A house deposit is often tens of thousands of pounds — a significant amount that takes years to save without a strategy. But with the right combination of high-interest accounts, government bonuses, and disciplined saving, you can reach your target significantly faster.
How Much Do You Actually Need?
Many lenders accept a 5% deposit, helped by the government-backed Freedom to Buy guarantee, but a 10% deposit opens up a much wider choice. On a £250,000 property, 10% is £25,000. A 15-20% deposit gives access to noticeably lower mortgage rates, which can save thousands over the mortgage term. If your parents can help (Bank of Mum and Dad or a guarantor or family-assisted mortgage), that can also widen your options.
- 5% deposit: 95% LTV mortgages available, highest rates
- 10% deposit: much wider mortgage choice
- 15-20% deposit: best rates unlocked
- Every 5% extra deposit typically improves your mortgage rate
- Target 10% minimum, 15% if achievable within your timeframe
Best Accounts for Saving a Deposit
Your deposit savings should be working hard in high-interest accounts while you save. Rates change often, so compare the current best buys on MoneySavingExpert or Moneyfacts, or see our guide to high interest savings accounts and Cash ISAs. The Lifetime ISA (LISA) is specifically designed for first-time buyers and adds a 25% government bonus.
- Lifetime ISA: 25% government bonus on up to £4,000/year = £1,000 free/year
- Cash ISA: interest is tax-free, and flexible versions let you withdraw and replace money in the same tax year
- Regular Saver: often the highest headline rates, but only on limited monthly amounts (usually £50-£300/month)
- Easy-access savings: use for the emergency fund portion
- Fixed-rate bonds: higher rates, but lock money away for 1-5 years
Should I use a LISA for a house deposit?
Yes, if you're 18-39, haven't owned a property before, and are buying under £450,000. The 25% bonus is genuinely free money. The 25% charge on non-qualifying withdrawals (25% of the amount you take out, which claws back the bonus and some of your own money) means you must be committed to using it for a first home.
Creating a Realistic Savings Timeline
Work backwards from your target. If you need £30,000 and can save £700/month, you're looking at about 40 months (over 3 years). Factor in LISA bonuses (up to £1,000/year) and savings interest — together these can shorten your timeline by several months on a £30,000 target.
- Calculate: target ÷ monthly savings = rough months to target
- Add LISA bonus: up to £1,000/year reduces timeline
- Add savings interest on the growing pot
- Build a specific target date — makes saving feel purposeful
- Review and adjust every 6 months
Increasing Your Savings Rate
The fastest lever is increasing your monthly savings contribution. Every extra £100/month saved shortens your timeline significantly. Consider moving to a cheaper rental during your saving period, eliminating non-essential subscriptions, taking on additional income, or receiving a pay rise specifically earmarked for the deposit pot.
- Automate savings on payday — don't leave it to willpower
- Review subscriptions and cancel non-essentials
- Any windfall (tax refund, bonus) goes to deposit pot
- Even moving from 60% to 70% savings rate shortens timeline substantially
- Consider house-sharing to save on rent while saving for deposit
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