5% Deposit Mortgages

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5% Deposit Mortgage

Christian Duncan talks to us about 5% deposits.

Can you get a mortgage with a 5% deposit? How does it work?

5% deposit mortgages have been around for years. Most people would qualify for a 5% deposit mortgage, but like most things, a lot goes into it.

Lenders look at your circumstances such as whether you’ve got good or bad credit, your credit score and how much you earn. At 95% Loan to Value, you might be looking to borrow quite a lot of money, so it needs to be affordable on paper.

These are things that a mortgage broker can sit down and explain to you before you initiate that process.

What type of property can you buy with a 5% deposit mortgage?

On 5% deposit mortgages, there are certain restrictions in place. Currently, it’s July 2025, and we’ve got deals on the market where you can even buy a new build flat on a 5% deposit mortgage.

These products are always subject to change, and market conditions will always dictate that. At the moment, there aren’t any restrictions on the type of property available with a 5% deposit.

There will be certain criteria to adhere to, though. For example, if you’ve got a concrete precast property, it’s unlikely you’ll get a 5% deposit mortgage on that because of the risk it poses to a lender. Also, some lenders may not like a small flat above a takeaway. There are lenders that do, but they’re likely to want more than a 5% deposit.

But as a whole, most residential purchases would qualify for a 5% deposit at the time of recording.

What schemes are available when acquiring a mortgage with a 5% deposit?

People will remember the 5% deposit scheme with Help to Buy. This was run by the government where they would give you 20% of that property value, interest-free for five years.

At the end of that five-year period, most people would remortgage and pay it off. But that scheme stopped taking applications for new purchases in October 2022.

5% deposit deals still continued after that point, but with no government backing. After the pandemic, the government helped prop up the property market by encouraging lenders to continue with 95% mortgages, and promised to help to cover any loss from someone not paying the mortgage.

Lenders are always worried when there are big changes in the market, such as Covid, in case there is a property downturn. If someone only puts a £5,000 deposit in and prices drop by 5%, the house is no longer worth what they’ve paid for it.

Lenders needed to protect themselves and the government stepped in to do that. Unfortunately, that has also come to an end in June 2025 – just last month.

But lenders are still offering 95% mortgages, and the market is still strong. Hopefully that gives people peace of mind, because in July 2025 these are still available, which is great.

We also have circumstances where people can get 100% mortgages, shared ownership and Right to Buy from councils. But for most people, a 5% deposit purchase or a remortgage up to 95% are still possible.

Which lenders provide 5% deposit mortgages? Do all lenders offer this?

Most high street lenders at the time of recording in July 2025 still offer 95% mortgages. Where this changes is with specialist lending or complex circumstances.

For somebody with bad credit the risk might just be too high at 95%. They might be offered 90% or 85%. But there are still specialist lenders that in certain circumstances will offer a 95% Loan to Value mortgage, which effectively is a 5% deposit.

Who is eligible for a 5% deposit mortgage?

Most people will qualify. It is subject to credit scoring, but most can get a 5% deposit mortgage, subject to affordability and credit score. It can also depend on immigration status within the UK – whether the client is on any visas or permits.

There’s a common misconception that the self-employed, contractors or CIS workers will need a bigger deposit – but that’s rubbish. All of those people can get 5% deposit mortgages.

The main thing with these mortgages is to be very clear about what you want from it and what your circumstances are. Pass all your information to a broker and let us do the legwork. There’s no point googling to find things out. It’s like when you feel ill, and you put the details into Google – it’s scary and you wish you hadn’t. Instead, just speak to us.

Speak To An Expert

Whether it’s your first time, moving home, investing or just looking for a better rate we would love to hear from you.

Can I get a 5% deposit mortgage with bad credit?

Yes, you can. A lot of our business at the moment is 5% deposit mortgages with bad credit. Some lenders will credit score, which means they look at the score on your credit profile, compare that to their scorecards and make a decision based on that.

But other lenders will credit search, where they ignore the score and base their lending decision on your profile. Perhaps there are a couple of defaults, CCJs or some missed phone payments.

If a credit score is really low, there’s a good chance that the high street won’t want that case. It’s a ‘computer says no’ approach, which isn’t helpful. Instead, we might go to a lender that wouldn’t score.

With bad credit, you can still get 5% mortgages if we look at some niche lenders. Certain things can be ignored by lenders as well, which can be the difference between going to a specialist or a high street lender. Some ignore things like missed payments on a mobile phone, mail order or car insurance if they’re under a certain value.

Can I remortgage with a 5% deposit?

You can. I think this is about whether someone can remortgage up to 95% Loan to Value on their property? If the property is worth £100,000, they’re asking whether they remortgage and get £95,000 worth of mortgage.

In short, yes, you can. However, with remortgaging lenders always look at why you need that extra money. You could be consolidating debts or have a wedding to pay for, or a tax bill.

The best thing to do at that point is sit down with a broker. A lot of high street banks have caps on remortgaging. But you can remortgage up to 95% with the right advice.

How can you get a mortgage with a 5% deposit? What’s the process?

Reach out to your mortgage broker, whether that’s us or somebody else. We’d love to work with you. Give us a call or send us an email. We’ll get some very brief information and book you in for a 30-40 minute initial consultation. We don’t charge for that.

It’s important that we understand all of your circumstances to see if you would qualify for a 5% deposit mortgage. Let’s sit down and discuss it, because lenders price their rates on Loan to Value. At 95%, you’re right at the top. We’ll make sure you’re on the deal you qualify for.

Ultimately, it’s not going to be the lowest rate on the market, because you pose quite a high risk to that lender at 95% Loan to Value.

You’ve demonstrated how a mortgage broker can help – is there anything else we need to consider?

With mortgages, there are two options. You go to the bank or you come to a broker like myself. Most brokers advertise themselves as ‘whole-of-market.’ But actually, that’s incorrect. Most mortgage brokers, us included, have access to a wide panel of lenders which are a fair representation of the market.

So before you initiate the process, chat with your broker about the lenders they’ve got on the panel and the success they’ve had in the past. The last thing you want to do is tie yourself down to a bank and only see their products – or go with a broker that’s only got access to a handful of lenders.

Hopefully, your circumstances are relatively straightforward, but if they’re not, you’re going to need a broker with more tools in the toolbox, which means more lenders and more options.

Look at the broker’s reviews online, interview them a little bit, get to know them. Are they the right person for you to work with? It doesn’t just stop at your mortgage. We look at insurance too, and every year, we’re going to give you a call to see how things are going and how the family is. We check if you need any help and discuss any remortgage opportunities for the future.

When you look for a broker, you’re going to be working with them for a long time. So make sure you choose the right one.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.