When do you pay the deposit for a house?

When buying a property, the largest lump sum of money you pay will likely be your deposit (although stamp duty could be more in some cases). So, it makes sense that you’d like to know when you have to pay your deposit. To help, here is our guide to when you need to pay your house deposit and what else you might need to know.

A house deposit is a percentage of the property’s purchase price that you pay as security to commit you to buying the property. It’s essentially your stake in the transaction and forms part of your overall payment towards the house.

The key thing to understand is when you actually pay this deposit – as it might work a little differently to what you think.

You don’t pay your deposit when your offer is accepted, during the conveyancing process, or even when you get your mortgage approved. You pay what’s called an exchange deposit when you exchange contracts with the seller, which typically happens 7 to 28 days before completion.

It’s important to remember that your exchange deposit might be different from your mortgage deposit. While your mortgage deposit (what you’re putting down overall) might be 15%, 20%, or more of the property price, the exchange deposit is typically 10% but may be lower. This is paid on exchange when the purchase becomes legally binding.

The remainder of your deposit is then paid on completion day with the rest of the purchase price.

Understanding this timeline is crucial for managing your finances and ensuring you have the deposit funds available when they’re actually needed.

• Offer accepted: No deposit paid yet.
• Conveyancing begins: Still no deposit required.
• Just before exchange: You transfer your exchange deposit to your conveyancer.
• Exchange of contracts: Your conveyancer pays the exchange deposit to the seller’s conveyancer.
• Completion day: The remaining balance is paid, and you pick up your keys.