The short answer
There is no single deposit that every Scottish buyer needs. A lender may offer a product at a particular maximum loan-to-value (LTV), but approval depends on affordability, credit, property, valuation and lender criteria. Calculate the mortgage from the lender’s accepted value, then budget separately for your own cash contribution, any offer-to-valuation gap, purchase costs and an emergency reserve.
Deposit, LTV and valuation: the three numbers
- Deposit: your money (and any permitted contribution) used towards the purchase price rather than borrowed.
- Mortgage: the amount borrowed.
- LTV: mortgage ÷ the lender’s accepted property value × 100. A 95% LTV mortgage is not a promise that a lender will offer 95% on every property.
An agreed offer and a lender’s valuation answer different questions. If you offer £250,000 but the accepted valuation is £245,000, a 95% LTV maximum would be £232,750 (95% × £245,000). The £17,250 difference between the mortgage and the offer price is your base cash contribution, of which £5,000 is the valuation gap. A lender may use its own valuation method and criteria; ask the lender or broker what value and LTV it is using.
Worked cash-buffer examples
These are labelled illustrations, not quotes, approvals or predictions. Purchase-cost and reserve figures are placeholders to replace with your solicitor, lender, insurer and personal budget figures. Arithmetic is shown so it can be checked independently.
| Item | Example A: valuation below offer | Example B: valuation matches offer |
|---|---|---|
| Offer price | £250,000 | £300,000 |
| Accepted valuation | £245,000 | £300,000 |
| Maximum LTV used in illustration | 95% | 90% |
| Mortgage (valuation × LTV) | £232,750 | £270,000 |
| Base deposit (offer − mortgage) | £17,250 | £30,000 |
| Valuation gap (offer − valuation) | £5,000 | £0 |
| Purchase costs placeholder | £8,000 | £10,000 |
| Cash reserve placeholder | £5,000 | £8,000 |
| Illustrative cash to have available | £30,250 | £48,000 |
Checks: Example A: £245,000 × 0.95 = £232,750; £250,000 − £232,750 = £17,250; £17,250 + £8,000 + £5,000 = £30,250. Example B: £300,000 × 0.90 = £270,000; £300,000 − £270,000 = £30,000; £30,000 + £10,000 + £8,000 = £48,000. If the lender will lend less, or a cost is higher, the required cash rises. Do not assume the reserve can be used as the deposit.
Is 5% enough?
Some products may be available at 95% LTV, but 5% is not a universal minimum, entitlement or affordability test. A higher contribution can reduce the mortgage and may place a buyer in a different product or pricing band, but rates, fees and availability are lender- and applicant-dependent. Compare total cost, not a promised rate or an old article’s example.
Do not describe 100% LTV, guarantor, new-build or scheme arrangements as generally available. They are separate products with their own eligibility and risks. A mortgage adviser or lender must confirm the current position for the buyer and property.
When the valuation is below the offer
Ask for the lender’s written position before assuming the mortgage can proceed. Options may include renegotiating the price, increasing your cash contribution, changing the product or withdrawing subject to the transaction terms. A lender may not simply lend the same percentage of the offer price. Do not borrow an unexplained shortfall or use a reserve without understanding affordability and future resilience.
What can count as deposit money?
Tell the lender and solicitor where every part of the deposit comes from. Savings may be held across accounts, but statements and transaction history can be requested. A gift must be disclosed and accepted under the particular lender’s policy; it may require a gifted-deposit declaration, donor identity/evidence, confirmation that it is not repayable and no interest in the property. Some lenders restrict who may gift, how funds are transferred or which property/occupancy arrangements are acceptable. Never state that all lenders accept gifted deposits on identical terms.
A loan presented as a gift is not a gift. Undisclosed borrowing or an undisclosed repayment obligation can affect affordability and the mortgage decision. Keep a clear audit trail and ask the conveyancer what source-of-funds evidence is required under their legal and anti-money-laundering checks. The Law Society of Scotland guidance on source of funds is professional guidance; it does not set a universal lender policy.
Savings products and schemes
The GOV.UK Lifetime ISA guidance describes a 25% bonus, subject to eligibility, a £4,000 annual payment limit and first-home conditions. The property price cap, 12-month rule, main-residence, mortgage, conveyancer and withdrawal conditions matter. Treat a bonus as available only after the provider and conveyancer confirm the timetable.
The GOV.UK Help to Buy ISA guidance says no new accounts can be opened. Existing holders can pay in until November 2029 and must claim the bonus by November 2030; recheck these dates before relying on them. It is not interchangeable with a LISA, and one person cannot claim both Government bonuses for the same purchase; partners’ positions can differ. Confirm the claim with the provider and conveyancer.
Scottish shared-equity schemes and LBTT relief are not automatically deposit cash. Read the current official scheme or Revenue Scotland residential property guidance, and ask the administrator or solicitor about eligibility, valuation, timing, security and repayment.
Budget beyond the deposit
Set aside a written estimate for solicitor and registration charges, tax where applicable, mortgage or lender fees, valuation/survey costs, insurance, moving costs and any property-specific work. These are not one universal total. Read first-time buyer support in Scotland, home reports, valuations and offers in Scotland, and the costs of buying a home in Scotland for the related decisions. These related guides are intended to be read together when planning a purchase.
Keep a cash reserve after completion for an income interruption, repairs, furnishing, service/common charges and routine bills. There is no universal reserve amount: use a figure you can justify from your budget, commitments and advice. Do not count money that is committed to the purchase twice.
Affordability is separate from the deposit
MoneyHelper’s mortgage affordability guidance is a budgeting starting point, not a lender decision. A larger deposit does not make an unaffordable monthly payment affordable. Include rates, term, fees, income changes, childcare, debts, insurance, council tax and property running costs, then read how much can I borrow? and ask a lender or adviser to assess the current application.
When you are ready to discuss the borrowing, see first-time-buyer mortgage advice or discuss your mortgage options. These services do not decide legal, tax, survey or scheme questions.
Deposit checklist
- Record the offer price and the lender’s accepted valuation separately.
- Confirm the proposed LTV and calculate mortgage = accepted value × LTV.
- Calculate offer price − mortgage; identify any valuation gap inside that figure.
- List purchase costs as separate estimates, not part of the deposit.
- Add a cash reserve and check what remains after completion.
- Gather statements, savings history and evidence for every contributor.
- Tell the lender and solicitor about gifts, loans, ISA withdrawals and scheme funds before relying on them.
- Ask what happens if the valuation, product or source-of-funds review changes.
- Recheck product, scheme and tax rules on the date of application.