Getting a Mortgage with a 5% Deposit

illustration of Getting a Mortgage with a 5% Deposit

What is the 5% deposit mortgage scheme?

The 5% mortgage scheme - also known as the Mortgage Guarantee Scheme - is a new government-backed scheme, allowing first time buyers, home movers and previous homeowners to get a 95% loan-to-value (LTV) mortgage. 

Under the scheme, you can apply for a mortgage with only 5% deposit. And unlike the Help to Buy scheme, you don’t have to be a first time buyer or buying a new-build home to qualify. 

95% mortgages had previously disappeared from the market, leaving lots of potential homeowners stuck paying high rents. The idea behind the scheme is to encourage mortgage lenders to bring these more accessible mortgages back to the market. 

The 95% mortgages will work just the same as any other mortgage - the experience won’t be any different for you as a buyer. 

The difference happens on the lender’s side. The scheme guarantees that the government will take on some of the cost if the lender loses money after giving you a mortgage. E.g. if you were repossessed or your home decreased in value. 

When does the Mortgage Guarantee Scheme end?

The scheme is due to run until December 2022. 

What’s the difference between the 5% deposit scheme and Help to Buy?

They’re similar in that you only have to put down a 5% deposit. But while Help to Buy is only available to first time buyers and only for new-build homes, the 5% deposit is available to all, and is valid on pre-existing homes (good news for lovers of quirky or older homes!).

The Help to Buy scheme includes an equity loan, which you’ll eventually have to pay back. With the new scheme, the government helps your mortgage lender with the loan. Any lender taking part in the scheme will need to offer a five-year fixed interest deal for their 95% mortgages. 

Read more in our Guide: Help to Buy Explained

Am I eligible for the 5% deposit mortgage scheme?

Probably! The scheme is open to anyone with a 5% deposit. Unlike Help to Buy, you DON’T have to be a first time buyer to get one. But the property you buy will need to be your main home. 

Here’s the criteria:

  • The property you buy needs to be a main residential home in the UK. You won’t be able to get a 5% deposit mortgage for second homes or Buy to Let properties.

  • The property must be worth £600,000 or less.

  • Your LTV can’t be more than 95%.

  • The mortgage needs to be on a repayment basis. You won’t be able to get an interest-only mortgage.

  • As with any other mortgage, you’ll need to pass the lender’s affordability checks. You can read more about what lenders look for in mortgage applicants in our Guide

Think it could be a good fit? It’s a good idea to work with a mortgage broker - someone who knows the market inside out, and can find the right deal for you. Make an enquiry to chat with one of our experts.

Are 5% deposit mortgages a good idea?

They’re a great way to make home-buying accessible for more people. There’s nothing massively different about the new 5% mortgages - for you, they’ll work just the same as if you had a bigger deposit. It can be a great option if you’re struggling to get on the property ladder. 

Generally, the lower your deposit, the higher your interest rate. So it’s worth looking around at your options.

Whether a 5% deposit mortgage is right for you will depend on your individual circumstances. Lenders want to know you can afford to make your mortgage repayments without struggling, so if you have a low income, history of bad credit, or complex earnings then you might find things more difficult. But it’s not impossible! That’s where we come in. 

We work with specialist mortgage brokers who only deal with the complex stuff. If you’re looking to take advantage of the new scheme, but are worried about your options, make an enquiry to get matched to one of our friendly advisors. 

Which lenders are offering 5% deposit mortgages?

The good news is, lots of lenders have already signed up to the Mortgage Guarantee Scheme. Currently. the following lenders are offering 95% LTV mortgages:

  • Lloyds

  • Natwest

  • Santander

  • Barclays

  • HSBC

  • Virgin Money

It’s likely that more lenders will follow. Make an enquiry to find out your options.


Our Mortgage Experts are fully-qualified with experience in bad credit, self-employed and complex mortgages. They have a proven track record of getting mortgages for people who’ve been rejected elsewhere.

useful links

Our guides

Applying for a mortgage or understanding your options shouldn't be confusing, yet there are just so many myths doing the rounds and it's not easy to know where to turn to get the right advice.

Our Calculators

Our calculators give you an idea of what you might be able to borrow, what's affordable and a rough estimate of the kind of property prices you can start to look at.

Haven't we met before?