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What are 95% mortgages?

A 95% mortgage allows buyers, whether first time buyers or movers, to secure a home with only a 5% deposit, with the remaining 95% covered by the mortgage lender.  

A 95% mortgage is especially attractive for first time buyers who may not have the means to save a traditional 10% deposit.

For an example, if you are purchasing a £200k property, you’d need a minimum of 5% deposit which is £10k, and then you’d apply for a 95% mortgage for £190k to cover the purchase price.  

95% mortgages are also available to current homeowners looking to remortgage to release capital for one reason or another.  

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Can you get a 95% mortgage?

Establishing whether you can get 95% mortgages will depend on several factors including:

  • Your income and employment.
  • The property type and construction.
  • Existing credit commitments such as personal loans, car loans, and credit cards.
  • Your credit score and account conduct.

Getting 95% mortgages with a 5% deposit can be tricky without an experienced mortgage broker on your side.

Also, the interest rates on 95% mortgages tend to be higher than lower loan to value (LTV) deals due to the increased risk to the lender.

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Our 95% mortgage advice service.

We’ve helped many first-time buyers, home movers, and existing property owners get 95% mortgage deals with only a 5% deposit.

  • Joint name 95% mortgages.
  • Sole name 95% mortgages.
  • First time buyers, home movers or capital raising.

As part of our service, we’ll let you know how much you can borrow on a mortgage, how much the payments will be per month, and product you a mortgage agreement in principle document.

Using our experience and knowledge we can usually help with:

  • Family gifted deposits.
  • Buying off a landlord or sale at under value.
  • Complicated situations.
  • Bad credit mortgage options.
  • Aged 50+ mortgage options.
  • Remortgage to capital raise.
  • Debt consolidation options.
  • Self-employed or complex income mortgages.

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95% Mortgages and 5% Deposit Mortgages FAQs

How can you get a 95% mortgage?

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You can get a 95% mortgage via a mortgage broker like us or by going direct to a lender yourself. There’s a lot that can go wrong with a 95% mortgage application including hurdles with the mortgage application, the property survey, valuations, and the conveyancing process.

We’d always recommend seeking the services of a trusted mortgage broker to help you along the way, saving you both time and money.

The documents that you will need to provide for a 5% deposit mortgage include:

  • Evidence of earnings.
  • Bank statements showing good account conduct.
  • Identification.
  • Proof of deposit for a new purchase.
  • Credit report showing amounts of dates of anything that is registered against you.
  • Details of existing credit commitments such as loans and credit cards.

With 95% mortgages, your new lender is taking on a high level of risk therefore a thorough application process is conducted. Other ad-hoc documents may be requested along the way depending on your individual situation.

What is a 95% mortgage?

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A 95% mortgage is a 95% loan on a property. You’d need to contribute a minimum 5% deposit towards the property purchase and the remaining finance will be provided by a mortgage.

Here is a 95% mortgage example:

For a £200k property purchase price.

£10k deposit will be required by you which is 5%, this can be from savings of a gift.

£190k mortgage application for the remaining 95% purchase price will be applied for and you’ll repay this back monthly for the term of your mortgage which is typically 30 years for a first-time buyer.

If you have more than a 5% deposit available, you might want to compare 90% LTV mortgages to see how much money this saves you per month.

Who offers 95% mortgages?

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Lots of banks offer 95% mortgages to first time buyers, home movers, and those looking to remortgage to capital raise for one reason or another.

Those banks that offer 95% mortgages will each have their own affordability assessments and criteria surrounding them. Therefore, it’ll be useful to engage the services of an experienced mortgage broker to help you find the best deal based on your personal situation.

There are also 95% mortgage lenders that offer deals to those with bad credit and those who are self-employed to help first time buyers on to the property ladder.

Am I eligible for a 95% mortgage?

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Generally, here is the eligibility criteria for 95% mortgages:

  • An older or new build property.
  • 5% deposit from your savings or a gift.
  • You’re buying a property to live in and not a buy to let.
  • Repayment basis and not an interest-only mortgage.
  • Sole or joint name applications.

For 5% deposit mortgages, customer will need to pass regular mortgage checks based on affordability, income, and pass a credit score.

Bad credit 5% deposit mortgages are available for those who have had credit problems in the past, details of when the bad credit was registered, for how much, and if this is now settled will need to meet lending criteria. Bad credit 95% mortgages can be harder to get.

Are 95% mortgages a good idea?

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If you can afford it, getting a 95% mortgage can be a good idea if you are currently renting and feel that you are wasting your money and would like to get on the property ladder.

