Do You Really Need a 20% Deposit to Buy Your First Home?

If you have been putting off buying your first home because you do not think your deposit is big enough, you are not alone — and you may be closer to the property ladder than you think.

Recent industry research suggests that a significant number of aspiring homeowners are holding back based on assumptions about deposit requirements that simply do not reflect the reality of what is available in today’s market. The findings point to a widespread ‘deposit myth’ — a belief that a large upfront sum is the only way in.

It is a misconception that could be costing first-time buyers years of unnecessary waiting.

What the Research Reveals

The figures make for striking reading. Around three quarters of prospective buyers are unaware that mortgages exist with just a 5% deposit requirement. Four in five have never heard of ‘track record’ mortgages — products specifically designed to help renters demonstrate their ability to afford a mortgage by evidencing a consistent record of rental payments. And seven in ten are not aware of the full range of family-assisted options available to them.

Perhaps most revealing is this: only half of first-time buyers correctly identify 5% as the typical minimum deposit. A significant proportion believe 10% or more is required before they can even begin.

These are not minor knowledge gaps. For many buyers, they represent the difference between taking action and standing still.

Family Help Does Not Have to Mean Cash

One of the most overlooked routes into homeownership involves family support — but not necessarily in the way most people assume.

More than half of first-time buyers say they would consider a parent or family member helping to boost their borrowing power. The important point is that nearly a third did not realise this was even possible. Family-assisted mortgages do not always require a lump sum gift. There are products that allow a family member to support an application in other ways — through savings linked to the mortgage, a charge on their own property, or by acting as a guarantor.

The options are broader than many buyers realise.

What Products Are Available?

Understanding the landscape is the first step. The key options worth knowing about include:

• 95% LTV mortgages — these allow you to buy with just a 5% deposit, meaning a £200,000 property could be within reach with a £10,000 deposit
• Track record mortgages — designed for renters who can show a strong history of meeting rental payments on time, even where savings are limited
• Family-assisted mortgages — a range of products that allow parents or other close family members to support an application without necessarily providing cash upfront
• Shared ownership — an alternative route where you buy a share of a property and pay rent on the remainder, with the option to increase your share over time
• Government schemes — eligibility and availability change, so it is worth getting up-to-date advice on what is currently accessible

No single product suits everyone. The right route depends on your income, your deposit, your rental history, and your family circumstances.

The Bigger Picture

The deposit is just one piece of the puzzle. Recent data also highlights that nearly a third of aspiring buyers say they do not know how to get started with the homebuying process at all. That broader uncertainty — around steps, timelines, and where to begin — is itself a barrier.

Speaking to an adviser early in the process can cut through that confusion. A whole-of-market broker can assess your individual position, explain which products are realistically available to you, and map out the steps from where you are now to getting keys in hand.

You may find you are further along than you assumed.

Talk to Us

At Impact Specialist Finance, we work with first-time buyers at every stage — whether you are ready to apply or simply trying to understand your options.

There is no obligation to proceed, and no pressure. If you want an honest picture of where you stand and what is achievable, we are happy to talk it through.

Get in touch via our Contact Us page to speak with one of our advisers.

Your home may be repossessed if you do not keep up repayments on your mortgage. The information in this blog is for general guidance only and does not constitute financial advice. Please seek independent advice based on your own circumstances.