A house deposit is typically the largest savings goal most people ever work towards. UK mortgage lenders usually require a minimum of 5-10% of the property price, with better rates at 15-25%. For the average UK property, this means a target of £15,000 to £75,000 or more depending on location.
Calculating your deposit target
Research average property prices in your target area via the GOV.UK UK House Price Index. A 10% deposit on a £250,000 property is £25,000. At £400 per month saving, that takes 62 months (just over 5 years). At £600 per month, 41 months.
The Lifetime ISA: the most valuable tool available
If you are aged 18-39 and buying your first home, the Lifetime ISA offers a 25% Government bonus on up to £4,000 per year — worth up to £1,000 per year in free money. The property must cost £450,000 or less. You must have held the LISA for at least 12 months before using it.
If you withdraw for any other purpose, you pay a 25% penalty — losing not just the bonus but some of your own contributions. Open a LISA as early as possible to start the 12-month clock.
A worked example: joint deposit saving
Two first-time buyers each open a Lifetime ISA. Each contributes £333 per month (£4,000 per year). Government bonus adds £1,000 per year each. After five years: each person has contributed £20,000, received £5,000 bonus, plus interest. Combined total: approximately £50,000+.
Other Government schemes to consider
Shared Ownership allows you to buy a percentage of a property with a smaller deposit required. First Homes offers properties at a minimum 30% discount to eligible first-time buyers. Check GOV.UK for current schemes. Consult an FCA-authorised mortgage broker for personalised advice.
- Open a Lifetime ISA early to start earning the 25% Government bonus
- Set up an automatic monthly transfer to your LISA or deposit savings account on payday
- Keep deposit savings in a high-interest account while building the target
- Both partners in a couple can each have a separate LISA — doubling the bonus
General guidance only — not regulated financial advice.