However, 95% mortgages can be expensive compared to lower loan to value deals and becoming a homeowner will result in added responsibilities such as property maintenance and repair.

Whether 95% mortgages are a good idea will be based on your individual situation and your attitude towards risk. Our mortgage broker team will be happy to talk through the pros and cons in more detail with you to ensure you fully understand the costs.

Are 95% mortgage hard to get?

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95% mortgages are harder to qualify for than lower loan to value mortgage deals as they are deemed as higher risk by the lender. This is because if 95% mortgages are more exposed to negative equity if property prices were to reduce and if they had to repossess the property due to you not paying your mortgage, they are likely not to get the full loan amount plus any outstanding interest/fees back.

Lenders have a more thorough application process for 95% mortgages to avoid the above as much as possible such as a more in-depth valuation and increased checks on your mortgage application when processing.

Are 95% mortgages only for first time buyers?

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No, 95% mortgages are not only for first time buyers, but they can also be used by home movers, and those looking to remortgage. 

95% mortgages can be used by home movers who maybe haven’t been in their current home a long time and have not built up a lot of equity, or those looking to buy a more expensive property. 

95% mortgages can also be used by those wanting to remortgage onto a better deal who maybe had a 95% mortgage previously and house prices have remained similar and those looking to remortgage to capital raise for home improvements for example.  

Our mortgage team will provide help and guidance throughout the process to ensure you are on the best deal for your personal situation.

Can you get a 95% mortgage on an old house?

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Yes, it’s possible to get a 95% mortgage on an older house subject to your mortgage lenders valuation on the property. If you are purchasing an old house, your valuation will check the price that you’re paying for the property is what a professional would agree with.

If you already own and are raising money against an old house, you might have the option to remortgage up to 95% to fund home improvements on the property subject to valuation.

As part of the mortgage process, surveys might be required to prove that the property is in good condition.

How do 95% mortgages work?

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95% mortgages work by allowing either first time buyers or home movers to buy a new property with as little as a 5% deposit. With a 95% mortgage, you’re likely to be paying a higher interest rate on your loan than a customer with a bigger deposit due to the increased risk by the lender.

However, it’s hard to save for a deposit if you are renting therefore 95% mortgages give these customers a chance at home ownership with very little deposit. If you can save more of a deposit and aim towards putting 10% down your interest rate will likely be lower.

With a 95% mortgage, the 5% deposit can be made up from your own savings or a family gift therefore if you have family members that are able to help you out you will be able to get on to the property ladder faster with their support.

If you are an existing homeowner looking to release capital up to 95% for capital raising purposes, our mortgage advisor team will help you consider a remortgage to capital raise along with other products such as a secured loan or further advance which may be more suitable depending on your personal situation.

How long will 95% mortgages be available?

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95% mortgages have always been available when the property market has been stable. There have been times in the past where 95% mortgage deals were unavailable such as during the covid period and during the 2008 crash.

This is because 95% mortgages are deemed as higher risk lending. House prices have only got to fall slightly and then in the event of repossession your lender will be unable to get back the loan owed to them plus any interest.

In the rare event of an economic downturn the mortgage lenders will always prioritise the lower loan to value lending of 70% and below as it’s much easier to process from an administration point of view and lower risk in the event of repossession.

When does the 95% mortgage end?

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There is no end date to the 95% mortgages that are available on the market. Their availability is good and during times of economic stability they’re readily available subject to meeting criteria and affordability assessments.

Can I get a 95% mortgage with bad credit?

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Possibly, 95% mortgages tend to be available to customers that have a good credit history, however there may be exceptions. If your bad credit was historic and for a low amount this might be find with a 95% mortgage lender.

On the other hand, if you have a terrible credit score and poor account conduct it’s highly unlikely that you’ll qualify for a 95% mortgage deal.

Remember, mortgages with a 5% deposit are classed as high-risk lending therefore the lender will not be wanting to take on additional risk of recent bad credit.

If you have bad credit, a good place to start is to get hold of a copy of your credit file so we can see the amounts and dates of your bad credit. This information will be required to see if you meet criteria.

Can you get a 95% mortgage on a new build?

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Yes, 95% mortgages are available on new build properties.  Lenders have specialist mortgage products aimed at customers buying new build homes.  

If you are considering buying a new build property, it’s always best to speak with a mortgage broker beforehand to discuss your options and to see how much your mortgage is going to cost per month and to get you a mortgage agreement in principle document in place to back up any offers you make to the builder.  

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You'll always know who you are dealing with.

We're on your side, we work for you.

Getting your first mortgage can be a daunting experience. We’ll hold your hand all throughout the process.

