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Mortgage deposits explained
We can help you understand why you need a deposit to buy a house and offer some tips on saving up for one.
What is a mortgage deposit?
When you buy a house, you’ll need to pay a chunk of money upfront – this is called a mortgage deposit. The rest of the money you need to buy a house will be made up by getting a mortgage.
How much you need for a deposit will depend on your mortgage lender and the price of the house you’re buying. Generally, the deposit amount will be between 5% to 20% of the property’s purchase price.
Why you need to pay a deposit
When you pay a mortgage deposit, you’re giving security to your mortgage lender for the loan.
The larger the deposit, the less you’ll need to borrow, and the lower your monthly mortgage will be. It’ll also give you more equity in your home and a better loan to value ratio.
Paying a bigger deposit may also mean you get a better interest rate on your mortgage.
Saving for a deposit
Set yourself a monthly savings goal using our savings tools. We also have some tips on saving for a deposit.
Spending insights
Have a look at your current spending habits and see where you can reduce some of your spending.
Where you can, cut back on some of the things you buy. Set up a standing order into your savings account for the money you save.
Save the Change®
Activate the Save the Change feature in our app or online banking.
When you use your Halifax debit card, we'll round what you spend to the nearest pound. We’ll then transfer the change into your nominated savings account.
Budget calculator
Use our budget calculator to work out how much you can put aside each month. If you can save £100 per month, you’ll have saved £6,000 in five years.
Set up a standing order into a savings account and earn interest as you save.
Save with a partner
If you buy a house with a partner, saving for a mortgage deposit could be a lot easier if you pool your resources.
Saving together could help you reach your mortgage deposit goal faster.
Help from relatives
Many people turn to the bank of mum and dad when saving for a mortgage deposit.
If your parents or other relatives give you a cash gift, you’ll need to tell your mortgage lender.
Mortgage options
If you’re a first-time buyer, saving a large deposit can be tricky. There are some mortgage options that can help.
Shared ownership
You’ll pay a smaller deposit with a shared ownership mortgage. This is because you only pay a deposit on the part of the house you are buying and not on the value of the whole house.
But remember, you’ll also have to pay rent on the part you don’t own.
Family Boost mortgage
With our Family Boost mortgage, your family puts in 10% of the house purchase price into a 3-year fixed term savings account to act as your deposit.
The property will be all yours. Your family will get their savings back after the three years, plus interest, if you keep up with your repayments.
Government-backed schemes
There’s a range of government-backed initiatives to help you onto the property ladder.
These include Right to Buy, Shared Ownership and the Help to Buy: Equity Loan. So, if you're a first-time buyer, there could be a scheme that will help you.