Saving for a house deposit? Reach your goal faster this UK Savings Week

With just over two in five aspiring first-time buyers expecting to take more than five years to save a sufficient deposit, prospective homeowners are urged to review their savings accounts.

Saving for a house deposit can be a lengthy and stressful process, with it taking many prospective buyers several years to build up their pots. Over 40% of hopeful first-time buyers believe it will take them more than five years to save a house deposit, while over 30% expect to receive financial help towards a deposit from family members, according to the Financial Conduct Authority’s Financial Lives 2024 Survey.

However, there are steps you can take to reach your goal faster. This UK Savings Week could be a good reminder for aspiring homeowners to review the ways they save towards their future home.

“There are several types of savings products you could consider when building your house deposit, including a Lifetime ISA, easy access account, regular saver and cash ISA,” Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said.

How to save for a house deposit

How much you save per month will be affected by your income and financial situation. Knowing what you will need to save up for your deposit can help you to work out how much to put away each month. The minimum deposit required by most lenders is 5% of the property value – meaning you would need a mortgage at 95% (loan-to-value) LTV. Mortgage rates are priced by your LTV, which go up in bands. The lower LTV band you are in, the lower your interest rate will typically be. Note that once you reach 60% LTV or below, the rates tend to stop going down.

Savers aged 18 to 39 could consider a Lifetime ISA (LISA) for building a house deposit. And, as LISAs were designed specifically with saving for a first house or retirement in mind, they make a natural home for a deposit. However, savers may want to consider that if they choose to withdraw from a LISA, they will face a penalty.

“If you are eligible, open a Lifetime ISA early, as it must have been open for at least 12 months before you can use it to buy your first home. Save what you can each month, up to the £4,000 annual limit, and the Government will add a 25% bonus, up to £1,000 a year,” said Springall. “If you contribute the maximum for three years, you could build a £15,000 pot, which includes £3,000 in bonuses,” she continued.

It should be noted that a new First Time Buyer ISA is confirmed to be replacing the LISA, with some speculating it will be launched in April 2028. LISAs can still be opened until these new accounts are rolled out. First Time Buyer ISAs are a new savings product aimed at helping people get onto the property ladder and will come in two forms, a Cash First Time Buyer ISA and a Stocks and Shares First Time Buyer ISA. Eligible deposits will continue to receive a tax-free bonus from the government (but will be paid when the holder is ready to buy their first home). Unlike a LISA, this won’t be a product to help save towards retirement and won’t have a withdrawal charge. To find out more, see our First Time Buyer ISA page.

Other ways to save

A more flexible option for saving up a deposit could be an easy access account, as these accounts typically allow you to take from, and contribute to, your funds without restriction or penalty. What’s more, if you are hit with an unexpected cost, you can still gain access your money when necessary, unlike with a LISA. Currently, (as at 22 September 2026) the leading easy access savings accounts pay up to 5.00% AER, while those who would prefer an easy access ISA will find the top rates reach 4.75% AER (including bonuses).

“Another option could be a notice account, but these have various restrictions or access limits so might not be suitable if you suddenly need your house deposit immediately,” Springall commented.

Alternatively, a regular saver can help to build up a savings habit as they impose monthly deposits with minimum and maximum requirements. They often come with some of the highest rates on the market, but if you don’t meet the set criteria, you may be met with a penalty.