods, markets can fall sharply.
You don’t want your deposit to shrink right before you apply for a mortgage.
For most first-time buyers with a three to five year timeline, cash savings are safer. Boring, yes. Sensible, also yes.
If saving feels impossible right now
Be honest about your starting point.
If you’re dealing with high rent, debt or unstable income, pushing yourself to save aggressively can backfire. Stability comes first.
If debt is weighing you down, you might want to read my guide on how to pay off credit card debt faster.
Clearing high interest debt often gives you more breathing space than chasing a deposit too early.
How to tell you’re making real progress
Progress isn’t just about the balance in your savings account.
Other signs matter too:
- You’re saving consistently, even if the amount is small
- You understand your numbers better
- You feel more confident talking about money and housing
These changes make the next steps easier when the time is right.
A deposit is a marathon, not a deadline
Saving for a deposit on your first home isn’t about extreme sacrifice. It’s about clarity, structure and time.
Work out your target. Choose a realistic monthly saving amount. Put the money somewhere safe. Repeat.
You don’t need to save perfectly. You need to save consistently.
Start this week. Even £100 moved into a separate account is proof that you’re building something.
FAQs
How much deposit do first-time buyers usually need in the UK?
Typically 10–20% of the purchase price. Some lenders accept 5%, but those mortgages carry stricter criteria and higher rates.
Can I use a Lifetime ISA for my deposit?
Yes. You can save up to £4,000 a year into a Lifetime ISA and receive a 25% government bonus. For a couple, this could mean £2,000 of free money annually.
Should I invest in stocks to grow my deposit faster?
If your timeline is short (1–4 years), stick to cash accounts. If you have 5+ years, a Stocks & Shares ISA could potentially outpace inflation, but remember your savings could fall as well as rise.
What happens if house prices rise while I’m saving?
You may need to adjust your target, expand your search area, or save more aggressively. In some cases, buying sooner with a smaller deposit may be more cost-effective than waiting.
Do I need to clear all debts before saving a deposit?
Clear high-interest debts (credit cards, payday loans) first. Lower-interest debt (like student loans) doesn’t usually stop you from saving at the same time. Lenders will look at your overall affordability.
