10 Ways to Buy Your First Home in the UK With a Small Deposit
Think you need a huge deposit to buy your first home? You may have more options than you realise.
Buying your first home is an exciting milestone, but saving for a deposit can feel like one of the biggest challenges. With rising living costs, monthly rent and everyday expenses, putting aside thousands of pounds isn’t always easy.
The good news is that first-time buyers in the UK have several mortgage options and homeownership schemes to explore, including specialist no-deposit mortgages, low-deposit products and family-assisted mortgages.
Whether you’re renting, have limited savings or have family members willing to help, understanding the available options could bring you closer to owning your first home.
In this guide, we’ll explore 10 potential routes onto the UK property ladder.
1. No Deposit Mortgages – Could You Buy With £0 Saved?
Traditionally, mortgage lenders require buyers to provide a deposit. However, some specialist mortgage providers offer products that allow eligible applicants to borrow up to 100% of a property’s value.
These mortgages may be particularly useful for first-time buyers who have a stable income and can comfortably afford mortgage repayments but have struggled to build up savings.
Things to consider:
- Eligibility requirements can be stricter than for standard mortgages.
- Some lenders may consider your rental payment history.
- Borrowing the full property value increases the risk of negative equity.
- You may still need money for legal fees, surveys and moving costs.
A no-deposit mortgage isn’t suitable for everyone, but it could be worth discussing with a qualified mortgage adviser.
2. Low-Deposit Mortgages – Buying With Less Than 5%
Many first-time buyers assume they need at least a 5% or 10% deposit to purchase a property.
Although 5% deposits are common among high loan-to-value mortgages, certain specialist products may allow eligible applicants to buy with less.
For example, a 2% deposit on a £250,000 property would be £5,000.
Availability depends on the lender, mortgage product, property type, income and affordability assessment.
3. Mortgages for Renters – Could Your Rental History Help?
If you’ve been paying rent consistently for several years, you may wonder why getting a mortgage can still feel difficult.
Some specialist lenders recognise regular rental payments when assessing mortgage applications.
This could be particularly relevant if you’re paying a substantial amount in rent every month but finding it difficult to save a large deposit.
However, rental history alone does not guarantee approval. Lenders will also assess income, existing financial commitments, credit history and overall affordability.
4. Family-Assisted Mortgages – Getting Support Without a Cash Gift
Family support doesn’t always mean receiving money directly towards your deposit.
Some mortgage products allow parents or other eligible family members to place savings into a linked account as additional security for your mortgage.
This arrangement may help reduce the deposit you need to contribute yourself.
The family member’s savings are usually held for an agreed period and may be at risk if the mortgage terms are not met.
Independent legal and financial advice may be appropriate before entering this type of arrangement.
5. Shared Ownership – Buy a Share of Your First Home
Shared Ownership offers eligible buyers an opportunity to purchase a percentage of a property rather than buying it outright.
You typically take out a mortgage on the share you purchase and pay rent on the remaining share.
Example: Buying a £300,000 Property
If you purchase a 25% share:
- Full property value: £300,000
- Share purchased: £75,000
- 5% deposit on your share: £3,750
- Mortgage required on your share: £71,250
You would also pay rent on the remaining share, together with any applicable service charges and other property costs.
Shared Ownership rules and availability differ across the UK, so it’s important to understand the terms of the relevant scheme.
6. Lifetime ISA – Boost Your Deposit Savings
A Lifetime ISA (LISA) can help eligible first-time buyers save towards their first property.
You can contribute up to £4,000 each tax year and receive a 25% government bonus.
For example:
- Save £2,000 and receive a £500 bonus.
- Save £3,000 and receive a £750 bonus.
- Save £4,000 and receive a £1,000 bonus.
To open a Lifetime ISA, you generally need to be aged 18–39. Contributions can continue until age 50.
For a qualifying first-home purchase, the property must cost no more than £450,000, and the account must have been open for at least 12 months.
Withdrawals outside the qualifying rules normally incur a 25% withdrawal charge.
7. Traditional 5% Deposit Mortgages
A 95% loan-to-value mortgage is another popular option for first-time buyers.
With this type of mortgage, you provide a 5% deposit and borrow the remaining 95%, subject to the lender’s criteria.
