Buying a home in the UK can feel difficult when you do not have a large deposit. The good news is that you may not need to save 10%, 15%, or 20% of the property’s value. A mortgage with 5% deposit UK buyers can access can allow you to borrow up to 95% of a property’s purchase price.
For example, if you want to buy a £200,000 property, a 5% deposit would be £10,000. You would then need a £190,000 mortgage.
The UK Government’s permanent Mortgage Guarantee Scheme supports the availability of 91% to 95% loan-to-value mortgages, making 5% deposit mortgages an important option for eligible first-time buyers and home movers.
What Is a Mortgage With 5% Deposit UK Buyers Can Get?
A mortgage with 5% deposit UK buyers use is normally a 95% loan-to-value mortgage, commonly called a 95% LTV mortgage.
Your deposit covers 5% of the property’s purchase price while the mortgage covers the remaining 95%.
For example:
| Property price | 5% deposit | Mortgage required |
|---|---|---|
| £150,000 | £7,500 | £142,500 |
| £200,000 | £10,000 | £190,000 |
| £250,000 | £12,500 | £237,500 |
| £300,000 | £15,000 | £285,000 |
| £400,000 | £20,000 | £380,000 |
| £500,000 | £25,000 | £475,000 |
MoneyHelper says buyers will usually need a deposit of at least 5% to 10%, although low-deposit mortgages can come with higher interest rates and greater risks such as negative equity.
Can You Really Buy a House With Only a 5% Deposit?
Yes. A 5% deposit mortgage is a genuine option in the UK, although approval is not automatic.
The lender will still assess your income, credit history, existing debts, employment situation, expenses and affordability.
Having £10,000 saved does not automatically mean you can borrow £190,000 for a £200,000 property.
The lender needs to be satisfied that you can afford the monthly mortgage payments.
The government’s current Mortgage Guarantee Scheme is designed to support the availability of 91% to 95% LTV mortgages. It is available for eligible first-time buyers and home movers buying a home in the UK.
How Does a 5% Deposit Mortgage Work?
The basic process is straightforward.
Suppose you find a house worth £250,000.
You provide a £12,500 deposit, which represents 5% of the purchase price.
The mortgage lender provides the remaining £237,500.
Your mortgage would therefore have a 95% LTV.
The government guarantee does not mean the government pays your deposit or makes your mortgage payments. Instead, under the Mortgage Guarantee Scheme, the government provides participating lenders with a guarantee against part of certain losses on eligible mortgages.
You remain responsible for repaying the full mortgage according to your mortgage agreement.
Who Can Get a Mortgage With 5% Deposit in the UK?
Eligibility depends on the lender and the mortgage product.
You may have a better chance if you have:
- A stable income
- A good credit history
- Manageable debts
- Evidence of regular income
- A consistent employment record
- Enough income to afford the proposed monthly repayments
- A genuine 5% deposit
- A property that meets the lender’s criteria
First-time buyers can be particularly interested in 5% deposit mortgages because saving a large deposit can take many years.
You do not necessarily have to be a first-time buyer, though. The current government Mortgage Guarantee Scheme also supports eligible home movers.
How Much Can You Borrow With a 5% Deposit?
The amount you can borrow depends on your circumstances rather than simply the amount of your deposit.
For example, having a £15,000 deposit could theoretically support a £300,000 purchase at 95% LTV.
But the lender may decide that your income does not support a £285,000 mortgage.
This is why affordability matters as much as your deposit.
Lenders look at your income and financial commitments when deciding how much they are prepared to lend. MoneyHelper notes that applicants can be rejected if their income is not sufficient to support the requested mortgage.
What Income Do You Need for a 5% Deposit Mortgage?
There is no single income figure that guarantees approval.
Two people earning the same salary can receive different mortgage offers because lenders also consider debts, household spending, dependants, credit commitments and other financial circumstances.
For example, someone earning £50,000 with significant monthly debts may have less borrowing capacity than someone earning £50,000 with few financial commitments.
This is why getting an agreement in principle can be useful before making an offer on a property.
Is a 5% Deposit Mortgage More Expensive?
It can be.
A 5% deposit means the lender is financing 95% of the property’s value. This gives you less equity in the property than someone putting down a 10%, 15% or 20% deposit.
