House deposit savings goal
Two questions in one place: how long it takes to save a deposit from a monthly amount plus interest, and how big a deposit you actually need for a house at a given loan-to-value.
How the timing is worked out
The calculator starts from what you have already saved, adds your monthly amount, and grows the balance by the interest rate each month until it reaches the target. Interest compounds, so it earns on the money you have added as well as the starting pot. For a short save the interest barely moves the date, but over several years it can remove months from the timescale. The monthly contribution is the lever that matters most, which is why raising it usually beats searching for a slightly better rate.
Worked example
Suppose you have £5,000 saved and add £500 a month at 4.0% interest, aiming for a £30,000 deposit. You reach the goal in about 3 years 9 months, and roughly £2,539 of the final pot is interest rather than your own contributions. For the house side, a £300,000 home at 90% LTV needs a £30,000 deposit against a £270,000 mortgage. Drop to an 85% LTV and the deposit rises, but the mortgage rate usually falls.
Common questions
How much deposit do I need to buy a house?
Most lenders want at least 5% to 10% of the price, and the best rates usually start at a 25% deposit. On a £300,000 home a 90% loan-to-value mortgage means a deposit of £30,000, leaving a £270,000 loan.
How long will it take to save my deposit?
That depends on how much you put away and the interest on your savings. Saving £500 a month from £5,000, with 4.0% interest, reaches £30,000 in about 3 years 9 months. Raising the monthly amount shortens it faster than seeking a higher rate.
Does the interest rate make much difference?
Over a short save, no. Over several years it starts to matter, because interest compounds on a growing balance. The bigger lever is nearly always the monthly contribution, so it is worth modelling both. A Lifetime ISA adds a 25% government bonus, which beats any ordinary savings rate.
What is loan-to-value?
Loan-to-value, or LTV, is the mortgage as a percentage of the property price. A 90% LTV means you borrow 90% and put down a 10% deposit. Lower LTVs unlock cheaper rates, so pushing from a 10% to a 15% deposit can cut the interest you pay for years.
Should I use a Lifetime ISA for my deposit?
If you are a first-time buyer aiming at a home under £450,000, a Lifetime ISA is usually worth it because the government adds 25% to what you pay in, up to £1,000 a year. The catch is a withdrawal penalty if you use the money for anything other than a first home or retirement, so check the rules first.