How much of a deposit do you need to buy a £500,000 property?

Trinity Financial has access to various lenders offering 5% and 10% deposit mortgages for borrowers purchasing £500,000 properties. The larger mortgage providers, including Halifax and Nationwide for Intermediaries, typically offer the most competitively priced rates. 

Aaron Strutt, product director at Trinity Financial, says: “It is possible to secure lower deposit mortgages to buy £500,000 properties, but it is subject to mortgage affordability and credit scores. There is much more choice in the mortgage market now, and lenders are developing schemes to lend more money while helping borrowers get onto the property ladder.

"To access the most competitively priced rates, borrowers typically need a 40% deposit for the lowest rates currently around 4.10%, but with a 5% deposit, mortgage through five-year fixes are priced just over 5%.”

Assessing your financial position

Before applying for a mortgage, you will need to understand your overall financial situation and how the lenders assess applications:

• Income requirements: Lenders typically offer four to six times your annual income for a mortgage. For a £450,000 mortgage, you’ll likely need a single or joint income of £82,000 to £112,500 annually (depending on other factors like debts and outgoings). Some building societies offer 5.5 times salary or six times salary mortgages to first-time buyers. 

• Credit Score: Ensure your credit score is excellent, as large mortgages often require top-tier creditworthiness. Before you apply for a mortgage, it is worth getting a copy of your credit report and ensuring there are no errors or potential issues. 

We are speaking to more people with credit blips, which means they struggle to get mortgages through high-street lenders. Some banks and building societies accept applications from borrowers when they can explain what happened or when they have more minor issues. 

• Affordability Assessment: Lenders evaluate your monthly expenses, including existing debts, household costs, and dependents. They typically want to see bank statements, payslips, tax returns, and company accounts if you are self-employed. 

The mortgage loan size will be reduced if you have credit cards, loans, cars on finance, or private school fees. 

Types of mortgages

For a £500,000 property purchase, consider the following mortgage options:

• Repayment mortgage: You repay both interest and capital monthly. This is best if you want to own the property at the end of the term. Many lenders allow up to 10% of the mortgage to be repaid each year without charge, and some lenders allow 20% overpayments.  

• Part interest-only mortgage: You pay part of the interest and part of the capital balance each month. This keeps monthly payments lower, although borrowers need to have a plan to repay the interest-only balance at the end of the term, as it will stay the same.

• Fixed-Rate Mortgage: Your interest rate is fixed for a set period (e.g., two, five, or 10 years). This type of mortgage is good for stability. Most borrowers opt for two—or five-year fixes, and the price difference between these rates has reduced in recent months. 

• Variable-Rate Mortgage: Interest rates fluctuate with the market and Bank of England base rate changes. Options include trackers (linked to the Bank of England base rate) or standard variable rates (SVRs). Some lenders offer variable rates without early repayment changes.

Additional Costs Beyond the mortgage itself, consider these costs:

• Stamp Duty: For a £500,000 property in England, Stamp Duty is around £12,500 (assuming it’s your primary residence). The amount of Stamp Duty you pay will vary depending on whether you are buying your first home, moving up the property ladder or buying a second property. Click here to use our Stamp Duty calculator. 

• Legal Fees: Solicitors typically charge £1,500–£3,000 for conveyancing. Many of Trinity's clients use SAS Daniels solicitors. 

• Valuation and Survey: Expect to pay £500–£2,000, depending on the survey type. Mortgage lenders often provide a free standard property valuation, which does not include a detailed survey. They often rely on their IT systems to value a property rather than sending a valuer to inspect it. If you want a thorough inspection, you need to appoint a firm. We have Alexander Lyons on our partners' page. 

Call Trinity Financial on 020 7016 0790 to secure a mortgage, book a consultation, or complete our mortgage questionnaire. 

The information contained within was correct at the time of publication but is subject to change.

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage