Emily's Mortgage Services LTD

Week Three- The Deposit!

Saving for a house deposit can feel like climbing a mountain with no snack breaks—but it doesn’t have to be miserable. With the right approach, you can build your deposit steadily, stay motivated, and even enjoy the process.

Typical Deposit Amounts in the UK

In the UK, the amount you need for a deposit depends on your target property and the mortgage lender’s requirements, some lenders will offer 0% deposit but for arguments sake, lets stick with 5% as the baseline here. As of 2026, typical deposit levels are:

• 5% deposit – Often available for first-time buyers through government schemes. For a £250,000 home, that’s £12,500.
• 10% deposit – More common for standard mortgages; £250,000 × 10% = £25,000.
• 20% deposit – Ideal for getting the best mortgage rates; for a £250,000 home, this is £50,000.

💡 Tip: Higher deposits usually mean lower monthly mortgage payments and more negotiating power.

Choosing Your Deposit Level

• 5% Deposit: Quickest to save, but higher monthly mortgage payments and sometimes stricter lending criteria.
• 10% Deposit: Balances speed of saving with better rates.
• 20% Deposit: Takes longer to save but usually gives the best interest rates and lower monthly payments. Also more likely to secure a competitive mortgage without paying for mortgage insurance.

Your choice depends on how quickly you want to buy, how much you can comfortably save each month, and your risk tolerance for higher monthly payments.

Savings Systems: ISAs and LISAs

If you’re in the UK, some savings accounts can give your deposit a boost:

• Cash ISA – Tax-free interest on your savings. Good for short-term saving if you want easy access to your funds.
• Lifetime ISA (LISA) – If you’re 18–39, you can save up to £4,000 per year and get a 25% government bonus (up to £1,000 per year) toward your first home or retirement.

💡 Pro tip: Use a combination of these accounts depending on your timeline. For example, LISA for long-term growth, Cash ISA for flexibility.

Estimating Your Ideal Deposit

Start by identifying the type of property you want and where:

1. Check average house prices in your target area. For example, in 2025:
   • London: ~£550,000
   • Manchester: ~£270,000
   • Edinburgh: ~£330,000
2. Multiply by your chosen deposit percentage.
3. Factor in additional costs: legal fees, stamp duty, moving costs—usually another 5–10% of the property price.

Example:
Buying a £300,000 flat in Manchester with a 10% deposit:

• Deposit = £30,000
• Additional costs (~£15,000)
• Total savings needed = £45,000

City and Avg House Price	5% Deposit	10% Deposit	20% Deposit
London (£550,000)	£27,500 → 2 yrs @ £1,150/mo	£55,000 → 3.5 yrs @ £1,300/mo	£110,000 → 5 yrs @ £1,850/mo
Manchester (£270,000)	£13,500 → 1 yr @ £1,125/mo	£27,000 → 2 yrs @ £1,125/mo	£54,000 → 3.5 yrs @ £1,300/mo
Birmingham (£280,000)	£14,000 → 1 yr @ £1,166/mo	£28,000 → 2 yrs @ £1,166/mo	£56,000 → 3.5 yrs @ £1,333/mo
Edinburgh (£330,000)	£16,500 → 1.5 yrs @ £916/mo	£33,000 → 2.5 yrs @ £1,100/mo	£66,000 → 4 yrs @ £1,375/mo
Leeds (£250,000)	£12,500 → 1 yr @ £1,041/mo	£25,000 → 2 yrs @ £1,041/mo	£50,000 → 3.5 yrs @ £1,190/mo
Bristol (£350,000)	£17,500 → 1.5 yrs @ £972/mo	£35,000 → 2.5 yrs @ £1,166/mo	£70,000 → 4 yrs @ £1,458/mo
Cardiff (£260,000)	£13,000 → 1 yr @ £1,083/mo	£26,000 → 2 yrs @ £1,083/mo	£52,000 → 3.5 yrs @ £1,238/mo

Saving Without Feeling Miserable

• Automate your savings: Set up a monthly transfer straight into your ISA or LISA.
• Set micro-goals: Break your target into smaller milestones. Celebrate hitting 25%, 50%, and 75%.
• Cut, don’t punish: Make small, sustainable lifestyle changes instead of drastic austerity.
• Side income: Consider freelance work, selling unused items, or cashback apps to accelerate your goal.

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Saving for a house deposit doesn’t have to feel like deprivation. With the right plan, realistic targets, and government-friendly accounts like the LISA, you can make 2026 the year you finally turn your “one day” into “day one.”