If you’re thinking about buying a home in Manchester, one of the first steps is saving up for your mortgage deposit. This can be challenging, especially with the rising cost of living, but planning ahead and knowing your options can make a big difference.

Whether you’re a first time buyer in Manchester or saving again after a break from the market, here’s what you need to know.

How much deposit do you need?

Most mortgage lenders ask for a minimum deposit of 5% of the property’s value. So, if you’re looking at a £200,000 home in Manchester, you’d typically need at least £10,000 saved. If you’ve had credit issues in the past, you may need to aim closer to 10% or even 15%.

Saving a larger deposit can unlock better mortgage rates and reduce your monthly repayments. It also shows lenders that you’re financially responsible, which could make them more likely to accept your application.

Setting A Savings Goal That Works For You

To work out how much you can afford to save each month, start by reviewing your income and essential spending. Subscriptions, memberships, and regular outgoings can add up quickly, look for any you no longer use or could switch to cheaper alternatives.

Once you’ve worked out your monthly budget, decide how much of your leftover income you can realistically commit to saving. Setting up a standing order into a separate savings account can help you stay consistent.

Don’t Forget The Extra Costs

Your deposit isn’t the only cost to plan for. You’ll also need to cover other expenses, including:

  • Solicitor and conveyancing fees
  • Property valuation or survey costs
  • Potential arrangement fees from the lender
  • Moving costs and home insurance

Make sure to build a small buffer on top of your deposit savings, so you’re ready for these additional costs.

Can anyone help you with your deposit?

If you’re fortunate enough to have family support, a gifted deposit can be a great help. This is a cash gift from a parent, grandparent or close relative, and it must be non-repayable. Lenders will usually need a signed letter confirming it’s a gift, not a loan.

Buying a home with a partner or friend is another option. This means your deposit could go twice as far – but it’s important to understand the different ways you can legally own the property together.

Joint Tenants: You both own the full property equally. If one person passes away, the other automatically takes full ownership.

Tenants in Common: You each own a share of the property, which doesn’t have to be equal. You can pass on or sell your share independently if you choose to in future.

Government Schemes That Can Help

There are several schemes available that can help boost your deposit or reduce the amount you need to save.

  • Shared Ownership: Buy a portion of a home and pay rent on the rest.
  • Lifetime ISA (LISA): Save up to £4,000 per year and get a 25% government bonus.
  • First Homes Scheme: Buy a new build at a discount, if you qualify.
  • Mortgage Guarantee Scheme: Helps you buy with just 5% deposit.

Check the official Own Your Home website or speak to a mortgage advisor in Manchester to see what you may be eligible for.

What if you have bad credit?

If you’ve had missed payments or defaults in the past, your lender may ask for a higher deposit, often 10% to 15%.

You might also want to work on improving your credit score before applying. This can help reduce the deposit needed and open up more mortgage options. Here are some simple steps to help:

  • Register on the electoral roll at your current address
  • Pay all bills and debts on time
  • Avoid maxing out credit cards
  • Close unused credit accounts
  • Check your credit file for any errors and correct them

If you’re financially linked to someone with poor credit (such as an ex-partner), this could affect your application too. It’s worth checking your credit report and removing any outdated links.

Speak To a Mortgage Advisor in Manchester

Saving for a mortgage takes time, patience, and planning, but you don’t need to do it alone.

Our mortgage advisors in Manchester are here to help you make sense of the numbers and explore any schemes or deposit-boosting options that may be right for you. Whether you’re just getting started or ready to apply, we’re on hand to support you throughout the process.

You can book a free initial mortgage appointment online or speak to our team directly, we’re available 7 days a week, including evenings.

Date Last Edited: June 20, 2025