It can be. Lenders operate at 95% loan-to-value, so a 5% deposit is workable. The choice of lender is narrower and the rate higher than at 10% or 15%, so it is worth understanding what waiting would buy you before deciding.

Can my parents gift me the deposit?

Usually yes. Most lenders accept gifts from close family with a short letter confirming the money is a gift, not a loan, and that the giver retains no interest in the property. Gifts from friends or more distant relatives are accepted by fewer lenders.

Do I need to show where the money came from?

Yes. Lenders are required to establish the source of funds, so expect to evidence savings history, a property sale, or a gift. Large unexplained deposits into your account shortly before applying will be queried.

Does a bigger deposit always mean a better rate?

Not smoothly — it improves in steps. Rates tend to break at 95%, 90%, 85%, 80%, 75% and 60% loan-to-value, so the useful question is whether a little more deposit would take you across the next threshold.

The Mortgage Deposit Guide

Written and reviewed by Lewis MaxwellLast updated 27 August 2026

Most people ask how much deposit they need. The more useful question is which loan-to-value band the deposit puts them in, because that is what actually determines the rate they will be offered.

Loan-to-value is the number that matters

Loan-to-value is the mortgage as a percentage of the property price. A 10% deposit means 90% loan-to-value. Lenders price in bands rather than on a sliding scale, so the difference between 90.5% and 89.9% can be far larger than the difference between 89.9% and 86%.

The practical implication: if you are close to a threshold, finding a small additional sum may be worth considerably more than the sum itself. Our affordability calculator shows the loan-to-value your deposit produces.

Where deposits are allowed to come from

Your own savings, evidenced by statements over several months
A gift from close family, with a letter confirming it is not a loan
Equity from selling a property you already own
Inheritance, with documentation
In some cases a Lifetime ISA, including the government bonus

Borrowed deposits — a personal loan or credit card — are almost universally refused, and in any case the new borrowing would reduce what you can afford.

Source of funds

Lenders must establish where the money came from. Build the deposit steadily in one account where you can, and avoid moving large sums between accounts shortly before applying — every transfer is another thing to explain.

Costs beyond the deposit

The deposit is not the only cash you need. Budget separately for legal fees, searches, a survey, possible stamp duty and moving costs. Buyers who put every last pound into the deposit often find themselves short at exchange, which is an avoidable and stressful position. See our home buying process guide for where each cost falls.

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