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Deposit is Needed for Different Mortgage Amounts

Find out how much deposit you need for a specific mortgage

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By Pete Mugleston   Mortgage Advisor

Last updated: 6th February 2019 *

Find out how much deposit you need for specific mortgage amounts

For many borrowers, looking for a mortgage with an affordable deposit requirement  can be a stressful time. We’ve helped lots of homeowners who have come to us with questions such as, “how much deposit do I need for a 300k mortgage?” and others who are confused about their deposit  requirements due to their financial history.

Because of the specialist advice they receive from  the brokers we work with, however, they leave feeling confident about the next steps they need to take.

If you’re worried about how much deposit you’ll need for a mortgage or just want some guidance before you apply – you’re in the right place. Have a read of the info below or make an enquiry here (link.)

  • What is the minimum deposit required for a mortgage in the UK?
  • Can I get a 100% mortgage?
  • What can affect how much deposit I’ll need?
  • How much deposit do I need if I have bad credit?
  • Will the property type affect how much deposit I’ll need?
  • What else affects the amount I can borrow?
  • How much deposit do I need?
  • Speak to a mortgage expert

What is the minimum deposit required for a mortgage in the UK?

The minimum deposit you’ll find most lenders will accept for a residential property is 5%. A deposit of this size would usually require you to have a very good credit history and to prove that you are able to afford your mortgage repayments as well as the maintenance of the property and any other expenses you have.

Some lenders will expect you to put down more than 5% for a residential property, especially if you have any bad credit on your file.

Meanwhile, the minimum deposit requirement for a buy to let property in the UK is 15%, although again, some lenders will ask for more if the deal is high risk.

Can I get a 100% mortgage?

In theory, it is possible to get a mortgage for 100% of the purchase price as there are specialist lenders who offer mortgages with a 0% deposit. This would only be available under exceptional circumstances, such as having a family guarantor who can use their equity or savings as security against your loan.

Borrowing the additional percentage on a personal loan is also an option however this would be subject to your affordability and credit checks.

Are there other factors that can affect how much deposit I’ll need?

Yes, these could include:

  • Credit rating
  • Property type
  • Age
  • Outgoings
  • Income
  • Income type

How much deposit do I need for a 100k mortgage if I have bad credit?

Lenders tend to view borrowers with bad credit as a higher risk and can ask for a bigger deposit or even reject an application. But don’t panic - this doesn’t mean it’s impossible to get a mortgage with a less than perfect credit file.

Depending on your circumstances, it is possible to mortgage with bad credit, which could include:

  • No credit history
  • Low credit score
  • Late payments
  • Missed mortgage payments
  • Defaults
  • CCJs
  • IVAs
  • Debt management Schemes
  • Repossessions
  • Bankruptcy
  • Multiple credit problems

Although some lenders will turn you away outright if you have any adverse against your name, a specialist provider might base their lending decision on the severity of the credit issue, how long it has been on your file, and how closely you meet their other eligibility requirements. You can read more about bad credit mortgages here.

How do I know if I have bad credit?

A lot of borrowers are unaware that they have bad credit so it can be quite a shock when they apply for a mortgage and discover that they have a bad mark on their report.

To avoid this, check your credit history before you make a mortgage application. One of the advisors we work with can offer you a free trial on either checkmyfile, credit monitor (call credit) and Experian. (LINK)

Why do lenders ask for a bigger deposit with bad credit?

If the buyer puts forward a larger deposit, it offsets the risk posed to a lender and it could show a commitment to the financial agreement. This helps the lender establish the likelihood that the borrower will make their repayments.

Putting down a larger deposit also means that the buyer would own more equity in the property, so they can apply for a smaller mortgage. This could make the monthly mortgage payments smaller and more affordable for someone who has previously had financial problems, especially as the interest rates on a bad credit mortgage can be quite high. This gives the lender more confidence that borrower can afford their mortgage.

Here’s an example:

A couple have recently sold their home to the value of £300,000. One of them has bad credit and because of this, they are finding it hard to get a mortgage for their next property.

They use the 300k for a mortgage deposit on a property worth £400,000, so they only have to apply for a smaller mortgage of £100,000 which would be spread over a term of 25 years. This would give them lower monthly repayments which are affordable. This offsets the risk to the lender and the mortgage is approved.

The good news is that ‘bad’ credit is subjective, and there are many lenders offering mortgages to people who don’t have a large deposit.

The advisers we work are experts in mortgage deposits and will find you the most affordable mortgage based on your circumstances.

Will the property type affect how much deposit I’ll need?

The majority of lenders want to know if a property is good security for the loan, so in the unfortunate event of repossession, they can resell it easily. The worry is that the more unusual the property, the more limited the market.

Therefore, exotic conversions, timber-framed properties, thatched cottages and grade 1,2, and 3 listed properties can all fall victim to the big banks' strict and increasingly automated lending criteria, meaning that to offset the risk, a larger deposit can be required - but don’t worry, that doesn’t mean it’s impossible.

Make an enquiry and we’ll refer you to one of the listed property mortgage experts to give you the right advice. You can read more about non-standard construction mortgages here.

What else affects the amount I can borrow?

The maximum mortgage size you can get comes down to your affordability and lenders calculate this in different ways. One of which may be through a mortgage calculator (link)  which uses various factors to determine whether you are able to afford your mortgage repayments. They may also consider the below factors when assessing your application.

Your income

Most lenders look at income and offset it against other significant outgoings such a household bills and debt but as a general rule, most lenders will let you borrow 4x your annual income. There are also lenders who will lend up to 5x and a minority who will consider lending 6x but this usually depends on the amount you earn a year.

