How to Save for a House Deposit in the UK (2026 Guide)

The average UK home cost about £273,000 in mid-2026, according to the Office for National Statistics. A 10% deposit on that is around £27,000, before solicitor's fees, surveys and moving costs. Most people who get there do it with a fixed monthly amount and a few years of patience.

Work Out Your Target Deposit

Start with the price, then the percentage. Our [affordability calculator](/affordability-calculator) gives a rough idea of how much a lender might offer on your income, which tells you the price range you can aim for.

Lenders price mortgages by loan-to-value (LTV), the share of the price you borrow. A 5% deposit means a 95% LTV mortgage, which usually carries the highest rates and the fewest deals. Rates tend to improve at each 5% step.

To see what that can mean: on a £250,000 home over 25 years, borrowing £237,500 at 5% costs about £1,388 a month. With a 10% deposit you borrow £225,000, and if that earns you a rate of 4.5% the payment falls to about £1,251. That is roughly £138 a month less. The rates here are illustrative and real ones move with the market.

First-time buyers in England and Northern Ireland pay no stamp duty up to £300,000. Above that, budget for it with our [stamp duty calculator](/stamp-duty-calculator).

Open a Lifetime ISA

If you are aged 18 to 39, a Lifetime ISA (LISA) is hard to beat for a first home. You can pay in up to £4,000 a tax year and the government adds a 25% bonus, worth up to £1,000 a year. The £4,000 counts towards your overall £20,000 ISA allowance.

The rules matter more than the headline:

The home must cost £450,000 or less, and you must be buying it with a mortgage
Your first payment must have been in the account for at least 12 months before you use it
Your solicitor or conveyancer requests the money from your provider, so tell them early

Take money out for any other reason before you turn 60 and HMRC applies a 25% withdrawal charge to the whole amount, which costs more than the bonus: pay in £1,000, receive £250 bonus, withdraw £1,250 and you get £937.50 back. If you might buy in London, check the £450,000 cap will not catch you.

The government has consulted on replacing the LISA with a First-Time Buyer ISA, expected from April 2028. Under the proposals, existing LISA holders could keep paying in on current rules, but the details are not final.

Automate the Saving

Set up a standing order for payday so the money moves before you can spend it. Saving whatever is left at the end of the month rarely works.

Our [savings calculator](/savings-calculator) shows the monthly amount needed to reach your target by a chosen date. As a guide, £500 a month for four years in an account paying 4% grows to about £26,000. Put £333 of that £500 into a LISA and the bonus adds another £4,000, taking you to roughly £30,000.

Choose the Right Accounts

Keep a deposit you plan to use within a few years in cash. A stock market fall shortly before you buy could leave you short. A sensible split:

An easy-access account or cash ISA for money you might need at short notice
A fixed-rate account or fixed cash ISA for money you won't touch for one or two years, which usually pays a little more

Avoid leaving deposit savings in a current account, where interest is low or nil. The Financial Services Compensation Scheme (FSCS) protects up to £120,000 per person per banking licence if a UK bank fails.

From 6 April 2027 the government will cut the cash ISA limit to £12,000 a year for under-65s. The overall £20,000 ISA allowance stays, and a LISA can use part of the remainder.

Cut the Biggest Costs

Housing, transport and food take the largest share of most UK budgets, so changes there save more than cutting coffees. Moving to a cheaper rental, taking a lodger (the Rent a Room scheme lets you earn up to £7,500 a year tax-free), selling a car you rarely use or living with family for a year can add thousands to your savings. Our [budget calculator](/budget-calculator) helps you see where your money goes now.

Use Windfalls Well

Bonuses and tax refunds tend to disappear into everyday spending unless you move them the day they arrive. A one-off £3,000 equals six months of saving at £500 a month. After a pay rise, raise the standing order before you get used to the extra.

Every few months, compare your account rate with the best available. When a fixed deal or bonus rate ends, many providers move you to a much lower rate, so put the end date in your calendar.