The short answer is that it depends on the lender. Most require a minimum of 5% of the property price, though some new build lenders ask for 10% or more. The amount you put down affects which lenders are available to you and what rates they’ll offer, so it’s worth understanding how deposit size shapes your options.
Minimum deposit requirements
For a standard residential mortgage, lenders typically require at least 5% of the purchase price as a deposit. On a £250,000 new build, that’s £12,500.
However, new builds are treated differently by many lenders. With only a 5% deposit, your options for a new build are genuinely limited. A lot of the mainstream lenders won’t consider it, and those that do may not offer their most competitive rates. Many require 10% or 15% minimum for new build properties because of how they assess the valuation risk on a brand new home. This doesn’t mean 5% is impossible, but it does significantly narrow the field.
A whole-of-market broker can identify which lenders are comfortable with your deposit level and the type of property you’re buying. This is one of the areas where having someone who works with new build mortgages regularly makes a real difference.
How deposit size affects your options
The more you put down, the lower your loan-to-value ratio (LTV). That’s simply the percentage of the property’s value you’re borrowing. A 10% deposit means a 90% LTV. A 25% deposit means 75% LTV.
Lower LTV generally means access to more lenders and more competitive rates. The biggest jumps tend to happen at certain thresholds. Moving from 95% to 90% LTV, or from 85% to 80%, can open up noticeably different options. That said, even a small increase in your deposit can sometimes tip you into a better bracket.
It’s worth being realistic about this. Stretching to save a larger deposit is sensible if it’s achievable in a reasonable timeframe, but waiting too long carries its own risks. Property prices and interest rates don’t stand still.
Developer incentives
Many new build developers offer incentives to buyers. These can take different forms: cashback on completion, contributions towards legal fees or stamp duty, furniture packages, or upgrades to the specification.
Some developers also offer deposit contributions, effectively adding to your deposit to reduce your LTV. This can help you access better rates, but not all lenders accept developer-funded deposits in the same way. Some treat them differently from your own savings, and this affects the deals available to you.
Your advisor can explain how a specific developer’s incentive package works with different lenders, and whether it genuinely improves your position or simply shifts costs around. It’s worth having this conversation before you reserve a plot, not after. Our guide on developer incentives goes into more detail on how these packages interact with your mortgage.
Gifted deposits
If a family member is helping with your deposit, most lenders will accept this, but they’ll want to see a gifted deposit letter confirming the money is a gift, not a loan, and that the person giving it has no interest in the property.
Lenders may also want to see where the money has come from. This is a standard anti-money-laundering requirement, not a reflection on you or your family. A bank statement showing the funds and a brief explanation of their source is usually enough.
If your entire deposit is gifted, some lenders are comfortable with that while others prefer you to have at least some of your own savings involved. A broker can steer you towards lenders whose criteria match your situation.
Government schemes
Depending on where you’re buying, there may be government-backed schemes that help with your deposit or reduce the amount you need to borrow. These schemes have specific eligibility criteria and aren’t available everywhere, so it’s important to check what applies to your circumstances.
Schemes change over time. Some close, new ones launch, and eligibility rules get updated. Your advisor can tell you what’s currently available for your situation and whether a particular scheme would work alongside the lender and developer you’re dealing with.
Getting qualified early
If you’re looking at new builds, it’s worth speaking to a broker before you start visiting show homes. Our guide to the new build mortgage process walks through each stage from first conversation to keys. Knowing what you can afford, and having a clear picture of your deposit position, puts you in a stronger position when it comes to reserving a plot.
Developers want to know that their buyers can proceed. Walking in with a clear understanding of your borrowing capacity and deposit situation shows you’re serious, and it avoids the disappointment of falling in love with a property that’s outside your reach.
If you’re unsure where you stand, our advisors can walk you through the deposit picture for your situation and explain which lenders work best with the amount you have. Get in touch. It’s an informal conversation, not a commitment.
