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The 20 percent threshold is about insurance, not qualification

You can usually buy with far less than 20 percent. What 20 percent buys is the removal of mortgage insurance, which protects the lender rather than you and can add a meaningful monthly cost for years. Below that threshold the loan is still available; it simply costs more every month until the loan-to-value ratio falls enough to cancel it.

Loan-to-value drives the interest rate too

Lenders price in bands, and the bands matter more than the exact figure. Moving from 90 percent LTV to 85 percent can drop the rate a visible step, while moving from 87 to 86 usually changes nothing. Finding the nearest band boundary is worth doing before deciding how much more to save — a few thousand can be worth far more than its face value if it crosses a threshold, and worth almost nothing if it does not.

The deposit is not the cash you need

Closing costs typically add 2 to 5 percent of the purchase price: legal fees, survey, land transfer tax, lender fees and prepaid insurance. Add moving costs and the repairs discovered in the first month. Arriving at completion with exactly the deposit and nothing else is the most common cash-flow mistake in a first purchase.

Bigger is not automatically better

Money in a deposit is money not in an emergency fund, not in a retirement account capturing an employer match, and not available if the boiler fails. Where the mortgage rate is below what the money would reliably earn elsewhere, a larger deposit can be the worse decision — though it is guaranteed, which the alternative is not.

Gifted deposits have rules

Lenders generally accept gifts from close family but require a letter confirming the money is a gift rather than a loan, and they will trace the funds. Money that appeared recently with no explanation delays or blocks approval, which is why the standard advice is to have the deposit sitting in your account, documented, for several months before applying.

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