You may only need a 5% deposit to buy a house in London, depending on your circumstances and the mortgage you are eligible for.
There are also a small number of mortgages available with deposits as low as 2%, although these are more restricted and will not be suitable for every buyer.
The deposit you need ultimately comes down to your income, credit history, the property you are buying and the lender’s criteria.
Can I Buy a House in London With a 5% Deposit?
Yes, a 5% deposit can be enough to buy a property in London.
This would usually mean taking out a 95% loan to value mortgage, with your deposit covering the remaining 5%.
For first time buyers in London, this can make buying more achievable without needing to build up a much larger deposit before applying.
You will still need to meet the lender’s affordability and credit criteria, and the property itself must also be acceptable for the mortgage.
Can I Get a Mortgage With a 2% Deposit?
Potentially, yes.
A small number of mortgage lenders now offer products that allow eligible first time buyers to purchase with a deposit as low as 2%.
These mortgages are much less widely available than standard 5% deposit products and usually come with additional eligibility requirements.
This means a 2% deposit should be viewed as an option for certain buyers rather than the new standard minimum.
Does a Bigger Deposit Make a Difference?
A larger deposit can improve your mortgage options. Mortgage lenders price their products across different loan to value bands.
As the amount you borrow compared with the property value falls, you may gain access to a broader range of products and potentially lower mortgage rates.
The difference does not always appear with every small increase in deposit. What matters is whether your deposit moves you into a different loan to value bracket.
This is why two buyers with similar incomes can sometimes be offered different mortgage deals simply because one has a larger deposit.
Why Might I Need More Than 5%?
Some applicants may need a larger deposit because of their circumstances.
This can include having adverse credit, more complex income or other factors that reduce the number of lenders willing to consider the application.
The type and age of any credit issues can make a significant difference. A historic missed payment is not necessarily treated in the same way as recent defaults or other more serious problems.
There is no universal rule that says someone with bad credit needs a particular deposit percentage. It depends on the lender and the wider application.
Can My Deposit Come From Family?
Yes. Gifted deposits are commonly accepted by mortgage lenders.
A family member can provide some or all of the money needed for your deposit, provided the lender is satisfied that it is genuinely a gift and does not need to be repaid.
The person gifting the money will normally need to provide confirmation of this, and checks will also be carried out on the source of the funds.
Gifted deposits are frequently used by first time buyers who have some savings of their own and receive additional help from family.
Can I Buy Without a Deposit?
There are also a limited number of mortgages available where no traditional deposit is required.
These tend to be aimed at specific types of borrower, such as renters with a strong history of making regular rental payments, and they come with their own eligibility criteria.
They are much more restricted than 95% mortgages, so buying with no deposit will only be possible in certain circumstances.
What Deposit Will I Actually Need?
For most buyers, 5% remains a useful starting point, although lower deposit mortgages mean some first time buyers may now have options before reaching that figure.
The more important question is what mortgage you can actually qualify for with the deposit you have.
A mortgage broker in London can compare lenders based on your income, credit history and deposit to establish which loan to value options are realistically available before you start making offers on properties.
Date Last Edited: August 21, 2026
