Deposits

One of the first, and most important, steps in the home-buying journey is understanding how deposits work. The deposit is a central part of securing a mortgage and taking ownership of a property. Simply put, your deposit is the amount of money you contribute upfront toward the purchase price of your new home. The remainder is covered by your mortgage loan.

In most cases, lenders will expect you to put down a deposit of at least 5 to 10 percent of the property’s value. However, the more you’re able to save, the broader your mortgage options become, and the more likely you are to access more favourable interest rates. A larger deposit shows lenders that you’re a lower-risk borrower, which can make a significant difference in both your monthly repayments and the overall cost of borrowing.

From how much deposit you might need and why it matters, to strategies for building your savings and understanding the different types of support available, we aim to help you feel informed and financially prepared for the next stage of your journey.

Why deposits matter

Your deposit doesn’t just reduce the amount you need to borrow; it also has a direct impact on the type of mortgage you can qualify for. Lenders often use what’s known as the loan-to-value (LTV) ratio to assess risk. The LTV compares the size of your mortgage loan to the value of the property you’re buying. A lower LTV, achieved by putting down a higher deposit, typically gives you access to better deals, lower interest rates, and a wider choice of lenders.

Saving for a deposit

Saving for a deposit can feel like a daunting task, especially when you’re juggling rent, bills, and the rising cost of living. But even small, regular contributions can make a big difference over time. Many buyers set a monthly savings goal and track their progress using budgeting tools or dedicated savings accounts. If you’re just starting out, reviewing your outgoings and identifying areas where you can make small sacrifices can help redirect funds toward your future home.

It’s also worth exploring government-backed savings schemes that are designed to help first-time buyers. These include products like the Lifetime ISA (LISA), which offers a 25% bonus on your savings up to a certain limit. If you’re eligible, these schemes can give your deposit a helpful boost.

Getting help with your deposit

Not everyone can save for a deposit on their own, and it’s common for first-time buyers in Scotland to receive help from family members, often referred to as a “gifted deposit.” If you’re receiving support in this way, your solicitor will help make sure everything is properly documented and that your lender is aware of the arrangement.

In addition to personal support, there are also shared equity and government schemes that can reduce the deposit you need. These vary depending on your circumstances and the value of the property you’re buying. Some new-build developments may also offer incentives such as deposit contributions, which can ease the financial pressure.