If you put down a large deposit, some lenders might be more willing to offer you a higher income multiple than if you put down the minimum.

Your employment

If you are employed, lenders will want to know if your income is a set basic wage or salary or whether your income varies. They will consider these differently to determine how much mortgage you can afford to take out.

As well as how much you earn in salaries / wages, they will also look at your bonuses and how long you have had your job.

If you are self-employed, most lenders will need proof of three years trading although there are some who will ask for two, a few one, and a handful who will consider 9 months.You can read more about self-employed mortgages here.

Your age

Those borrowing in their retirement are considered higher risk by some lenders, and certain providers won’t cater for borrowers over 75, others over 85 and a minority will lend to a pensioner of any age, as long as they’re confident they can keep up with the mortgage payments.

Putting down a larger deposit means you will need to take out a smaller mortgage loan, so some retirement lenders might be more confident in your ability to meet the monthly repayments if you approach them with a significant deposit.

Your outgoings

Having other significant outgoings such as outstanding loans and dependent children can impact on the amount you’re able to borrow, but laying down a large deposit will affect the amount you need to borrow. Therefore, some lenders are more likely to be convinced that your mortgage is affordable despite your other financial commitments.

How much deposit is needed for a £200,000 mortgage?

As mentioned above, this really does depend on a multitude of factors but to give you a guide, we’ve  included some tables below revealing how much deposit is typically needed for specific mortgage sizes.

The following table is for customers with clean credit and a 5% deposit

Property Value LTV Deposit required
£70,000 deposit mortgage 95% £3,500
Deposit for £80,000 mortgage 95% £4,000
Deposit for £85,000 mortgage 95% £4,250
Deposit needed for 100k mortgage 95% £5,000
Deposit for a 150k mortgage 95% £7,500
Deposit for £200,000 mortgage 95% £10,000
Deposit for 300k mortgage 95% £15,000
Deposit for £400,000 mortgage 95% £20,000
Deposit for £500,000 mortgage 95% £25,000
Deposit for £600,000 mortgage 95% £30,000
Deposit for £700,000 mortgage 95% £35,000
Deposit for £800,000 mortgage 95% £40,000
Deposit for £900,000 mortgage 95% £45,000
Deposit for £1,000,000 mortgage 95% £50,000

The following table is for customers with clean credit and a 10% deposit

Property Value LTV Deposit required
£70,000 deposit mortgage 90% £7,000
Deposit for £80,000 mortgage 90% £8,000
Deposit for £85,000 mortgage 90% £8,500
Deposit needed for 100k mortgage 90% £10,000
Deposit for a 150k mortgage 90% £15,000
Deposit for £200,000 mortgage 90% £20,000
Deposit for 300k mortgage 90% £30,000
Deposit for £400,000 mortgage 90% £40,000
Deposit for £500,000 mortgage 90% £50,000
Deposit for £600,000 mortgage 90% £60,000
Deposit for £700,000 mortgage 90% £70,000
Deposit for £800,000 mortgage 90% £80,000
Deposit for £900,000 mortgage 90% £90,000
Deposit for £1,000,000 mortgage 90% £100,000

The following table is for customers with more recent and mild credit issues and a 15% deposit:

Property Value LTV Deposit required
£70,000 deposit mortgage 85% £10,500
Deposit for £80,000 mortgage 85% £12,000
Deposit for £85,000 mortgage 85% £12, 750
Deposit needed for 100k mortgage 85% £15,000
Deposit for a 150k mortgage 85% £22,500
Deposit for £200,000 mortgage 85% £30,000
Deposit for 300k mortgage 85% £45,000
Deposit for £400,000 mortgage 85% £60,000
Deposit for £500,000 mortgage 85% £75,000
Deposit for £600,000 mortgage 85% £90,000
Deposit for £700,000 mortgage 85% £105,000
Deposit for £800,000 mortgage 85% £120,000
Deposit for £900,000 mortgage 85% £135,000
Deposit for £1,000,000 mortgage 85% £150,000

The following table is for customers with severe credit issues and a 25% deposit:

Property Value LTV Deposit required
£70,000 deposit mortgage 75% £17,500
Deposit on £80,000 mortgage 75% £20,000
Deposit for £85,000 mortgage 75% £21,250
Deposit needed for 100k mortgage 75% £25,000
Deposit for a 150k mortgage 75% £37,500
Deposit for £200,000 mortgage 75% £50,000
Deposit for 300k mortgage 75% £75,000
Deposit for £400,000 mortgage 75% £100,000
Deposit for £500,000 mortgage 75% £125,000
Deposit for £600,000 mortgage 75% £150,000
Deposit for £700,000 mortgage 75% £175,000
Deposit for £800,000 mortgage 75% £200,000
Deposit for £900,000 mortgage 75% £225,000
Deposit for £1,000,000 mortgage 75% £250,000

The above tables are for example purposes only. For the latest rates and criteria, make an enquiry and a broker will go over it with you on the phone.

The key to truly understanding how much deposit is needed for a mortgage is to get the right advice for your situation. The advisors we work with can take you through the various mortgage calculators(link)  to give you a guide on how much you could borrow with each different lender.

We can find the right advice for you

Whether you’ve been let down by a lender or just feel unsure about what to do next, we’re here to help.

We work with whole-of-market brokers who are experts and can find out how much deposit you’ll need with each of the mortgage providers, and connect you with the lender offering the best deals, should you decide to proceed.

To get a quote from one of the specialists we work with get in touch.

Speak to a mortgage expert

If you like anything in this article or you’d like to know more, call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry here.

Then sit back and let us do all the hard work in finding the mortgage broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 6th February 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information.

The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA.

Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.