Low-deposit mortgages can therefore have higher interest rates than some mortgages available to borrowers with larger deposits. MoneyHelper specifically warns that borrowers with small deposits may pay more because of higher interest rates.
Consider two buyers purchasing the same £250,000 home.
Buyer A puts down £12,500.
Buyer B puts down £25,000.
Buyer A needs a £237,500 mortgage.
Buyer B needs a £225,000 mortgage.
The second buyer has borrowed less and has a lower LTV, which can open up different mortgage pricing.
This does not mean a 5% deposit mortgage is always a bad choice. It means you should compare the total cost rather than focusing only on the initial deposit.
5% Deposit Mortgage vs 10% Deposit Mortgage
The biggest difference is the amount you need to save.
With a £250,000 property:
A 5% deposit is £12,500.
A 10% deposit is £25,000.
The 5% option allows you to buy sooner if you cannot afford to wait until you have £25,000.
The 10% option means you borrow less and may qualify for mortgages with more competitive rates.
The right choice depends on your finances, the available mortgage deals and whether waiting to build a larger deposit makes financial sense.
Government Mortgage Guarantee Scheme
The UK Government introduced a permanent Mortgage Guarantee Scheme in July 2025 to help maintain the availability of 91% to 95% LTV mortgages. It is designed to help eligible first-time buyers and home movers purchase a property with a deposit as small as 5%.
The scheme does not mean every applicant automatically receives a 95% mortgage.
Instead, participating lenders can use the government-backed guarantee on eligible mortgages.
The current scheme rules specify eligible loans with an LTV above 90% and up to 95%.
Can First-Time Buyers Get a 5% Deposit Mortgage?
Yes.
First-time buyers are one of the main groups who may benefit from low-deposit mortgages.
If you have a good income but have struggled to save a large deposit, a 5% deposit mortgage could help you enter the property market sooner.
For example, saving £10,000 is significantly easier for some households than saving £30,000 or £40,000.
You still need to satisfy the lender’s affordability and credit requirements.
Can You Use a Lifetime ISA for a 5% Deposit?
A Lifetime ISA can be used to help save for a first home, subject to its rules.
MoneyHelper notes that Lifetime ISAs remain available for saving towards a first home, while Help to Buy ISAs are no longer available to open.
If you qualify, the government bonus can increase the amount available towards your first-home purchase.
Before withdrawing money from a Lifetime ISA, make sure the withdrawal qualifies under the scheme rules.
What Other Costs Do You Need Besides the 5% Deposit?
One common mistake is to save exactly 5% and assume that is all the money needed to buy a house.
You may also need money for:
- Solicitor or conveyancing costs
- Mortgage fees
- Property survey
- Valuation costs
- Moving expenses
- Buildings insurance
- Land Registry-related costs
- Stamp Duty Land Tax where applicable
- Furniture and immediate repairs
The exact costs vary depending on your purchase and circumstances.
You should therefore aim to have some savings left after paying your deposit.
What If You Have Bad Credit?
Getting a mortgage with 5% deposit UK borrowers can qualify for may be more difficult if you have a poor credit history.
A lender may look at missed payments, defaults, County Court Judgments and other information when assessing your application.
This does not necessarily mean you cannot get a mortgage.
It can mean fewer lenders may be willing to offer you a mortgage, and the available interest rates could be less competitive.
If your credit history has problems, checking your credit reports and speaking to a qualified mortgage adviser before submitting multiple applications can be useful.
Can You Get a 5% Deposit Mortgage if You Are Self-Employed?
Being self-employed does not automatically prevent you from getting a mortgage.
The lender will usually want evidence of your income and financial position.
You may need documents such as tax calculations, accounts or other evidence of earnings, depending on the lender.
MoneyHelper notes that self-employed applicants may need tax statements and business accounts, with some lenders asking for evidence covering at least two years.
The exact requirements differ between lenders.
First Homes and Other Affordable Home Ownership Options
A 5% deposit mortgage is not the only option for people struggling to save a large deposit.
The UK has several affordable home ownership schemes.
For example, the First Homes scheme in England can offer eligible first-time buyers a discount of at least 30% from the market price. The scheme has specific eligibility and property-price requirements.
Shared Ownership is another option available across the UK. Under Shared Ownership, you buy a share of a property and usually pay rent on the remaining share.
