How to Get a Mortgage with a Small Deposit (5% Guide)

A 5% deposit (95% loan-to-value) mortgage is the lowest deposit most UK buyers can realistically secure. Rates are higher and lenders are stricter than at 10% LTV, but the route is open and many first-time buyers use it.

Who offers 5% deposit mortgages in 2024

Most major lenders participate in the Mortgage Guarantee Scheme, where the government guarantees the slice of the mortgage between 80% and 95% LTV — encouraging lenders to offer 95% products with confidence.

Active 95% LTV lenders include:

  • Barclays
  • HSBC
  • Halifax
  • Lloyds
  • Nationwide
  • NatWest
  • Santander
  • Skipton
  • Yorkshire Building Society
  • Coventry Building Society
  • Several specialist and regional building societies

Most of these are accessed through whole-of-market brokers like Habito, Mojo Mortgages, Trussle, L&C, and John Charcol.

What rates to expect at 95% LTV

In 2024 you can expect to pay roughly 0.7–1.0 percentage points more than the equivalent 75% LTV deal. Rough indicative ranges:

  • 75% LTV 5-year fix: ~4.4%
  • 90% LTV 5-year fix: ~4.85%
  • 95% LTV 5-year fix: ~5.20%

On a £200,000 home with a £10,000 deposit (95% LTV) at 5.20% over 30 years, monthly is around £1,042.

Compare to a £200,000 home with a £20,000 deposit (90% LTV) at 4.85%: monthly £1,055 (similar despite higher loan).

The benefit of a 10% deposit isn't usually a much lower monthly payment — it's a dramatically wider lender choice and lower total interest over 30 years.

Eligibility for 95% LTV products

Lenders are stricter at 95% LTV. Typical requirements:

  • Strong credit profile (Experian 800+ usually needed)
  • Stable income for at least 12–24 months
  • No recent missed payments or defaults
  • Property must meet the lender's standard criteria (no flats above commercial premises, no short leases under 80 years, no non-standard construction)
  • Some lenders cap loan size at £600,000 on 95% products
  • Some won't lend on new-build flats at 95% (Help to Buy hangover)

Self-employed, contract workers, and those with adverse credit will struggle at 95%. Save for 10% if you can.

Property restrictions

95% LTV products often exclude:

  • New-build flats (some lenders, due to historic price corrections post-completion)
  • Flats above commercial premises
  • Properties with cladding remediation issues
  • Non-standard construction (concrete, timber-frame, prefab)
  • Studio flats
  • Ex-local-authority properties (some lenders)

Your broker will know which lenders are flexible on which property types.

The 100% LTV exception

A small number of products allow 100% LTV (no deposit):

  • Skipton's Track Record Mortgage — for people who have been renting for 12+ months and can prove on-time rent payments. Strict criteria. No family backing required.
  • Family-assisted mortgages — Barclays Family Springboard, etc. — require a parent to deposit 10% as security for 5 years.
  • Guarantor mortgages — a parent or relative guarantees the mortgage. See Guarantor mortgages.

These products are niche and have higher rates. For most buyers, saving the 5% deposit remains the cheapest route.

How to maximise your chances at 95% LTV

Polish your credit

  • Check all three credit reports (Experian, Equifax, TransUnion)
  • Register on the electoral roll
  • Reduce credit utilisation under 30% of limits
  • Avoid new credit applications for 6 months
  • Use Experian Boost

Read What credit score do you need for a mortgage?.

Show stable income

  • Stay in your job for at least 6 months before applying (ideally 12+)
  • Avoid switching from PAYE to self-employed shortly before applying
  • Document any commission or bonuses with payslips

Choose the right property

  • Avoid the categories above that 95% lenders won't touch
  • Stick to standard houses or low-rise flats with no cladding issues
  • Make sure the property hasn't been on the market many times (lender will question)

Use a specialist broker

A whole-of-market broker can identify 95% lenders with appetite for your specific situation. Many work fee-free (paid by lender). See Mortgage broker vs going direct to a bank.

What about cash beyond the deposit?

Even a 5% deposit isn't the only upfront cost. On a £250,000 purchase:

  • Deposit: £12,500
  • Stamp duty (FTB): £0 (under £300k threshold from April 2025)
  • Conveyancing: £1,300
  • Survey: £400–£600
  • Mortgage arrangement fee: £0–£1,000 (often added to loan)
  • Removals + moving-in costs: £800–£2,000

You realistically need £15,000–£17,000 in cash for a 5% deposit on a £250k house.

The 5% vs 10% calculation

If you can stretch to 10%, you'll get materially better rates and access to far more lenders. Wait if:

  • You can save another £8,000–£15,000 within 12 months
  • House prices in your area are flat or falling
  • Your income or credit profile will improve

Buy at 5% if:

  • House prices are rising faster than you can save
  • You have a stable income and good credit
  • Renting is costing you more than the additional interest you'd pay

Get a free mortgage quote — see live 95% LTV deals from UK lenders.

Common 95% LTV pitfalls

  • Overestimating affordability. Higher rates squeeze your budget more than you expect.
  • Underestimating arrangement fees. £999–£1,495 fees on 95% products are common.
  • Choosing a 2-year fix at 95%. When you remortgage in 2 years, you'll have only paid down a tiny amount of capital — you may still be at 90%+ LTV.
  • Ignoring the property restrictions. Falling in love with a flat above a takeaway will end in lender rejection.

Frequently asked questions

Is the Mortgage Guarantee Scheme open to first-time buyers and movers? Both. It's not FTB-restricted.

Will the Mortgage Guarantee Scheme stay open? The scheme was made permanent in 2025 (rebranded the "Permanent Mortgage Guarantee Scheme"), so there's no expiry date.

Are 5% deposit mortgages just for first-time buyers? No — the lender market includes movers and remortgagors at 95% LTV.

Can I use a Lifetime ISA bonus toward a 5% deposit? Yes. The bonus is added to your savings as part of the deposit calculation. See Lifetime ISA guide.

Will I be in negative equity if prices fall? A 5% deposit means a 5% house price fall puts you at break-even. A 10% fall puts you in negative equity. This typically lasts a few years before recovering, but if you need to sell during that period, you'll bring cash to the table.

Can I overpay a 95% LTV mortgage? Yes — most lenders allow 10% per year penalty-free. This can drop your LTV faster than scheduled.

This article is for informational purposes only and does not constitute financial advice. Always consult a qualified mortgage adviser before making a decision.