Mortgage question
How much deposit do I need for a £500,000 house in the UK?
A £500,000 UK purchase in 2026 realistically needs £50,000 (10%) as a floor — most 95% LTV products cap at a £500k loan or £600k price — while £100,000 (20%) or £125,000 (25%) unlocks the sharpest sub-4.6% five-year fixes; SDLT at £500k is £12,500 for a standard buyer and £10,000 with first-time buyer relief.
Why doesn’t 5% really work at £500k?
Above about £500,000, the 95% LTV market thins out fast. Freedom to Buy and most lender-specific 95% ranges cap at either a £500,000 loan or a £600,000 purchase price — so a £475,000 loan on a £500,000 buy is technically possible, but only with a handful of lenders, tighter affordability, and rates around 5.65%. The 10% tier is where choice opens up properly: every high-street name competes at 90% LTV, and pricing on a 5-year fix sits near 5.20% in April 2026.
| Deposit | LTV | Typical 5-yr fix | Monthly (30-yr repayment) |
|---|---|---|---|
| £50,000 (10%) | 90% | ~5.20% | ~£2,472 |
| £75,000 (15%) | 85% | ~5.15% | ~£2,315 |
| £100,000 (20%) | 80% | ~4.75% | ~£2,086 |
| £125,000 (25%) | 75% | ~4.55% | ~£1,929 |
What income do I actually need?
At £500,000 with a 10% deposit, you’re borrowing £450,000. At the standard 4.5× income multiple, that’s a household gross of £100,000. Halifax and Nationwide stretch to 4.75× for higher earners, dropping the threshold to around £95,000. Nationwide’s Helping Hand product reaches 5.5× for first-time buyers earning £35k+ solo or £55k+ joint, which can bring the required income closer to £82,000 — though LTV is capped at 95%, not the same as the cheapest 90% deals.
Run the real numbers with our affordability calculator — it factors in credit commitments, dependants, and the FCA’s revised stress test (reversion rate + 1pp, eased from +3pp in 2025).
How does stamp duty land at £500,000?
Standard SDLT on a £500,000 home is £12,500: £0 on the first £125k, 2% (£2,500) on the £125k–£250k slice, and 5% (£10,000) on the £250k–£500k slice. First-time buyers still get some relief: 0% to £300k and 5% on the £200k above, for £10,000 total. Push a penny above £500k and FTB relief vanishes entirely, so if you’re near the cliff edge it’s often worth negotiating down to exactly £500,000 — the £2,500 saving is real money.
Additional-property buyers pay the 5% surcharge on top (raised from 3% on 31 October 2024), taking the bill on £500k to £37,500. Our stamp duty calculator handles all these edge cases.
Can I still use a Lifetime ISA on a £500k buy?
No. The Lifetime ISA property cap is £450,000 and hasn’t moved since 2017. If you complete on a £500,000 home, any LISA funds used face the 25% unauthorised withdrawal penalty — which clawbacks the government bonus plus about 6.25% of your own money. Practical workaround: pull LISA funds out via a £449,999 purchase, or keep the LISA for retirement and use non-LISA savings for the deposit. If you’re near the cap, a down-valuation to £450,000 or less at exchange still qualifies; the cap is measured at completion price.
The one thing most buyers miss
“Cash to close” on a £500k purchase isn’t just deposit plus stamp duty. Budget another £3,000–£4,500 for legal fees on a purchase this size (higher SDLT means higher insured solicitor fees), £600–£900 for a Level 2 or Level 3 RICS survey, and a lender arrangement fee of £0–£1,500. All-in, a non-FTB with a 10% deposit needs roughly £67,000 liquid on completion day, not £50,000. Keep a buffer — down-valuations on £500k homes are more common than on £250k ones.
This is information, not regulated advice. For product-specific figures, speak to a whole-of-market broker.
Sources
Information, not regulated advice. Mortgage Notes is not an FCA-authorised mortgage adviser. For a recommendation on your specific circumstances, speak to an FCA-authorised broker.