Low deposit mortgages in the UK: schemes and how to buy with a small deposit

Saving a large deposit can take years, but a smaller deposit does not necessarily prevent you from buying. In the UK, many buyers purchase a home with a deposit of around 5% or less of the property’s value.

There are mortgages and schemes are designed for buyers with smaller deposits. This page explains how low deposit mortgages work, which schemes are available in 2026, how much you may be able to borrow, and what lenders consider when assessing an application.

Can you get a mortgage with a low deposit?

Yes. Many lenders offer mortgages with a deposit of around 5%, which means borrowing up to about 95% of the property’s value (a 95% loan-to-value, or LTV, mortgage). A few lenders now offer mortgages with a 2% deposit or a £5,000 deposit. 

The trade-off is that the smaller your deposit, the more closely lenders tend to look at affordability, and the higher your interest rate may be. A larger deposit usually unlocks a wider choice of products and better rates.

Having a low deposit does not automatically prevent you from getting a mortgage. It usually means a narrower choice of suitable products, making it more important to compare lenders and criteria carefully before applying.

What is a low deposit mortgage?

A low deposit mortgage is a mortgage where you put down a smaller-than-average deposit, typically 5% or less to 10% of the purchase price. That equates to a 90% to 98% LTV.

In every other respect it works like a standard mortgage. You borrow the rest from a lender and repay it, usually with interest, over a term that is often 25 to 35 years. The main differences are the size of the deposit and the LTV.

Loan-to-value, or LTV, is simply the size of your mortgage compared with the value of the property, shown as a percentage. A 5% deposit means a 95% LTV.

Government low deposit mortgage schemes

Alongside standard low deposit mortgages, there are government-backed and industry schemes designed to help buyers with smaller deposits. Rules and availability change over time, so the summary below reflects the position in 2026. Always check the latest official guidance before applying, as scheme eligibility and rules can vary.

One important note first: the old Help to Buy Equity Loan closed to new applicants in England in October 2022 and has not been replaced by a direct equivalent. If you have seen it mentioned, it is no longer available for new purchases.

Mortgage Guarantee Scheme (Freedom to Buy)

The Mortgage Guarantee Scheme, now known as Freedom to Buy, was made a permanent scheme in July 2025. It supports 91% to 95% LTV mortgages by giving participating lenders a government-backed guarantee against part of their potential losses. In practice, this helps keep 5% or less deposit mortgages available on the high street.

You do not apply for it directly. The guarantee works behind the scenes between the lender and the government, and you take a normal 95% or less mortgage. It generally applies to residential homes you will live in, on a repayment basis, up to a property value of £600,000, subject to the usual affordability checks. It is open to both first-time buyers and home movers.

Many lenders also offer 95% mortgages independently of the scheme, so the guarantee does not necessarily determine which individual deal you can access. Its broader purpose is to support the availability of low deposit lending across the market.

Shared Ownership

With Shared Ownership, you buy a share of a property (often between 25% and 75%) and pay rent on the remaining share, usually to a housing association. Because you are only buying a share, the deposit is calculated on that share rather than the full price, which can make the upfront cost more manageable.

Over time you may be able to buy further shares, a process known as staircasing. Eligibility, available shares and rules vary by provider and location, so check the current criteria before committing.

New-build low deposit routes

New-build homes sometimes carry stricter deposit requirements, with some lenders asking for 15% or more. Schemes have existed to bridge that gap.

Please note that the Deposit Unlock scheme closed to new completions in April 2026. Existing offers and cases are being honoured, but it is no longer available for new purchases. Newer alternatives have appeared in its place, such as builder-backed and lender-backed products that allow a 5% deposit on selected new-build homes. As these come and go and vary by developer and lender, it is best to check what is currently available on the specific development you are considering.

First Homes Scheme

The First Homes Scheme (available in parts of England) allows eligible first-time buyers to purchase a qualifying new-build home at a discount to its market value, often between 30% and 50%. The discount stays with the property for future eligible buyers.