Jargon-free insurance advice.

We'll recommend appropriate insurance products to ensure you can stay in your home, should you become seriously ill or unable to work.

1000s of potential options.

We shop around for the cheapest deal for you, saving you time and money.

We're experienced and knowledgeable.

There isn't a situation we haven't come across before, we fully understand your needs.

Your mortgage advisor will be with you every step of the way.

We'll help you overcome hurdles that you face along the way, for example, removing the stress of property survey and valuation problems.

Popular 95% Mortgages and 5% Deposit Mortgage Situations

95% Mortgages (5% Deposit Mortgage) with Bad Credit

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We’ve helped many customers with bad credit get 95% mortgages with a 5% deposit however, whether you will qualify for a mortgage will depend on when your bad credit was and the severity.

As a general rule, the more historic your bad credit was, the lower the amount, and it’s now all settled will aid your chances of being accepted for a 5% deposit mortgage.

Examples of bad credit include county court judgements (CCJs), defaults, and missed payments. Here at UK Moneyman we work with a very large number of mortgage lenders including some that specialist in helping customers with bad credit get mortgages.

95% Mortgages (5% Deposit Mortgage) for Self-Employed

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Getting a 95% mortgage with a 5% deposit is the same whether you are employed or self-employed, there’s no different in the mortgage.  

Don’t worry about the length of time you’ve been self-employed for, how many years accounts you have available, or if you’ve recently changed from being employed to self-employed etc until you’ve spoken to an experienced mortgage broker like us.   

The information that you read online can be inaccurate and there are some brilliant lenders who have products specifically aimed at helping self-employed applicants get mortgages.  

For a 95% self-employed mortgage application you’ll need to evidence your income in the form of:  

  • Dividend income. 
  • PAYE income. 
  • CIS Income. 
  • Directors’ loan. 
  • Retained profits. 
  • Freelancer/Contractor income. 
  • Employer pension contributions adjustment. 
  • Benefit income. 
  • Investment income. 
  • Pension income. 
  • Combination of the above. 

95% Mortgages (5% Deposit Mortgage) for those Aged 50+

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Nowadays, there are many mortgage options for those aged 50+. Which type of mortgage we’ll recommend will depend on your personal circumstances, your income and affordability, and your plans with the property.

Here at UK Moneyman we have a specialist later life mortgage team who will be able to help with your retirement mortgage advice options.

95% Mortgages (5% Deposit Mortgage) for Debt Consolidation

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If you have owned your home for a while now you might have built up a fair amount of equity and are maybe considering a debt consolidation mortgage to repay any credit cards and personal loans.

If you are considering a debt consolidation remortgage, it’s important to weigh up both the advantages and disadvantages of this as you could put yourself in a worse situation.

With a debt consolidation mortgage, you’ll be lucky to go up to 90% loan to value on a mortgage with the products that are available.

Our mortgage broker team will be able to talk through the pros and cons of debt consolidation and ensure you understand the risks that are involved in taking unsecured credit and securing this against your home.

95% Mortgages (5% Deposit Mortgage) for Home Improvements

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A 95% mortgage is possible for the purpose of home improvements, this will allow you to remortgage your current home and capital raise up to 95% to fund your project.

Popular examples of home improvements include a new kitchen, bathrooms, extensions, and conversions.

If you have had your property for a while now you are likely to have accumulated a lot of equity in it and would like to use this to fund your home improvements via a 95% mortgage. Once the home improvement works are completed, hopefully the value of your home increases and then when you come to remortgage again in the future, you’ll benefit from a lower loan to value deal.

Funding home improvements via a 95% mortgage is likely to cost you less money than via personal loans or credit cards, even factoring in the increased interest rate for the higher loan to value borrowing.

Our mortgage broker team will help you compare your options and provide quotations at 90% loan to value so you can compare rates and monthly repayment costs etc.

If you are in the middle of a fixed rate, an alternative to consider would be a secured loan to avoid any early redemption charges or a further advance mortgage from your existing lender.

95% Mortgages (5% Deposit Mortgage) with a County Court Judgement (CCJ)

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If you have a recent county court judgement (CCJ) you’ll find getting a 5% deposit mortgage, 95% mortgage difficult.

A good place to begin your journey would be to get hold of a recent credit file where you will be able to see when the CCJ was registered, how much it was for, and its status.

The status of a CCJ can be satisfied, part-satisfied, not satisfied, set aside or error, or expired.

The more historic your CCJ was, the lower the amount, and if it’s now settled will help your chances when applying for a high loan to value mortgage such as at 95%.

