Deposit For First Time Buyers

If you are a first time buyer, you will usually need to pay a deposit towards your home, even if you will be taking out a mortgage. We share our deposit tips for first time buyers and answer some of the most commonly asked questions about deposits for first time buyers, including:

  • How much deposit do first time buyers need?
  • How do I fund a deposit to buy my first home?
  • Can I buy a house with no deposit?
  • The house builder is paying 5% of the price; do I need to pay a deposit?
  • When do I pay the deposit for a house purchase?

At Lockings Solicitors, we have been representing first time buyers in East Yorkshire and elsewhere for many years. We understand that purchasing your first home can seem daunting and we will always make sure that we are available to support you and answer your questions.

We have a high level of experience in dealing with property transactions and we always work proactively to complete as quickly as possible so that you can move into your new home. Should difficulties arise, we have the expertise to manage them effectively.

We offer a FREE initial chat so that you can ask us any questions you may have. Call us on 01482 300 200, email us at or fill in our Free Online Enquiry and we will call you back promptly. We have offices in Beverley, Hull and York and we deal with conveyancing in East Yorkshire and beyond.

We are on the panels of approved solicitors of all major mortgage lenders and hold the Law Society’s Conveyancing Quality Scheme (CQS) accreditation in recognition of our high levels of legal competence, risk management and client service.

How much deposit do first time buyers need?

You will normally need a deposit of at least 5% of the purchase price of the home you want to buy. There are a range of 95% mortgages available, but you should be aware that mortgages tend to have higher interest rates the higher the percentage that you borrow. Your repayments will also be larger and you need to make sure that you will be able to afford them comfortably.

There are far more loans to choose from if you have a deposit of 10%, and many first-time buyers try to save 15% or more before stepping onto the property ladder.

You also need to budget for other expenses. Briefly, these are likely to include:

  • Mortgage arrangement fee
  • The lender’s valuation fee
  • Survey
  • Conveyancing costs, to include search fees
  • Land Registry fee for registering your purchase

If you ring to speak to one of our team, we will be happy to let you have a breakdown of the conveyancing costs.

How do I fund a deposit to buy my first home?

For most people, funding a deposit involves saving for a period of time. There are other options which may help you secure the deposit you need.

Lifetime ISA

The government offer a Lifetime ISA scheme for those aged between 18 and 40. You can pay in up to £4,000 each year and the government will add a bonus of 25%, which is up to £1,000,+ each year. The money can be used to buy your first home or saved until you are aged 60 or over. You will pay a penalty if you withdraw money under other circumstances.

Your purchase should be at least one year after the date of your first payment into the Lifetime ISA and you need to be buying a property with a mortgage.

Help to Buy ISA

If you already have a Help to Buy ISA, you can use this, but it is no longer possible to take out a new Help to Buy ISA.

Help to Build

If you are considering building your own home or hiring someone to do this for you, you may be eligible for a government-backed Help to Build equity loan. This will be for between 5% and 20% of the cost of the land and building. You will need a self-build mortgage from a registered Help to Build lender.

A deposit of 20-25% is usually payable. You would typically pay a 5% deposit and the equity loan would provide the remainder.

First homes scheme

Government discounts are available in respect of some newbuild properties, although they are not always widely available and local authorities may prioritise certain individuals, such as essential workers, those on low incomes and those already living in the area.

The discounts offered are 30-50% of the market value and are only available to first time buyers who have never owned a property before. When you sell the property, you will also need to sell to a first time buyer and provide them with the same percentage discount that you received.

You need to be able to secure a mortgage for at least half of the price of the home and will usually need a deposit of at least 5% of the discounted price.

Deposit gifted by house builder

Developers sometimes offer to gift the deposit to purchasers of new build homes. This is not generally popular with lenders and you may struggle to find a mortgage company that is happy to lend on this basis. If you do find a lender, they are likely to want you to pay a deposit yourself as well and their loan may be based on the purchase price less the amount gifted by the developer.

Deposit from family

Parents may offer to provide you with a deposit, either as a gift or as a loan. You will need to notify your lender of this and there will be extra legal work involved in putting the right documentation in place.

Can I buy a house with no deposit?

Lenders rarely offer 100% mortgages and if you do find one, they are likely to want a family member to guarantee your loan. The interest rates are likely to be high and application fees also tend to be more than usual. There is also a risk that if property prices fall you could end up in difficulties if you wish to sell.

When do I pay the deposit for a house purchase?

If you ask us to represent you in your purchase, we will ask you for your deposit as we approach exchange of contracts. This is when the contracts become legally binding and a date for completion is set. The deposit is paid to the seller’s solicitor on the day that contract exchange takes place, so we will need cleared funds from you prior to that day.

We will let you know in plenty of time and also provide you with a completion statement so that you can see how much is needed in total to complete your purchase.

Contact our East Yorkshire house buying solicitors

If you are thinking of buying your first home and you would like to speak to one of our expert property solicitors, we would be happy to hear from you. We can answer your questions about deposits and the purchase process and explain how to get started on the road to home ownership.

You can ring us for a FREE initial chat on 01482 300 200, email us at or fill in our Free Online Enquiry and we will call you back promptly. We have offices in Beverley, Hull and York and deal with conveyancing in East Yorkshire and beyond.

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