There are eligibility conditions, including price caps and, in some areas, local connection or income limits. Availability also depends on participating developments, so check the current rules and local availability before relying on the scheme.

Guarantor and family mortgages

With a guarantor or family mortgage, a close relative supports your application, for example by using their savings or property as security. This can help you borrow with a small deposit, or in some cases none at all, without the relative giving the money away.

These products carry obligations for the family member, so everyone involved should understand the commitment and take advice first. You can read more about no-deposit routes on our zero deposit mortgages page.

Scheme	Who it may suit	Minimum deposit	New-build only?
Mortgage Guarantee Scheme (Freedom to Buy)	First-time buyers and home movers with a small deposit	Around 5% or less	No
Shared Ownership	Buyers who cannot afford the full purchase price	Deposit on the share you buy	No
First Homes Scheme	Eligible first-time buyers (selected areas)	Around 5% of the discounted price	Usually new-build
Guarantor / family mortgages	Buyers with family able to help	Often low or none	No
New-build low deposit products	New-build buyers with a small deposit	Around 5% (selected plots)	Yes

How much deposit do you actually need?

For most residential purchases, the minimum deposit is usually around 5% or less of the property’s value, though 10% is a common and often more comfortable starting point. As a general guide, the more you can put down, the better the rates and choice you are likely to see.

Here is how deposit size typically relates to LTV and what it can mean for you.

Deposit	LTV	What it usually means
5% or less	95% or less	The minimum for many lenders. Rates tend to be higher and choice is narrower.
10%	90%	A wider choice of products and generally better rates than 95%.
15%	85%	Noticeably better terms and access to more competitive deals.
20%+	80% or lower	Among the widest choice and most competitive rates available.

Low deposit mortgages for first-time buyers

First-time buyers are the largest group using low deposit mortgages, and there are options built with them in mind. Alongside standard 5% deposit mortgages, several of the schemes above are aimed at first-time buyers in particular.

Before applying, check your credit history, the size and source of your deposit, and how lenders are likely to assess your income. A gifted deposit from family is often acceptable if you can provide the required paperwork. Sorting these points out early can make the application process easier.

You should also budget for costs beyond the deposit, including valuation and conveyancing fees and, where applicable, Stamp Duty (SDLT). First-time buyers may qualify for Stamp Duty relief up to certain thresholds. Check the current rules before you buy.

An Agreement in Principle can give you an early indication of what you may be able to borrow before you start viewing properties. You can learn more on our mortgage Agreement in Principle page.

Estimate your borrowing

A calculator can give you a quick, rough idea of what a low deposit purchase might look like: how much you may be able to borrow, an estimated monthly repayment, and the income a lender might want to see.

This tool provides a general overview and does not constitute financial advice. Please note, this is only an estimate. Lenders will apply their own criteria.

Example calculation

Suppose you are buying a property valued at £200,000 with a 5% deposit.

• Deposit (5%): £10,000
• Mortgage required (95% LTV): £190,000

On a 25 to 30 year repayment term, the monthly payment would depend heavily on the interest rate you secure, so it is best to model this against current rates. As a purely illustrative example, at a rate of 5% a £190,000 repayment mortgage over 30 years would cost in the region of £1,020 a month, though your actual payment will differ with the rate and term you choose.

As a rough guide, lenders often look for household income in the region of 4 to 4.5 times the loan, which for a £190,000 mortgage points to an income broadly around £42,000 to £47,500, depending on your circumstances and the lender’s criteria.

Because a 95% or less mortgage usually carries a higher rate than a lower-LTV deal, your monthly payment is likely to be higher than it would be with a larger deposit for the same property.

Do low deposit mortgages have higher interest rates?

Generally, yes. A higher LTV means more risk for the lender, and that is usually reflected in a higher interest rate compared with lower-LTV deals.

