Almost one in five first-time buyers seeking mortgages with a 40% deposit: Moneyfactscompare

by Aaron Strutt

Nov 01 2025

While lower deposit mortgages dominate first-time buyer demand a significant minority are seeking 40% deposit deals.

Data from Moneyfactscompare.co.uk shows almost one in three (31%) first-time buyers are opting for 10% deposit mortgages, and a further 10% are looking at 5% deposit options. This hints at many first-time buyers relying on 5-10% deposits. This translates to £13,650 to £27,300 at the average UK house price of £272,995 [source].

Almost one in five (17%) of first-time buyers are often seeking the most competitively priced mortgages when they have more than a 40% deposit. For context, a 40% deposit on the average UK house price would require a deposit of around £110,000, highlighting that there is a distinct group of first-time buyers in a favourable financial position.

Monyefacts says borrowers with smaller deposits, or those who have accumulated less equity, could be paying £134 more per month more compared to those with a larger deposit or equity to borrow the same amount.

Homeowners with around 25% equity are more likely to make their next move on the housing ladder, with this threshold potentially acting as a key financial or psychological milestone before progressing to a new property.

Aaron Strutt, product director at Trinity Financial, says: "We speak to first-time buyers in all different financial situations, some of them have a larger deposit either from savings or that has been gifted to them. Others need an income stretch to get a mortgage with a smaller deposit.

"Thankfully, there are low deposit mortgages available, so buyers do not need a huge deposit any more. There are no-deposit mortgages, a 2% deposit deal, and £5k deposit deals. Plus many 5% deposit options."

Mortgage lenders offer their lowest rates to borrowers with clean credit histories, a track record of income, plus a 35% to 40% deposit. Rates are not much more expensive for those with 25%, 20% or even 15% deposits. They get more expensive with 10% and 5% deposits. 

Source: Moneyfactscompare figures based on mortgage searches on their website over a month

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The information contained within was correct at the time of publication but is subject to change.

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