Example: £250,000 Property
- Property price: £250,000
- Your 5% deposit: £12,500
- Mortgage amount: £237,500
Although a 5% deposit can make homeownership more accessible, interest rates and monthly repayments may be higher than on mortgages with larger deposits.
A mortgage adviser can help you compare suitable products and understand the potential costs.
8. Gifted Deposits – Help From Family
If a parent, grandparent or another eligible family member wants to help you buy your first home, a gifted deposit could be an option.
Many UK mortgage lenders accept gifted deposits, provided the gift meets their requirements.
The lender may request:
- A signed gifted deposit declaration.
- Confirmation that the money does not need to be repaid.
- Evidence of where the funds came from.
- Identification documents from the person providing the gift.
A gifted deposit could help you reach the required deposit amount sooner or potentially access a different range of mortgage products.
9. Joint Borrower Sole Proprietor Mortgages
A Joint Borrower Sole Proprietor (JBSP) mortgage allows another person, commonly a parent or family member, to support your application using their income without necessarily becoming a legal owner of the property.
This arrangement may help first-time buyers whose income alone is insufficient for the mortgage amount they need.
However, all named borrowers are legally responsible for the mortgage repayments.
Lenders will assess the financial circumstances of everyone involved, and legal and tax implications should be considered carefully.
10. First Homes Scheme – Discounted Homes in England
The First Homes Scheme is designed to help eligible first-time buyers in England purchase qualifying properties at a discount to their market value.
Eligible properties may be offered with a discount of at least 30%, subject to scheme requirements and local restrictions.
Example
A qualifying property with a market value of £300,000 and a 30% discount would have a discounted purchase price of £210,000.
A 5% deposit on the discounted price would be £10,500.
The scheme is subject to eligibility requirements, property availability and restrictions when selling the home.
It is available in England rather than throughout the whole UK.
How Much Deposit Do You Need to Buy a House in the UK?
The amount you need depends on the property price, mortgage product and your financial circumstances.
Here’s an illustration based on purchasing a £250,000 property.
| Deposit percentageDeposit requiredMortgage needed | ||
| 0% | £0 | £250,000 |
| 2% | £5,000 | £245,000 |
| 5% | £12,500 | £237,500 |
| 10% | £25,000 | £225,000 |
These figures illustrate the deposit calculations only. Zero-deposit and 2% deposit mortgages are specialist options and may not be available to every buyer.
Remember that you may also need to budget for solicitor fees, surveys, moving expenses and any applicable property taxes.
Can You Get a Mortgage While Renting?
Yes. Renting does not prevent you from applying for a mortgage.
Mortgage lenders generally assess factors such as:
- Your income and employment circumstances.
- Existing loans, credit cards and financial commitments.
- Your credit history.
- Your available deposit.
- The property you want to purchase.
- Whether the proposed monthly repayments are affordable.
Certain specialist lenders may also take your rental payment history into account.
Even if you’ve struggled to save while renting, it may be worth exploring which mortgage products could be suitable for you.
Is It Better to Save a Larger Deposit?
Generally, a larger deposit can give buyers access to a wider range of mortgage products and potentially more competitive interest rates.
However, waiting to save a larger deposit isn’t necessarily the right decision for everyone.
Your income, monthly budget, property goals and personal circumstances all play an important role.
Speaking with a mortgage adviser can help you understand the advantages and disadvantages of different deposit options.
Ready to Buy Your First Home?
Your first home could be closer than you think.
Whether you have no deposit, a small amount saved, a strong rental history or family members willing to help, there may be mortgage options worth considering.
Every first-time buyer’s situation is different, which is why getting professional mortgage advice can be valuable.
A mortgage adviser can help you understand your borrowing potential, compare available mortgage products and explore the most suitable route towards homeownership.
Take the First Step Towards Your First Home
Thinking about buying your first home in the UK?
Contact our mortgage team today to discuss your circumstances and explore your options.
You don’t necessarily need a huge deposit to start planning your journey onto the property ladder.
Important information: Mortgage products and government schemes are subject to eligibility, affordability assessments, lender criteria and availability. Rules may differ across England, Scotland, Wales and Northern Ireland. The examples provided are illustrative and do not constitute a mortgage offer or guarantee of approval.
Your home may be repossessed if you do not keep up repayments on your mortgage.