We explain how a 95% LTV mortgage works and how having a 5% deposit will affect how much you end up paying.

A 95% Loan to Value, or 95% LTV mortgage is when you borrow is 95% of the value of the house you're buying. You might come across this being called a '95 LTV mortgage' or even '95 mortgages'.

With a 95% mortgage, you have to make up the remaining 5% of the purchase price yourself.

How do I get a 95% mortgage?

You can do this using either a 5% deposit you've saved up, or equity from your current home.

The equity you have in your current property is the share of it that you already own.

For example, if you bought a house for 200,000 and had saved up 10,000 as a deposit, your savings would cover 5% of the price. Your mortgage would cover 190,000, which means you'd need a 95% mortgage.

Some people also refer to them as '5% mortgages', but that term is incorrect. A 5% mortgage implies that you'd need to put in 95% of the purchase price as a deposit - which is a lot more money.

How to find a 95% mortgage

Finding the right mortgage can be a challenge, but what mortgage ltv you choose will depend on your deposit; with a 95% mortgage, you only need a 5% deposit which can be easier to get together.

You can find a 95% mortgage using our comparison table above. It includes every 95% UK mortgage.

Use the table to compare the interest rate and fees that come with each of the 95% mortgages. It'll make it easier for you to work out which will be cheapest. You can click on 'check eligibility' at the side of each mortgage in the table to find out if you'll be eligible.

Can I borrow a 5% deposit?

You can choose to borrow the 5% deposit but be aware that any borrowing will show up on your credit report.

Mortgage lenders will take into account any other borrowing when working the amount of mortgage repayments you can afford.

If you are borrowing your 5 per cent deposit from a family member you will still have to declare this as a loan.

Here's how to decide what type of mortgage you should get.

What can 95% mortgages be used for?

You can use 95% mortgages if you're buying your first home, moving home or even remortgaging.

Because you only need a small deposit, mortgages like this can be good for first-time buyers. A high LTV mortgage means you only need to save up a small deposit which is more manageable.

Saving up for a lower LTV mortgage, such as a 60% mortgage, could be very difficult - or impossible - for first-time buyers. A 5% deposit is easier to achieve.

Buying your first home

Some 95% mortgages can be used to buy your first home.

If you can save up a deposit of at least 5%, mortgages for first time buyers are easier to come by. The more you save, the better the rates you'll get. Remember that 95 LTV mortgage rates won't be as good as rates on a mortgage with a lower LTV, such as 90%.

There are a few ways you can try to save a deposit for your first home. You can do all, or a mixture, of the following:

  • Using your existing savings

  • Saving money each month

  • Borrowing from your family or friends

  • Using money given to you as a gift or inheritance

  • Sticking to a monthly budget

  • Cutting back on your spending

  • Spending less on rent

  • Switching your energy bills

  • Choosing the right savings account.

If you are using money given as a gift, bear in mind you will need the person gifting you the deposit to declare this is a gift and not a loan. Inheritance tax rules mean that there is a chance you will end up with an inheritance tax bill.

Here's some more advice on how to save up a deposit.

Don't forget that even when you've saved your deposit of 5%, mortgages aren't all suitable for first-time buyers. So you'll need to find a mortgage that accepts first-time buyers.

You could also look into using the Help to Buy scheme to buy your first house with a 5% deposit.

Here's how to find a mortgage to buy your first home and check you can afford it.

Moving home

If the outstanding balance on your mortgage is 95% of the cost of the house you want to buy, you'll need a new 5% deposit mortgage.

For example, if you owe 190,000 on your current mortgage and want to buy a new house for 200,000, you'd need a 95% LTV remortgage. The 10,000 equity in your current home could be used as the 5% deposit on your new mortgage.


If the outstanding balance on your mortgage is 95% of your home's value, you could get a new mortgage with an LTV of 95%.

The equity in your current home would be used as a 5% deposit on your new home.

However, interest rates on 95% mortgages are usually higher than those with a lower LTV. This means the best deals are available if you can save up to increase the equity in your home.

Who can get 95 percent mortgages?

