Mortgage Guides

How much deposit do I need for a mortgage?

What is a mortgage deposit?

When you take out a mortgage to purchase a property, your deposit is the amount of money you provide up front towards the total purchase price of the property.

  • Deposit amounts are usually a percentage of the value of a property. So, if you are buying a property for £300,000, with a 10% mortgage deposit, you would need to pay a £30,000 deposit.
Joint picture frame and a piggybank

How much deposit do you need for a mortgage?

If you are looking for a mortgage and have a small deposit, the minimum deposit required for a Royal Bank mortgage is 5% of the purchase price of the property (these are sometimes referred to as 95% mortgages). Exclusions and eligibility criteria apply. 

This means, if you were buying a property for £300,000, you would need a mortgage deposit of £15,000.

Depending on your circumstances and the property you are buying, you may need a higher deposit (e.g. 10% mortgage deposit, or 90% mortgage).

You could get an Agreement in Principle for a mortgage in under 10 minutes without any obligation or impact to your credit score.

Information Message

We're offering 91-95% LTV mortgages

How much deposit should I save?

It may be tempting to opt for a low deposit mortgage, to get on the property ladder as soon as possible, or to provide you with money to spend elsewhere. However, you should take into consideration the advantages of saving a larger deposit.

A larger deposit can result in various advantages...

  1. 01

    The larger your deposit as a percentage of the property's value, the lower your mortgage LTV (loan-to-value).

    A lower LTV could increase the number of mortgage products available to you and may result in you being offered a lower interest rate on your mortgage.

  2. 02

    As you would be borrowing less with a bigger deposit, you may be able to reduce the length of your mortgage term and pay off your mortgage sooner (depending on your ability to cover the monthly payments).

  3. 03

    With a larger deposit, you could save on the total cost of your mortgage if a more favourable interest rate or shorter mortgage term is available.

    You can use our mortgage calculator to get a quick indication of how much a mortgage could cost with different deposit amounts.

Set yourself a savings goal 

Setting yourself a goal is a great strategy that can make saving feel a little easier. Royal Bank instant access savings account holders can set themselves a savings goal using our mobile app. Savings account eligibility criteria apply.

App available to customers aged 11+ with compatible iOS and Android devices and a UK or international mobile number in specific countries.

More tips on saving for your deposit

Saving for a deposit can be difficult. There's no silver-bullet, but there are things you can do to make the process easier.

Can I get a mortgage with a 0% deposit?

  • We don't currently offer any new mortgages without a deposit.
  • It may be possible to get a '100% mortgage' (i.e. a mortgage without deposit) from other mortgage providers. However, you should be aware that a 100% mortgage may be subject to relatively high interest rates, so the total cost of your mortgage could be considerably more expensive.
  • You should also consider an increased risk of 'negative equity'. This is when your property is worth less than the amount you've borrowed. With a 100% mortgage, even a modest fall in the value of your home could result in negative equity.
Joint picture frame and a piggybank

Will I need another deposit when moving house?

A deposit is usually paid to the seller when contracts are exchanged, which your conveyancer will transfer to the seller’s conveyancer on the exchange date. This is usually around 10% of the total purchase price of the property but there may be scope to negotiate this.

It's best to discuss your circumstances with your conveyancer, who will be able to advise the sources of funds that you may be able to consider to cover your exchange deposit.

Other common mortgage deposit questions

Who do I pay my mortgage deposit to?

When purchasing a property, you will appoint a conveyancer. This party, usually a solicitor, is a legal representative who will act on your behalf throughout this process.

Your conveyancer will generally manage the movement of funds to the selling party's legal representative, so money for a deposit would normally be provided to your conveyancer.

If you are transferring substantial sums of money to a conveyancer, be aware of scams. Be sceptical with any emails or other messages asking you to transfer money, even if they appear to be from your conveyancer. If you have any suspicion at all, or feel you are being pressured to transfer any funds, contact your conveyancer directly over the phone, using a number you are familiar with or from their website, and ask them to verbally verify the details.

Can my parents contribute towards my deposit?

Yes, it's normally fine for parents or other family members to gift you money for all, or some of your mortgage deposit. This is often referred to as a 'gifted deposit'.

In this scenario, a mortgage lender will expect you to prove the money is a gift, without expectation of repayment.

This usually takes the form of a gifted deposit letter, signed by the gifting party(ies). Your conveyancer will help ensure the letter is sufficient as a legal statement for mortgage lenders to consider during a mortgage application.

Learn more about Royal Bank's gifted deposit policy

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