Low Deposit Mortgages
Struggling to save a large deposit? You might be closer to owning your dream home than you think. Explore your options for buying with just a 5% deposit.
Getting on the Ladder with Less
Saving for a deposit is often the biggest hurdle for first-time buyers. The good news is that you don't necessarily need a 10% or 20% deposit to buy a home. There are several schemes and mortgage products designed to help you buy with a smaller upfront amount - typically around 5%.
While a smaller deposit means you'll need to borrow more and might face slightly higher interest rates, it can allow you to stop renting and start building equity in your own home much sooner.
Your Low-Deposit Options
95% LTV Mortgages
A standard 95% Loan-to-Value (LTV) mortgage allows you to buy a property with just a 5% deposit. Many high-street lenders offer these products, backed by the government's Mortgage Guarantee Scheme.
- Available on existing and new build homes
- Requires a good credit score
Guarantor Mortgages
If you have family members willing to help, a guarantor mortgage (or Joint Borrower Sole Proprietor) uses their income or property as security, allowing you to borrow more or buy with zero deposit in some cases.
- Can boost your borrowing capacity
- Protects parents from additional stamp duty
Shared Ownership
Buy a share of a property (usually between 25% and 75%) and pay rent on the remaining share. You only need a deposit for the share you are buying, making it highly accessible.
- Significantly lower deposit required
- Option to buy more shares later (staircasing)
Deposit Unlock
A scheme developed by the housebuilding industry that enables you to buy a new build home with just a 5% deposit, offering an alternative to the now-closed Help to Buy equity loan.
- Specifically for new build properties
- Available to both first-time buyers and home movers
Things to Consider Before Applying
Higher Interest Rates
Because a 95% mortgage carries more risk for the lender, the interest rates are typically higher than if you had a 10% or 15% deposit. It's important to ensure the monthly repayments are comfortably affordable.
Risk of Negative Equity
With a small deposit, you have less equity in the property. If house prices fall, you could end up owing more than the property is worth (negative equity), which can make moving home difficult.
Stricter Affordability Checks
Lenders will scrutinise your finances closely. They want to be absolutely sure you can afford the repayments, even if interest rates rise in the future. Having a clean credit history is crucial.
Frequently Asked Questions
Ready to explore your options?
Our expert advisors can assess your circumstances, explain all the schemes available to you, and find the most competitive low-deposit mortgage for your needs.
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