Buying your first home is exciting, but saving for a deposit can feel overwhelming. With property prices rising, many first-time buyers aren’t sure where to start – or if it’s even possible at all.
In this guide, you’ll learn practical steps to save for a house deposit. We’ll explain how to set a realistic savings target, plan a timeline, and strengthen your credit score before securing a mortgage.
How to save a deposit for a house: 5 simple steps
If you’re at the early stage of saving for a house deposit, clarity and structure matter more than income. Below is a more detailed breakdown of each step so you can turn a vague goal into a concrete financial plan.
1. Understand how much you actually need
Most lenders require between 5% and 20% of the property price as a deposit. At this stage, your goal is to set a realistic budget with this in mind.
For example, for a £250,000 home, you’ll need:
- 5% = £12,500
- 10% = £25,000
- 20% = £50,000
While the minimum deposit for a house can get you on the ladder sooner, a 10%–20% deposit often unlocks better mortgage rates and reduces your monthly repayments over time.
It’s also important to consider other costs you’ll need to budget for. First-time buyers often underestimate the additional expenses involved in buying a property.
Here are some of the costs you’ll need to account for:
- Solicitor/conveyancing fees, including searches (£1,000–£2,000)
- Surveys and valuations (£500–£2,000 depending on the type of survey you want and how much the surveyors charge).
- Mortgage broker fees (usually up to £500)
- Stamp duty (prices vary depending on the value of your property and whether you’re a first-time buyer)
- Removal costs (up to £1,000 for a professional removal company, or around £250 to hire a van and move items yourself).
For up-to-date guidance in the UK, it’s worth checking resources like MoneyHelper or the government website to understand current thresholds, first-time buyer reliefs, and government schemes.
2. Set a timeline you can actually commit to
Your timeline determines your monthly savings requirement. Without a timeframe, your goal becomes open-ended and easy to delay.
Ask yourself:
- Do I want to buy a house within 2 years?
- Am I flexible if it takes 4–5 years?
- Is my career income likely to increase during this time?
From here, you can work out how much you need to save each month to hit your target in the necessary timeframe.
For example, if your target deposit is £25,000 and your timeline is 3 years, you need to save around £750 per month.
Side note: You’d actually need to save £781.25 per month, but you should accrue interest on your savings, so you likely won’t need to save that full amount!
Seeing that number clearly forces a practical decision: is this manageable, or do I need to extend the timeline?
If £750 feels unrealistic, stretching the plan to 4 years drops the required monthly savings significantly. There’s no “right” timeline, only one that you can consistently sustain.
3. Open a dedicated savings account
Psychologically and practically, your house deposit should sit in a separate account. This reduces the temptation to dip into it and allows you to track progress clearly.
Plus, you can find a savings account with a better interest rate than your current account or an easy access saver.
In the UK, common options include:
- A Lifetime ISA (LISA), which offers a 25% government bonus (subject to limits and eligibility – for example, you must be 18 and 39 to open an account and the property purchase price must be less than £450,000).
- A high-interest easy-access savings account, like these accounts listed on MoneySavingExpert.
- A fixed-rate savings account if your purchase date is several years away.
A LISA can significantly accelerate your savings because the government adds £1 for every £4 you contribute, up to the annual cap. Over several years, this bonus can add thousands to your deposit.
It’s also worth noting that interest rates fluctuate. Keep an eye on the best rates and accounts to make sure you’re getting the biggest return on your savings.
4. Audit your current financial position honestly
Before trying to increase income, start with visibility. Go through your last three months of bank statements and categorise your spending:
- Fixed costs (rent, utilities, insurance)
- Variable essentials (food, transport)
- Lifestyle spending (subscriptions, eating out, travel, shopping)
Most people discover small but consistent leaks that compound over time. Cutting £200 per month doesn’t feel dramatic, but that’s £2,400 per year. Over three years, that’s £7,200 toward your deposit.
Top tip: If you’re self-employed or run a small business, try not to rely purely on variable income. Build your savings plan around your lowest predictable monthly income and treat any surplus as acceleration rather than a necessity.
5. Strengthen your credit profile while you save
A stronger credit profile improves your mortgage options and can result in better interest rates, which may save you thousands over the life of your loan.
During your saving period:
- Pay every bill on time
- Avoid multiple new credit applications
- Keep credit utilisation low
- Stay on the electoral roll
Top tip: Check your credit report regularly and fix any errors early to avoid delays when applying for a mortgage. Tools like the MoneySavingExpert Credit Club (TransUnion) or the Experian app let you check your score for free. Some banks (like Monzo) also let you track your score.
FAQs about saving for a house deposit
What is the best way to save for a house deposit?
Set a clear target based on your desired property, create a monthly savings plan, and automate transfers to a dedicated account. Reduce unnecessary spending, track progress, and add any extra income or windfalls directly to your deposit fund to reach your goal faster.
What savings accounts can you use for a house deposit?
Use a dedicated account to separate deposit funds. Options include high-interest savings accounts, fixed-term accounts, or a Lifetime ISA (LISA) for a 25% government bonus.
How long does it take to save a house deposit?
The timeline depends on your target amount and monthly savings. For example, a £25,000 deposit saved at £500/month takes roughly 4 years. Adjust your monthly contributions or timeline based on income, expenses, and any extra payments to reach your goal realistically.
What other ways can you build a house deposit?
You can boost savings through gifts or support from family, using windfalls like tax refunds or bonuses, or by selling assets. Combining these with regular savings accelerates your deposit and can help you reach your target sooner.
Can you buy a house with no deposit?
It’s possible to buy a house with no deposit, but it doesn’t happen very often.
Some lenders offer 95–100% mortgages, meaning little or no deposit is needed. These deals usually have higher interest rates and stricter eligibility criteria, making monthly repayments more expensive and increasing financial risk.
Some lenders offer 95% to 100% mortgages, meaning you only need a small deposit or none at all. However, these products often come with higher interest rates and tighter lending criteria, increasing the overall level of risk.
Top tip: Find out how Genesis homebuyers can get on the property ladder with a 5% deposit!
Take the next step towards your dream home
With a clear savings goal, a realistic timeline, and a smart place to grow your money, you can make steady progress towards building a house deposit. Stay consistent, keep an eye on your spending and adjust when needed.
When you’re ready, Genesis Homes can help you find your first property! Take a look at some of our latest new build home developments or reach out to the team to discuss what you’re looking for.