1. What is an Earnest Money Deposit?

In the UK property market, an earnest money deposit (typically 5-10% of the purchase price) shows the buyer's serious intent to purchase. It's paid when offers are accepted and contracts are exchanged.

2. How Deposit Calculation Works

The calculator uses this simple formula:

Where:

• Property Price — The agreed purchase price of the property
• Percentage — Typically between 5% to 10% in the UK

Explanation: The deposit amount varies based on property value and local market customs, with 10% being most common in England and Wales.

3. Importance of Deposit in UK Property

Details: The deposit secures the property transaction, demonstrates buyer commitment, and forms part of the overall purchase price. It's protected until completion.

4. Using the Calculator

Tips: Enter the property price in GBP and your desired deposit percentage (between 5-10%). The calculator will show the exact deposit amount required.

5. Frequently Asked Questions (FAQ)

Q1: Is the deposit refundable?
A: Generally no, unless specific contract conditions aren't met by the seller. The deposit is at risk if the buyer withdraws without valid reason.

Q2: When is the deposit paid?
A: In England/Wales, typically when contracts are exchanged (not at offer acceptance). In Scotland, a smaller deposit is paid earlier.

Q3: Can I pay less than 5% deposit?
A: Rarely. Most sellers expect 5-10%. Some new-build schemes may accept lower deposits with incentives.

Q4: Where is the deposit held?
A: By the seller's solicitor/conveyancer in a protected client account until completion.

Q5: What happens to the deposit if sale completes?
A: It forms part of your payment towards the property purchase price.