If you are buying a home in Birmingham, a 5% deposit can be enough for many mortgages, subject to your circumstances, affordability and the lender’s criteria.

This means you would typically borrow the remaining 95% of the property’s value with a 95% loan-to-value mortgage.

For example, buying a property for £200,000 with a 5% deposit would mean putting down £10,000 and applying for a £190,000 mortgage. If you had a 10% deposit, you would put down £20,000 and need to borrow £180,000.

There are also more specialist mortgage products available to some buyers with deposits as low as 2%. Certain 100% LTV mortgages can even allow eligible buyers to purchase without a traditional cash deposit.

These products have specific criteria and are much less widely available, so a 5% deposit remains a more useful starting point for many first time buyers.

You do not necessarily need the biggest deposit possible to buy your first home. What matters is whether your deposit, income and circumstances meet the criteria for a mortgage that can cover the remaining purchase price.

Is a 5% or 10% Deposit Better?

A larger deposit can change the mortgage products available because it reduces your loan-to-value, commonly known as LTV.

With a 5% deposit, you would usually need a 95% LTV mortgage. Increasing your deposit to 10% reduces this to 90% LTV, while a 15% deposit would bring it down to 85% LTV.

Lower LTVs can give you access to a different range of mortgage products and potentially different interest rates. This does not automatically mean that waiting until you have the largest possible deposit is the right choice.

If you already have enough for a 5% deposit, it may be worth finding out what mortgage options are available rather than assuming you need to continue saving until you reach 10%.

You should also consider the other costs of buying a home. Using all of your savings for the deposit could leave you with less available for legal costs, surveys, moving expenses and anything the property needs after you move in.

How Do Birmingham House Prices Affect Your Deposit?

The cash amount you need for a deposit will naturally increase or decrease with the price of the property.

Birmingham has a broad housing market, from flats and terraced houses to semi-detached homes, new-build developments and larger family properties. Prices also differ across the city and surrounding areas, so there is no single deposit figure that applies to every first time buyer.

A buyer looking at a £180,000 property would need £9,000 for a 5% deposit. Someone purchasing for £250,000 would need £12,500 at the same 5%.

This is why it can be more useful to look at the prices of the types of homes you are considering rather than focusing solely on Birmingham’s overall average house price.

Your deposit also needs to work alongside your mortgage borrowing. Having enough for 5% of the purchase price does not automatically mean a lender will offer the remaining 95%, as your income, expenditure and existing commitments will still need to meet its affordability assessment.

Can I Use a Gifted Deposit to Buy a House?

Your house deposit does not necessarily have to come entirely from your own savings.

Gifted deposits are commonly used by first time buyers, often with money provided by parents or other family members. The person providing the money will normally need to confirm that it is a genuine gift rather than a loan that needs to be repaid.

The mortgage lender will have its own criteria for accepting a gifted deposit, while your conveyancer will also need to complete the relevant checks around where the money has come from.

Other sources of deposit may also be acceptable depending on the lender and your circumstances. If some or all of your deposit is coming from somewhere other than your own savings, we can check how the lenders we work with are likely to treat it.

Your credit history and the property you are buying can also affect the deposit a lender requires. Some circumstances or property types may result in a lower maximum LTV, meaning a larger deposit is needed.

Helping First Time Buyers Get Onto the Property Ladder

You may be closer to buying your first home than you think. Having a 5% deposit can give eligible first time buyers access to 95% LTV mortgages, while more specialist low or no-deposit options may be available in certain circumstances.

As a mortgage broker in Birmingham, we can look at the deposit you have already saved alongside your income, regular commitments, credit history and the price of the property you want to buy.

Our mortgage advisors can then search the lenders we work with and establish the deposit requirements for mortgage products that may be suitable for your circumstances.

If you are deciding whether to buy with your existing deposit or continue saving, we can also look at how a larger deposit could change the mortgage options available to you.

Date Last Edited: October 22, 2026