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06 Apr 2022

A Guide to Mortgage Deposits

Saving up for a mortgage deposit can be difficult with house prices on the rise. It can also be confusing to understand how much you need to save, how deposits work and what type you’re eligible for.

This guide will discuss everything from how mortgage deposits work, the different types available and whether you can buy a house without having a deposit.

At Mortgages Online, we offer an online mortgage advisor service to provide mortgage help and advice no matter where you are located. Get in touch with the team by calling 03300 58 60 58 or email us on

What Is a Mortgage Deposit?

A mortgage deposit is the upfront payment required to purchase a house. Usually, at least 10% of the total housing cost will be expected as the deposit, but there are different types of mortgage deposits available which this article will discuss.

The rest of the house will be paid for with a mortgage which you’ll fill out an application for. The higher your deposit, the better your mortgage application will look and the less interest you’re likely to pay.

How Do Mortgage Deposits Work?

If you are buying a £200,000 property, a 10% deposit will mean you need to put down £20,000 upfront. The loan to value (LTV) remaining will be 90% of the property which you will pay for with a mortgage.

Read on: Tips For Saving For a Mortgage Deposit

What is Loan to Value?

A loan to value ratio is used by mortgage lenders to work out the risk level of lending to a buyer. If a loan assessment has a high LTV ratio, the applicant will be considered as higher risk. The loan will therefore have a higher interest rate if accepted.

Usually, a mortgage loan with an LTV ratio lower than 60% will have the lowest possible interest rate. Whereas a ratio of 95% can still be approved, but it’s likely to have a higher interest rate.

To sum up, the lower your LTV (the larger your deposit) the more likely you’ll get offered better rates as lenders will see you as less of a risk.

Can You Get a Mortgage Without a Deposit?

It’s incredibly unlikely to be accepted for a mortgage without paying a deposit. A 10% deposit is the most common, however 5% deposits are sometimes available in certain circumstances. For example, those with the Help to Buy equity loan can be eligible for a 5% deposit.

However, some lenders might still offer you a mortgage if your relative offers another way of security. To be accepted for this, they must…

  • Use their home as security so if you fall behind on mortgage payments, lenders have the power to repossess it.
  • Springboard mortgages allow family members to put a large amount of savings with the provider. Of course, if you don’t have a relative able to do this then this won’t be an option.
  • Other types of Family mortgages may offer more choice – speak to us to find out more

Mortgage Deposits for Those With Bad Credit

A 5-15% deposit is usually expected when getting a mortgage, but if you have a history of bad credit, you will probably have to pay more. This is because you are already seen as being more of a risk, but it can depend on the severity of your bad credit history.

You will be considered as having bad credit if you have:

  • No credit history.
  • A low credit score.
  • Missed payments in the past 6 years.
  • Made late payments in the past 6 years.
  • A history of debt.
  • CCJs or IVAs.
  • A history of bankruptcy.
  • Had a property repossessed.
  • Used payday loans in the past.

You will need to speak with a specialist mortgage advisor if you are looking for a mortgage with bad credit. Online mortgage advisors, like us, also have access to a range of lenders, so we would be more than happy to help if you have bad credit and are struggling to find a mortgage suited to your circumstances.

Getting a 5% Deposit

If you are really struggling to get on the property ladder, there are options available that offer a 5% deposit. Find out if you’re eligible.

Help to Buy Equity Loan

With the Help to Buy Equity Loan, available until March 2023, you can buy a property with a 5% deposit. You’re eligible for this loan if…

  • You’re a first-time buyer.
  • The property is a new build.
  • You must have a Help to Buy account.
  • You must be 16 or above and live in the UK.
  • You must be living in the property yourself, not renting it out.

Government Mortgage Scheme

You could be eligible for a 5% deposit with the Govt mortgage scheme which runs until December 2022. To get this…

  • You must be buying a property in the UK which you will use as your main home.
  • The property can’t be worth more than £600,000.
  • The property can’t be a new build.
  • You must be applying for a repayment mortgage.
  • You have to pass the mortgage affordability criteria.

Get on the Ladder

Although saving for a deposit might seem extremely tricky, setting up the right saving accounts and getting in touch with a specialist online mortgage advisor can really help. There are options out there for everyone, including those with bad credit and people struggling to save a large deposit.

At Mortgages Online, our team of experts can help with advice, tips and specialist knowledge to help you save the ideal deposit to tip your mortgage application over the edge to acceptance.

We can also help find the best lender for your financial circumstance. Don’t hesitate to get in touch today.


Andrew Montlake

As Managing Director, Andrew looks after the strategic goals that drive the vision and culture of the company, maintaining and promoting our Brand, Marketing, PR & Communications, as well as looking after our Corporate, Introducer, and Lender relationships.

He is the author of a highly acclaimed Mortgage Blog and host of our successful Mortgage & Property Podcasts and he has also won 8 major industry awards; Best Press Spokesperson (twice), Best Marketeer (twice), Mortgage Personality of the Year (twice), Mortgage Strategist of the Year and most recently Best Business Leader Broker (11-50 brokers).

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