"For many aspiring homeowners, the biggest barrier isn’t always the reality of the deposit required - it’s what they believe that number needs to be."
- Rachel Geddes - Mortgage Advice Bureau
New research from Mortgage Advice Bureau (MAB) has revealed that millions of aspiring homeowners could be delaying their plans unnecessarily, as many significantly overestimate how much deposit they need to get on the property ladder.
The findings expose a major 'deposit myth' among first-time buyers, suggesting misconceptions around upfront costs may be holding back just as many buyers as financial barriers themselves.
According to the research, 73% are unaware of 95% loan-to-value (LTV) mortgages, which require just a 5% deposit, while 80% are unaware of 'track record' mortgages, which can help renters get a mortgage by proving they’ve kept up with rental payments, and 70% are unaware of the full range of family-assisted mortgage options.
This suggests many prospective buyers may be ruling themselves out of a property purchase before fully understanding what’s available.
While saving for a deposit is widely seen as a key hurdle, perceptions don’t always match reality. 27% say their deposit is the biggest dealbreaker, 39% believe a deposit of 10% or more is required, and only 50% correctly identify 5% as the typical minimum deposit amount.
The research also shows that many buyers are unaware that they can get onto the property ladder with family support, without needing a large cash deposit upfront. 52% say they would consider a parent or family member boosting their borrowing power, but 29% didn’t realise this was even an option.
This suggests some aspiring homeowners may be overlooking viable routes to buying, based on the assumption that financial help must come in the form of cash savings.
For many, the challenge goes beyond deposits. A lack of understanding around the homebuying process continues to delay decisions, with 31% saying they don’t know how to get started.
This broader uncertainty around the steps involved, the options available, and where to begin may be preventing some buyers from taking the next step altogether.
Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, said: "For many aspiring homeowners, the biggest barrier isn’t always the reality of the deposit required - it’s what they believe that number needs to be.
"What this research shows is that a large proportion of buyers are making decisions based on assumptions, particularly around how much they need to save before they can even consider buying.
"With a wide range of low-deposit and alternative mortgage options now available, understanding the different routes to homeownership is crucial. Speaking to an expert mortgage adviser can help prospective buyers cut through the noise, understand what’s actually required, and take the next step with confidence."
David Morris, head of homes, Santander UK, added: "With so many misconceptions about what it takes to buy a home, many first-time buyers could be missing out on their chance to get on the housing ladder by not talking to an expert.
"Brokers are specialists in helping their clients see beyond the widely reported affordability struggles, instead looking at their individual circumstances to see what’s possible and using their knowledge to find the most appropriate options in the market.
"With many lower deposit mortgage solutions coming to the market, many first-time buyers could find that they’re closer than they think to get the mortgage they want and to being able to make their homeownership dreams a reality."