Working with a trusted mortgage broker, like us, who has experience in helping customers with a CCJ get accepted for a mortgage will also increase your chances. There are specialist lenders we work with also if you fail the high street lending criteria.

95% Mortgages (5% Deposit Mortgage) for Shared Ownership

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As little as a 5% deposit is required for a shared ownership mortgage, 95% mortgage deals are available with shared ownership properties.  

The share you are buying of the property will influence the amount of deposit that you need to put down, for example: 

Purchase price – £200,000 
Share purchase – £100,000 (50%) 
5% Deposit – £5,000 (£100,000 x 5%) 

As with all 95% mortgages for shared ownership, the more deposit that you have available the lower your mortgage costs will be, therefore, if you have the funds available to put down a 10% deposit for example, it’ll save you a lot of money over the term of the mortgage.  

Shared ownership is a very cost-effective way for first time buyers to get on the property ladder with just a 5% deposit required for the share they are purchasing.  

95% Mortgages (5% Deposit Mortgage) for Buying off your Landlord

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If you are currently renting and your landlords has offered you to purchase the property you’re living you may be able to get a 95% mortgage to finance this.  

Often, when buying off a landlord they can offer you a reduction in the asking price as a sale to a tenant would save them money by not paying estate agency fees and allowing them to receive rent right up to completion.  

If your landlord is offering you any discount this can help keep your mortgage payments lower as you’ll be borrowing less money.   

With buying off landlord transaction types, the 5% deposit for the mortgage will need to be from your own funds.  

The advantages of buying off a landlord for a first-time buyer are: 

  • It avoids you having to pay removals fees. 
  • You are not having to worry about giving notice to move out from your rental. 
  • No stress with moving dates. 
  • You might get a discounted purchase price from the landlord.  
  • You already know the property area and neighbours so you’re avoiding any nasty surprises. 

The disadvantages of buying off your landlord are: 

  • You may be able to get a better property elsewhere so it’s important to still consider this and view a few properties of a similar value. 
  • It can be hard saving up a 5% deposit whilst paying rent.  

95% Mortgages (5% Deposit Mortgage) with Gifted Deposit

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Gifted deposits are a popular way for both first time buyers getting on the property ladder and home movers looking to move to a more expensive property.  

Many parents and grandparents, if affordable to them, are happy to help family when required to fund a property purchase.  Times are different now and property prices are much higher than your parents or grandparents would have purchased at, so any help is usually greatly appreciated. 

If you are looking to get on the property ladder soon or considering moving to a more expensive property and you’re struggling saving for the deposit as you’re paying rent/mortgage, it’s always worth having a conversation with your family and let them know the dilemma you’re facing.  

With gifted deposit 95% mortgages, the full 5% deposit can come from a family gift subject to you meeting the lenders criteria, affordability assessment and passing a credit score.  

95% Mortgages (5% Deposit Mortgage) for New Build Properties

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95% mortgages are available for new build properties, subject to you meeting the lenders criteria and affordability assessments. This is great news for those looking to get on the property ladder and move into a new build home.

5% deposit mortgages on new build properties are offered by several lenders who have a specific range of high loan to value deals aimed at new build properties.

Whether you qualify for a 5% deposit mortgage on a new build property will depend on:

  • Evidencing your income.
  • Any existing credit commitments such as loans or credit cards.
  • The value of the new build property.
  • The construction of the property.
  • Your account conduct and credit history.

5% deposit mortgages for new build are available to both home movers and first-time buyers.

95% Mortgages (5% Deposit) for Old Houses

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5% deposit mortgage deals are not only available on new build properties, they’re available on old houses also.  

Many clients prefer to buy an older house due to the area, having more character, and the construction type.  

95% mortgage deals are available on older homes; therefore, you’ll only need a 5% deposit which can be from your own savings or a gift to explore your options for buying.  

As with any mortgage, you’ll need to pass your lenders affordability score, meet criteria, and pass a credit check to evidence that you will continue to meet your monthly mortgage payment.  

With older houses, if you are planning a doer upper project, this is fine with a 5% deposit also providing that the property is habitable when you buy it, i.e. it has a fully functioning bathroom and kitchen etc.   

If you are planning renovations, the property is likely to increase in value when the works are complete, therefore, when you come to remortgage in the future, you’ll maybe qualify for a lower loan to value interest rate as you’ve got more equity.  

95% Mortgages (5% Deposit) for Buy to Let Properties

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A 5% deposit mortgage is not possible for investment properties, for a buy to let purchase you’ll required a specialist buy to let mortgage.

You’ll need a much bigger deposit of 20%+ also plus be able to meet more stringent lending criteria.

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