How to save for a mortgage deposit: Smart steps before you apply

For a first time buyer, mortgage deposit saving can feel like a big task. But it’s completely achievable with a clear plan. Understanding how much you need and how to build it up steadily is the first step towards owning your home.

Why your deposit matters for a mortgage

Your mortgage deposit is what shapes how much money you can borrow and the kind of deal you could be offered.

When you apply for a mortgage, lenders look at something called the LTV, or loan-to-value ratio. This is the percentage of the property’s price that you’ll need to borrow after paying your deposit. For example, if you put down a £25,000 deposit on a £250,000 home, you’d be borrowing £225,000, which is an LTV of 90%, exclusive of any product fees lenders may charge.

Bigger deposits equal lower LTVs, which usually mean less risk for the lender. As a result, you might be offered more favourable terms, like a wider choice of mortgage products or potentially lower interest rates. On the other hand, a smaller deposit means you’ll be borrowing a higher proportion of the property’s value, which can limit your options.It’s important to remember there’s no single best deposit size for first-time buyers. It’s about finding the balance between what’s affordable for you and what helps you reach your goal.

Realistic deposit targets and how lenders view them

As a first-time buyer, understanding what counts as a reasonable deposit can help you plan with confidence. Some lenders set their minimum deposit at around 5% of the property price, but having more can make a noticeable difference to your mortgage options.

Below, you’ll find a simple guide to how different deposit sizes might be viewed by lenders:

Deposit size	Loan-to-value (LTV)	How lenders may view it
5%	95%	This is the minimum some lenders will accept. You’ll have access to fewer mortgage deals and may face higher rates.
10%	90%	This opens up more options than 5%.
15-20%	85-80%	This is often seen as a strong position, giving you access to a wider range of mortgage products.
25%+	75% or less	This is seen as most favourable by most lenders, which can mean more competitive rates and flexibility.

These figures are only a general guide. Each lender has its own criteria and affordability checks always play a major role. What matters most is saving at a pace that fits your budget and being realistic about how much you can comfortably put aside each month.

How to build a deposit for a mortgage

Building a mortgage deposit takes time, patience and a clear plan. The good news is, there are many simple ways to make steady progress.

1. Choose the right savings account

The account you save into can make a real difference. At Afin Bank, we offer savings accounts to help you reach your goal. Look to compare:

• Access — How easily can you withdraw funds?
• Interest — Are rates fixed or variable?
• Commitment — Do you need to give notice before withdrawing?

2. Make budgeting part of your routine

Small, consistent changes can have a big impact. Try these mortgage deposit saving tips.

• Track your income and expenses
• Automate monthly savings
• Cut back on non-essentials like unused subscriptions
• Use cashback or loyalty schemes to stretch your budget

3. Plan around your situation

Everyone’s financial journey is different. If you’re self-employed with variable income, we understand the unique challenges you face.

We support our clients with flexible solutions designed to help you build your deposit your way.

What to watch out for when saving for your mortgage deposit

A few external factors can affect how your savings grow. Being aware of them helps you stay prepared.

• Inflation and interest rates — These change over time and can influence the real value of your savings. Review your account regularly to ensure it’s still competitive.
• Access restrictions — Some accounts, like notice or fixed-term options, limit when you can withdraw funds. Check the terms before you commit.
• Market changes — Property prices can rise or fall, so keep your deposit target flexible.

Regularly reviewing your progress and adapting when needed will help you stay on track.

Next steps once your deposit is ready

Once you’ve built your deposit, you’re ready to take the next step towards your first home.

• Check your eligibility — Review your credit score and finances to see how lenders might assess you.
• Use our mortgage calculator — We’ve got an easy tool to help calculate how much you could borrow and what your repayments could look like.
• Speak to an expert — Our team can guide you through your options and help you prepare to apply.

Explore our first-time buyer mortgages or visit our mortgage FAQs to learn more.