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Deposit Calulator

How big a deposit do I need? 

Having a strong deposit is a good way to increase your chances of being accepted for a mortgage. Unless you are using Help to Buy, you will usually need to have saved up at least 10% of your home’s value before you can make an application. The amount you need to save will depend on a number of factors, with the main one being the price of the home you want to buy. Take a look at our mortgage calculator to see for yourself how the size of your deposit can affect how much you’re paying for your mortgage each month.


How to save more towards your deposit

There are several steps you can take to increase the size of your deposit before approaching a mortgage lender. Here are some you might want to think about.

Set yourself a budget

Having a monthly budget is a good place to start. Knowing you have a restricted amount of money to spend each month will increase your ability to save, so you can start to watch your deposit build.

Calculate how much you need to spend on essentials, such as rent and bills, before giving yourself a set leisure spend. This should give you a better idea of how much you can realistically afford to save each month.

Although your personal financial situation is likely to change over the years, you should still do what you can to keep to your savings goals. Regularly review how much you are spending and saving to see whether there’s any potential to increase your deposit further.

Use the Help to Buy scheme

With the Help to Buy scheme, you will only need a 5% deposit to secure your new home. 

The government will lend you up to 20% of the value of your new home, meaning you will only need a 75% mortgage. You won’t be charged any fees over the first five years of your loan, so you can use this time to save more for the future. 

Open a Help to Buy ISA

The Help to Buy ISA can be a big help when you’re saving for a deposit. This product is available to anyone over the age 16, providing you are planning on buying a new home sometime in the future valued at less than £250,000.

For every £200 you put into your Help to Buy ISA, you will receive an extra £50 from the government. The maximum government contribution is £3,000, meaning the most you can save using your Help to Buy ISA is £12,000.

One of the main advantages is that if you’re buying with someone else, you can each open your own account. You can both save up to £12,000 tax-free, which adds up to £30,000 once the government has added its 25% bonus.
When you need to withdraw the money from your Help to Buy ISA, all you need to do is give a letter to your solicitor confirming you are closing the account. They will apply for the bonus on your behalf and deduct it from your final bill.

Get into the habit of saving

Whether you’re using a Help to Buy ISA or another type of savings account, you need to make sure you are regularly putting money aside. 

Setting up a direct debit between your current account and savings account will mean your deposit soon starts to grow. The money will come straight out of your account, so you won’t be tempted to spend it.

If you want to buy a £120,000 home in 10 years’ time, you need to set aside £100 per month to raise the 10% deposit. To buy the home in half the time, you would have to save £200 per month.

Knowing exactly how much you need to save – and over what period – will help make sure you follow good savings habits from the start.

Move somewhere more affordable

Many people rent a home before buying, which might mean they are unable to save as much as they would like. 

Moving somewhere more affordable, or taking on a lodger if your tenancy agreement lets you, can mean you’re paying out less each month, therefore helping you build your deposit. 


What is a deposit calculator?

Whether you’re just starting to build your deposit, or you’ve already got money set aside, using a deposit calculator can help you see how much further you’ve got to go. It can be useful to see all the figures relating to your mortgage in one place – which is what a deposit calculator enables you to do. The calculator can give you an idea of what your mortgage repayments will be, based on various factors such as the term of your loan and its interest rate.

How do I use it?

The size of your deposit will have an impact on how much you’re paying for your mortgage each month. A large deposit - and low interest rate product - can both help bring your repayments down.

Here is a guide to how you can use our deposit calculator to find out more about what your mortgage repayments could be.

1. Move the deposit slider until it shows the size of your deposit. This will need to be at least 10% of the home’s total value, or 5% if you’re using Help to Buy. As the calculations are made automatically, you can see how the size of your deposit will affect how much you’re repaying each month.

2. Drag the ‘cost of property’ slider up and down until it shows the price of the home you want to buy.

3. Check the ‘yes’ box if you are using the Help to Buy scheme so the calculator will take into account your reduced deposit and five-year interest-free loan.

4. Add how many years you are planning on taking out your mortgage for. The greater the term, the smaller your repayments will be - but your financial commitment will last longer.

5. Put in the interest rate of the mortgage that your lender has offered.

6. Then it’s time to see your results – the calculator will show what your approximate repayments would be on a capital and interest mortgage. If you are looking to take out an interest-only product, these results will be different, so it’s worth having a meeting with a mortgage expert to discuss this further.

Top tips for buying a new home

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Your Guide to Buying a House: All You Need to Know
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