How much deposit do I need to buy a house?

The minimum deposit is typically 5-10% of the property price. A 10% deposit on a £250,000 house is £25,000. Larger deposits (15-20%) secure better interest rates and lower monthly payments. First-time buyers can use a Lifetime ISA for a 25% government bonus on savings up to £4,000/year.

What costs do first-time buyers need to budget for?

Beyond the deposit, budget for solicitor fees (£1,000-2,500), survey (£300-1,500), mortgage arrangement fee (£0-2,000), moving costs (£500-2,000), and stamp duty (0% up to £425,000 for first-time buyers). Total additional costs are typically £3,000-8,000.

Does my credit score affect how much I can borrow?

Yes. A higher credit score gives access to better rates and higher borrowing multiples. Lenders check your credit history for the past 6 years. Late payments, defaults, or CCJs can reduce your borrowing power or increase your rate by 1-3%.

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🏡

Home Affordability Calculator

Estimate how much home you can afford based on your income, deposit, debts, and monthly expenses. See your maximum property price and mortgage amount.

Last updated: March 2026

Annual Income (£)

Monthly Debts (£)

Deposit Saved (£)

Interest Rate (%)

Max Affordable Price

£$232,500

Max Mortgage

£$202,500

Monthly Payment

£$1,125.56

Debt-to-Income

38.0%

📊

How You Compare

Your debt-to-income ratio is in the bottom 53% of UK homebuyers.

Industry typical: 25-45%

Source: ONS Housing Data 2025

💡 What This Means

📊 Your maximum affordable price is £232500. Consider if shared ownership or Help to Buy could stretch your budget further.
⚠️ A 38.0% debt-to-income ratio is approaching the limit. Keep this below 40% for comfortable living.
💡 Monthly mortgage payment of £1126. Budget an extra £200-£400/month for council tax, insurance, and maintenance.

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What is Home Affordability?

Home affordability determines the maximum property price you can purchase based on your income, deposit savings, and existing debts. UK lenders typically offer 4-4.5x your annual income as a mortgage, though this varies with credit score, debts, and dependants. Check your monthly costs with the Mortgage Calculator and upfront tax with the Stamp Duty Calculator.

The Formula

Max Mortgage = Annual Income × Income Multiplier (typically 4-4.5x)
Max Property Price = Max Mortgage + Deposit Saved

Lenders stress-test at current rate + 3%. Your actual borrowing may be less than the multiplier suggests if you have large debts or dependants.

Worked Example

A buyer earns £45,000/year and has saved a £25,000 deposit. The lender offers a 4.5x income multiplier.

Max mortgage = £45,000 × 4.5 = £202,500
Max property price = £202,500 + £25,000 = £227,500
Deposit percentage = £25,000 ÷ £227,500 = 11%
Stamp duty (first-time buyer) = £0 (below £425,000 threshold)

📌 Maximum affordable property: £227,500 with an 11% deposit — qualifying for first-time buyer stamp duty relief.

Why This Matters

Realistic expectations

Knowing your maximum budget before house-hunting saves weeks of viewing properties you can't afford. It also strengthens your negotiating position — sellers take serious buyers with mortgage agreements in principle more seriously.

Joint income advantage

Joint applicants can combine incomes, dramatically increasing borrowing power. A couple earning £35,000 + £30,000 could borrow up to £292,500 (4.5x £65,000) vs £157,500 alone. Factor this into your home search strategy.

Common Mistakes

❌ Borrowing the maximum available

Just because a lender offers 4.5x income doesn't mean you should take it. Maximum borrowing leaves zero buffer for rate rises, job changes, or unexpected costs. Aim for 3.5-4x for comfortable living.

❌ Forgetting purchase costs

Beyond the deposit, you need £3,000-5,000 for solicitor fees, surveys, mortgage arrangement fees, and moving costs. These aren't included in the mortgage — you need cash in addition to your deposit.

Industry Benchmarks

Category	Good	Average	Poor
Deposit as % of property	20%+	10-20%	Below 10%
Debt-to-income ratio	Below 30%	30-40%	Above 40%

Related Tools

Real Estate

Frequently Asked Questions

🏡First-time buyer? Read our mortgage guide →

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