Can I Get a Mortgage with a 5% Deposit?

If you’re wondering “Can I get a mortgage with a 5% deposit?”, the short answer is yes, you can. But as with most things in life, there’s a bit more to it than that.

Getting on the property ladder in the UK can feel like a mountain to climb, especially with rising house prices and the cost of living pulling in all directions. But the good news is that it is possible to buy a home with just a 5% deposit, thanks to a few specific mortgage products and support schemes that are still available.

Let’s break it all down.

What is a 5% Deposit Mortgage?

A 5% deposit mortgage means you’ll need to put down just 5% of the property’s value upfront. The rest — the remaining 95% — is borrowed from a mortgage lender.

So, if the house you’re eyeing up costs £200,000, you’ll need to save £10,000 for the deposit. The remaining £190,000 would be covered by the mortgage.

These are also called 95% loan-to-value (LTV) mortgages, because the loan covers 95% of the home’s value.

Are 5% Deposit Mortgages Still Available in 2025?

Yes — but they’re not as common as mortgages with bigger deposits. Lenders are understandably cautious when lending a high percentage of the property’s value. That’s because with a smaller deposit, there’s more risk involved for them.

That said, some lenders still offer 95% mortgages, especially for first-time buyers. You might have access to more deals if you have a solid credit history, a steady income, and low debt.

The Mortgage Guarantee Scheme (Still Running in 2025)

To help more people buy with a small deposit, the government launched the Mortgage Guarantee Scheme. Originally planned to end earlier, it’s been extended into 2025.

Under this scheme, the government guarantees a portion of your mortgage, which reduces the risk for the lender. In turn, this helps more banks and building societies offer 95% LTV mortgages again.

It’s open to first-time buyers and existing homeowners looking to buy a property up to £600,000 — as long as it’s not a buy-to-let or second home.

Pros of Buying with a 5% Deposit

• Get on the ladder sooner: You won’t have to save for years and years before buying.
• Access to homeownership: It’s a realistic route for those with smaller savings but steady earnings.
• Take advantage of current schemes: Government support might not be around forever.

Things to Consider Before Applying

Although it’s possible, buying with a small deposit does come with some trade-offs:

• Higher interest rates: Lenders often charge more for 95% mortgages because of the added risk.
• Smaller choice of lenders: Fewer mortgage deals to choose from compared to larger deposits.
• Affordability checks: Lenders will go through your income, spending habits, and credit history with a fine-tooth comb.

How to Improve Your Chances

If you want to get a 5% deposit mortgage, here are a few tips to help you stand out to lenders:

Use a mortgage broker: They’ll know which lenders are most likely to say yes.

Keep your credit record clean: Pay off any debts and avoid missed payments.

Reduce spending in the months before you apply: Lenders will check your bank statements.

Get a mortgage in principle first: It shows estate agents you’re a serious buyer.

Are There Alternatives?

If you’re struggling to get approved, or want to increase your options, consider these:

• Save a 10% deposit instead: It opens up better rates and more deals.
• Look into shared ownership: You buy a share of a property and pay rent on the rest.
• Explore Help to Buy alternatives: Some housing associations still run their own schemes.

FAQs

Continue Reading