These schemes work differently from a standard 95% LTV mortgage, so you should compare the long-term costs before choosing one.
What Credit Score Do You Need for a 5% Deposit Mortgage?
There is no universal credit score required across all UK mortgage lenders.
Each lender has its own criteria.
A strong credit history can improve your chances of being accepted, but your credit score is only one part of the assessment.
Lenders can also consider:
- Your income
- Existing loans
- Credit card balances
- Monthly expenses
- Employment
- Deposit
- Property type
- Loan size
- Previous financial problems
Improving your financial position before applying can increase the number of mortgage options available to you.
How to Improve Your Chances of Getting a 5% Deposit Mortgage
If you want to apply for a mortgage with 5% deposit UK lenders offer, start preparing several months before your application.
Keep your credit commitments under control.
Avoid taking unnecessary new loans before applying.
Pay your bills and credit commitments on time.
Keep evidence of your income.
Build an emergency fund rather than putting every pound you have into the deposit.
Also check your credit reports for errors.
Most importantly, calculate what monthly payment you can realistically afford.
A mortgage should fit your budget rather than simply being the largest amount a lender is prepared to offer.
Is It Better to Wait and Save a 10% Deposit?
There is no universal answer.
Waiting can make sense if you are close to reaching 10% and doing so would substantially improve the mortgage rates available to you.
But waiting also has a cost.
House prices could change. Mortgage rates could change. Your personal circumstances could change.
If you already have a 5% deposit and meet a lender’s affordability criteria, buying now could potentially make sense.
The important thing is to compare the overall financial position rather than assuming that a larger deposit is always better.
Example of a £200,000 Mortgage With a 5% Deposit
Imagine you want to buy a £200,000 house.
Your deposit would be:
£200,000 × 5% = £10,000
Your mortgage would be:
£200,000 − £10,000 = £190,000
You would therefore need a £190,000 mortgage at 95% LTV.
Your actual monthly payment would depend on the mortgage interest rate, mortgage term and product.
For example, a 25-year mortgage and a 35-year mortgage could have very different monthly payments and total interest costs.
This is why you should compare both the monthly payment and the total amount payable over the mortgage term.
Frequently Asked Questions
Can I get a mortgage with a 5% deposit in the UK?
Yes. 95% LTV mortgages allow eligible borrowers to purchase a property with a 5% deposit. The government’s permanent Mortgage Guarantee Scheme supports the availability of eligible 91% to 95% LTV mortgages.
Is a 5% deposit enough to buy a house?
It can be enough for the mortgage deposit, but you should budget separately for other costs such as legal fees, surveys, moving costs and any applicable taxes.
How much is a 5% deposit on a £300,000 house?
A 5% deposit on a £300,000 property is £15,000. The remaining £285,000 would need to be financed through a mortgage if there are no other contributions.
Are 5% deposit mortgages only for first-time buyers?
No. Eligible home movers can also access mortgages supported by the current Mortgage Guarantee Scheme.
Is a 95% LTV mortgage risky?
A 95% LTV mortgage means you have relatively little equity in the property at the beginning. If property values fall, you could have less equity or potentially fall into negative equity. MoneyHelper highlights this as one of the risks associated with low-deposit mortgages.
Can I get a 5% deposit mortgage with bad credit?
Possibly, but your options may be more limited. Lenders assess your overall financial circumstances, and a poor credit history can affect eligibility and the interest rate available.
Can I use gifted money for my 5% deposit?
Some lenders allow gifted deposits, but the rules vary. The person providing the money may need to confirm that it is a genuine gift and that they have no ownership interest in the property.
Final Thoughts
A mortgage with 5% deposit UK buyers can access can make home ownership possible without waiting years to build a 10% or 20% deposit.
A £10,000 deposit could potentially be enough for a £200,000 property, while £15,000 could represent a 5% deposit on a £300,000 property.
The key issue is not simply whether you have 5% saved. You also need to demonstrate that you can afford the mortgage and meet the lender’s criteria.
Compare 95% LTV mortgage deals carefully, check the total cost of borrowing, keep some savings available for buying costs and consider whether waiting for a larger deposit would improve your position.
For the latest official information, the UK Government confirms that its permanent Mortgage Guarantee Scheme supports eligible 91% to 95% LTV mortgage lending, including mortgages that can be used with deposits as small as 5%.
