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Mortgage deposit required for home-buying FAQs

What is a mortgage deposit?

A mortgage deposit is a lump sum of money you need to pay to secure the property that you are buying. This will be a percentage of what the house is worth and the lender will loan you the rest to purchase the property. For example, a 10% mortgage deposit on a house worth £200,000 is £20,000. Your mortgage will then be £180,000 as a loan. 

How much deposit do you need for a mortgage?

How much deposit you need for a mortgage varies depending on a number of factors, such as the amount you want to borrow , your income, the price of the property you wish to purchase and your overall credit score. Typically, first-time buyer mortgages are available with a 10% deposit. Until recently, some lenders were offering mortgages with only a 5% deposit. However, since the 2020 pandemic, it is increasingly hard to find lenders who will accept just a 5% and sometimes even a 10% deposit.

Generally, the bigger the mortgage deposit the greater the variety of mortgage rates and deals available to you, the better the rate and the lower your monthly repayments. Our mortgage advisers can recommend the best option for you. They'll take away the stress of picking the right mortgage as they search over 60 lenders before recommending the best mortgage for your individual needs. To help you further they'll also do the legwork of filling in your application, arranging valuations, checking offers and assisting you all the way until your mortgage has been completed.

When do you pay your mortgage deposit?

You pay your mortgage deposit as part of the home buying process to your solicitor or conveyancer. They will issue you a document called a completion statement which will include all of the fees for their work, any searches and surveys you need to pay for and it will include the fees for your mortgage product if there are any as well as your mortgage deposit. This is usually the step before exchanging contracts and happens between two to four weeks before exchange of contracts. It can be more or less time.

Although you do not pay your mortgage deposit until quite far down the home buying process you will have to prove that you have the money for the deposit at the beginning of the process. This is called providing proof of funds. 

Do you get a deposit back on a mortgage?

You do not get your deposit back on a mortgage. Your deposit goes towards the portion of the property that you own, as well as the mortgage payments, minus the interest, that you pay monthly. Down the line you may be able to remortgage your house and withdraw some of the equity that you have built up in the house which can include your original deposit but this will depend on many things, one being the cost of houses at the time. 

How does your deposit affect your mortgage?

Your deposit affects how much you will be borrowing on your mortgage from the lender. The more deposit you have, the less you will have to borrow and therefore your monthly repayments will be less. If you do have a larger deposit you will have access to more mortgage deals and more lenders will be willing to lend to you as you are seen as a ‘safer’ investment. 

Do you need a full deposit before applying for a mortgage?

It is advisable to have the full deposit that you are hoping to put down on a property before you apply for a mortgage as your mortgage broker or adviser can clearly see what deals you may be able to get. 

Can you get a mortgage without a deposit?

Generally you will need a deposit and the best mortgage deals require more than 10%. If you can’t afford to put the full deposit down there are other options to house ownership.

Can you use the equity in your house as a deposit?

Yes, you can use the equity in your house as a deposit for your next property. The difference between what you bought your house for and what you sold it for is known as equity. If you sell your house for more than you bought it for then this equity can be used as a deposit for your next home.

Read the following example to see it in action. 

Robin buys Property 1 for £105,000 with a 10% deposit of £10,500. Some years later he comes to sell the house for £125,000 and has £90,000 left on his mortgage to pay back to his lender. 

Therefore he has £35,000 equity which is technically ‘his’. He wants to buy Property 2 which is worth £200,000 at the same time as selling Property 1. He decides to put down a 20% deposit on Property 2 which is £40,000 and adds in £5,000 of his own savings to make up his full deposit with his £35,000 equity. 

How do you know what mortgages are available?

Mortgage advisers or brokers have access to a wide range of mortgages from different lenders. They can look at your personal circumstances and give you recommendations on how much you can borrow based on your deposit and what your monthly repayments may be. Nottingham Mortgage Services can search over 60 lenders to find the right deal for you. 


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Mortgage advisers at Nottingham Mortgage Services will search thousands of mortgages from over 60 lenders for you. Send us an enquiry or if you’ve already spoken to an adviser, you can find their contact details here.

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£250,000 Mortgage Repayments

Your monthly repayments will vary depending on your mortgage term, interest rates and the size of deposit that you have to put down. 

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