How Much Deposit Do You Need to Buy a House in Newcastle?

If you’re thinking about buying a home, especially as a first time buyer in Newcastle, one of the first things to plan for is your mortgage deposit.

The amount you’ll need depends on the value of the property you want to buy and the type of mortgage you’re applying for.

In most cases, the minimum deposit required is 5% of the purchase price.

Based on a property you’re interested in that is around £175,000, you’d need to save at least £8,750 to meet that 5% threshold.

Saving More Than 5% Can Help You Get A Better Mortgage Deal

While 5% is the minimum deposit for many mortgages, saving a larger amount often works in your favour.

The more you can put down, the more mortgage deals become available to you, and with better interest rates.

A larger deposit reduces the risk to the lender, which is why buyers who can provide 10%, 15%, or even 20% deposits often benefit from more competitive rates and lower monthly repayments.

As mortgage advisors in Newcastle, we always explore your deposit options to see if stretching a little further could open up better mortgage choices.

Why do I need a deposit to buy a house?

Lenders require a deposit because it shows you are financially invested in the property.

Your deposit acts as your stake in the purchase, reducing the risk for the lender should house prices fluctuate or if repayments aren’t maintained.

If you’re a first time buyer in Newcastle, saving that first 5% can feel like a challenge, but it demonstrates to lenders that you’re prepared for the financial commitment of owning a home.

Is a 5% deposit enough for first time buyers?

A 5% deposit is usually enough to access a 95% mortgage, provided you have a good credit history and meet the lender’s affordability checks.

Some lenders may still consider applications from buyers with a smaller deposit and lower credit score, but the interest rates are typically higher.

If you’re a first time buyer, we’ll help assess whether a 5% deposit will give you access to the mortgage deals you need, or if saving a little more could significantly improve your options.

How much deposit do I need for a buy to let property?

If you’re buying a property to rent out, the deposit requirements are different.

Most buy to let mortgages in Newcastle require a minimum of 25% of the property’s value as a deposit.

This higher threshold reflects the different risks lenders associate with rental properties, as well as the separate affordability criteria based on projected rental income.

Can I use a loan for my deposit?

Most lenders don’t accept deposits funded by loans, as this still amounts to borrowing the full cost of the property.

For lenders, this adds too much risk, since your total debt would increase beyond the mortgage itself.

If you’re unsure how to build up your deposit, we can help you explore alternative routes, including gifted deposits or government-backed schemes.

Can I use a gifted deposit?

A gifted deposit is a common way for family members to help first time buyers get on the property ladder.

Whether the money comes from parents, grandparents, or other relatives, the person gifting the deposit will need to confirm that it is a gift with no repayment expected.

This is particularly popular with first time buyers in Newcastle who need a little help reaching that 5% or 10% deposit mark.

Our mortgage advisors in Newcastle can guide you through the process to ensure everything is structured correctly for your lender.

Date Last Edited: July 17, 2025