Lenders won't give you a 95% mortgage unless you've got an excellent credit history. Giving 95% mortgages is risky to lenders, so they won't take a risk on you unless they think you're a safe bet.

As with any mortgage, if you want a 95% mortgage you'll also have to show that you'll be able to afford the monthly repayments. Lenders will want to see your income, debts and outgoings before they decide whether they're happy to give you a 95% mortgage.

What to consider when choosing a 5 percent deposit mortgage

When you're choosing a 5 percent deposit mortgage there are a few things you'll need to think about.

These include:

The interest rate

When you take out a mortgage with a 5% deposit, the lender charges you interest to borrow money from them. The way you pay interest will affect your monthly payments and how much you'll pay overall.

If you pay a fixed rate
You agree to the interest for a set length of time, which means you know how much your monthly repayments will be.

If you pay a variable rate
The interest tracks the Bank of England base rate and goes up or down in line with this. This means your monthly repayments can be higher or lower, depending on external economic factors.

The type of mortgage

You can get a repayment mortgage, which is more expensive each month but you are chipping away at the balance.
Or, you can get an interest only mortgage, which is where you just pay off the interest. An interest-only mortgage is cheaper each month, but you don't bring your balance down at all. You'll still owe the full value of the house when your fixed term ends.

The schemes available

Getting on the property ladder can be hard. Often, the people interested in 95% mortgages are first-time buyers. If that's you, you could look into the Government schemes that might help you. These include Help to Buy and Shared Ownership. With Shared Ownership, you buy a share of the property and pay rent on the share that you don't own.

How much can I borrow through a 95% mortgage?

The amount you can borrow through a 95% mortgage - or any mortgage - depends on your personal situation. Lenders will look at:

  • Your salary

  • Your income

  • Your outgoings

  • Your credit history

Usually you'll be able to borrow around three or four times your salary when you get a 95 percent mortgage, UK wide. It might be a bit less than this if you're getting a mortgage with someone else and basing it on two incomes.

Remember that every mortgage has different criteria to help them decide how much they'll lend and who they'll lend to.

And don't forget that if your deposit is only 5 percent, mortgages won't be as cost effective as they would be if you had a bigger deposit.

Are 95% mortgages best for first time buyers?

If the monthly mortgage repayment is affordable a 95% mortgage is suitable for first time buyers. You are always best trying to save as much of a deposit as possible, and aiming to choose a repayment which slowly increases your equity value in your home.

Are there any disadvantages with 95% mortgages?

Yes. Getting a 95 percent mortgage isn't risk free, unfortunately.

One of the biggest risks is getting into negative equity. If you had a 95% mortgage and the value of your home suddenly dropped, it could be worth less than what you owe on your mortgage. You'd suddenly be left paying interest on a loan that's bigger than what the property's currently worth.

The other thing to look out for is that 5% deposit mortgages aren't usually the best option in terms of the rates. It's usually the case that the bigger the deposit you put in, the better the mortgage deal you're offered.

As with any mortgage, if you don't make the repayments, your home could be repossessed. So it's worth being aware of this risk if you're considering taking out any mortgage at all.

95% mortgage FAQs


Can I get a mortgage without a deposit?


Yes, if you have a guarantor. You need at least a 5% deposit for other mortgages, but some come with schemes to help you buy your first home.


How can I save a deposit?


Here is how to save up for a deposit. Saving more helps your chances of being accepted and could help you get a cheaper mortgage.


Does my credit record matter?


Yes, it will show lenders if you can keep up with repayments on a mortgage. Here is why your credit record matters.


Can I afford a mortgage?


Check if you can afford one by working out how much you earn and spend. Compare this to how much buying a home will cost you.


What is a higher lending charge?


Some lenders add a fee of around 1.5% if your deposit is less than 10%. Not every lender charges this as a separate fee.

About our mortgage comparison


Who do we include in this comparison?


We include mortgages from every lender in the UK. They are all from lenders regulated by the Financial Conduct Authority. Here is more information about how our website works.


How do we make money from our comparison?


We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.
You do not pay any extra and the deal you get is not affected.

Last updated: 29 January, 2021