House deposit savings goal
Saving £500 a month at 4.0% interest reaches a £30,000 deposit in about 3 years 9 months. A £300,000 home at 90% loan-to-value needs a £30,000 deposit against a £270,000 mortgage. A first-time buyer can add a government bonus through a Lifetime ISA, set out on gov.uk.
How is a deposit savings timeline worked out?
The calculation starts from the amount already saved. The monthly contribution is added each month. The running balance is then grown by the interest rate for that month. Interest compounds, so it earns on the contributions added as well as on the starting amount. For a short save the interest barely moves the date. 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.
What does a worked example look like?
Starting from £5,000 saved and adding £500 a month at 4.0% interest, aiming for a £30,000 deposit, the goal is reached in about 3 years 9 months. Roughly £2,539 of the final pot is interest rather than contributions. For the house side, a £300,000 home at 90% LTV needs a £30,000 deposit against a £270,000 mortgage. Dropping to an 85% LTV raises the deposit needed, though the mortgage rate offered 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.
How is a deposit savings timeline worked out?
The calculation starts from the amount already saved and adds the monthly contribution each month. The running balance is then grown by the interest rate for that month, compounding on both the contributions and the starting amount. This continues until the balance reaches the target, at which point the number of months is converted into years and months. A higher monthly contribution shortens the timeline by more than a higher interest rate does, on most realistic savings horizons.
What does a worked example look like?
Starting from an initial amount and adding a fixed sum each month at a set interest rate produces a projected date for reaching the deposit target, together with the portion of the final balance that came from interest rather than contributions. The same tool separately works out the deposit needed for a given house price and loan-to-value, and the resulting mortgage amount. Both figures update as soon as any input changes.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.