Cashback Remortgages · Planning a deposit
Planning the Deposit for Your First Mortgage
Your deposit is the contribution you make to the property price from your own funds. The lender finances the rest if it approves the mortgage. A deposit percentage is only one part of eligibility and is not a promise that you can borrow the remaining amount.
How the deposit relates to loan-to-value
For an illustrative £250,000 purchase with a £25,000 deposit, the required loan is £225,000: 90% of the price. This arithmetic is not a current product offer or an affordability assessment.
A lender's valuation can be lower than the agreed price. If its lending limit is based on a lower valuation, you may need a larger cash contribution, a renegotiated price or another appropriate option. Do not assume the advertised price is the value used for lending.
Keep money aside for costs
Do not use the entire savings balance as the deposit without allowing for legal fees, a survey, moving costs, applicable property tax and an emergency buffer. New-build or leasehold purchases can add particular charges to check.
First-time buyer tax relief is not identical across the UK and is conditional. Confirm the rules for the property location and all buyers with your conveyancer rather than applying a generic UK stamp-duty threshold.
Savings, gifts and borrowed money
Lenders and conveyancers may request evidence showing where the money came from and how it moved. Keep a clear trail for savings and significant transfers. A family gift may require a declaration and donor checks.
A loan from a relative is different from a non-repayable gift. It can affect commitments and the lender's assessment and must be disclosed. Do not describe borrowed funds as a gift to fit a product's rules.
Check savings and ownership schemes carefully
If using a savings scheme such as a Lifetime ISA, check current withdrawal conditions and timing with the provider and official guidance before agreeing a purchase. If considering shared ownership, your contribution relates to the purchased share, but rent and service charges still affect affordability.
Minimum deposits, eligible properties and acceptable funding sources depend on the lender and scheme. A council information page is a useful starting point, not confirmation that you qualify or that a particular home is available.
Your questions, answered
Does a larger deposit always secure approval?
No. It changes the borrowing required and may affect available products, but affordability, credit and property checks still apply.
Can I use a gift from overseas?
Rules vary and additional evidence may be needed. Disclose the donor, origin and transfer route, and ask the lender and conveyancer what checks apply before relying on the funds.
Sources and further reading
General mortgage information, not a personal recommendation. Lender criteria and scheme rules can change. Ask an adviser about your circumstances and a solicitor or tax adviser about legal or tax questions. Your home may be repossessed if you do not keep up repayments on your mortgage. Most buy-to-let mortgages are not regulated by the FCA.
Discuss the next step for your mortgage
Understand your options before you make a decision.