When it comes to getting on the property ladder, the deposit can often be a major hurdle. Rising house prices mean that homebuyers these days often have the perception that they need to put down up to tens of thousands of pounds as a deposit, which can be next to impossible if you don’t have a high paying job, a chunk of savings, inheritance or family to help out. 

So, if your deposit is the only thing standing in the way of you and your dream home, the PropertyPal Mortgages guide to deposits will help you break down the obstacles and put you on the path towards home ownership.

Deposits explained

A deposit is the sum of money you need to put down, that goes towards the cost of the property you’re purchasing. 

The deposit usually proves to banks and lenders that you’re financially responsible, sensible with your money and disciplined. This all makes you less of a risk to the lender. 

What is LTV?

‘Loan To Value’ or LTV is often thrown around when talking about deposits. This is simply the percentage of the home you own outright, compared to the percentage you’re borrowing. 

For example: If you’re buying a home that costs £100,000 and you have a 10% deposit of £10,000 then your LTV is 90%. 

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Last modified: 11/08/2021