The rate you start with does not necessarily remain the same for the life of the mortgage. As you repay the loan, your LTV falls; it may also fall if the property’s value increases. When your current deal ends, you may be able to remortgage at a lower LTV and access a better rate, subject to your circumstances and the lender’s criteria at the time.

The cost of a 95% or less LTV mortgage can change as you build equity and become eligible for different products.

Can you get a low deposit mortgage with bad credit?

It can be harder to get a low deposit mortgage with adverse credit, but it may still be possible. Combining a small deposit with credit issues narrows the range of lenders and products available, and the rates offered may be higher.

Specialist lenders consider applications that high-street lenders may decline, often through manual underwriting that looks at your full circumstances rather than a simple automated score. The type, size and age of any credit issues all matter, and marks generally carry less weight as they get older.

A broker can be particularly useful in this situation by identifying lenders whose criteria fit your credit history and circumstances. This can reduce the risk of unsuitable applications and unnecessary credit checks.

Pros and cons of a low deposit mortgage

A low deposit mortgage can help you buy sooner, but borrowing at a high LTV also comes with costs and risks to consider.

Estimate your borrowing

• Buy sooner. You can get onto the property ladder without waiting years to save a larger deposit.
• Stop renting earlier. Your payments go towards a home you own rather than a landlord’s.
• Access to different routes. Standard mortgages, schemes and specialist lenders can provide options for buyers with smaller deposits.

Points to weigh

• Higher rates. Expect a higher interest rate than a lower-LTV deal, at least to begin with.
• Higher monthly payments. A larger loan and a higher rate mean higher repayments.
• Negative equity risk. With little equity, a fall in house prices could leave you owing more than the property is worth. This becomes particularly important if you need to sell or remortgage while the property’s value is below the outstanding mortgage balance.

These risks should be considered alongside the benefits when deciding how much to borrow and which mortgage to choose.

Which lenders offer low deposit mortgages?

Many high-street lenders offer 95% or less mortgages, and the number of 5% deposit deals on the market has grown in recent years. For more complex situations, such as adverse credit or non-standard income, specialist lenders often have more flexible criteria.

Products, rates and acceptance criteria vary between lenders and change frequently. A broker can compare a range of lenders and identify those whose criteria are more closely aligned with your circumstances, rather than applying to lenders one at a time without knowing how they will assess your case.

What documents do you need?

Preparing your paperwork in advance can reduce delays. Lenders typically ask for:

• Proof of identity. A passport or driving licence.
• Proof of address. Recent utility bills or bank statements.
• Proof of deposit. Bank statements showing your savings, plus a gift letter if any of it is gifted by family.
• Proof of income. Recent payslips and a P60 if you are employed, or SA302 tax calculations and Tax Year Overviews (usually covering two to three years) if you are self-employed.
• Bank statements. Usually the last three to six months, showing your income and regular outgoings.


If you are self-employed, our self-employed mortgages page explains how lenders assess your income in more detail.

How to improve your chances of approval

A low deposit application depends on more than income. Before applying, there are several practical steps you can take to improve how lenders assess your case:

• Grow your deposit if you can. Reaching 10% rather than 5% widens your choice and can improve your rate.
• Check and tidy your credit. Review your credit report, correct any errors, register on the electoral roll, and reduce existing debts where possible.
• Avoid new credit before applying. Hold off on new loans, cards or large purchases in the months before your application.
• Keep your accounts in good order. Avoid missed payments and unnecessary overdraft use, and be aware that lenders may review regular or significant gambling transactions as part of their affordability assessment.
• Get advice early. A broker can flag issues before you apply and point you to the most suitable lenders.

How to get a low deposit mortgage

A low deposit mortgage application generally follows the same process as other residential mortgage applications. The usual steps are:

• Save your deposit. Aim for at least 5% or less of the likely purchase price, and more if you can.
• Speak to a mortgage broker. A broker can review your circumstances, explain which lenders and low deposit options may suit you, and help you understand what you may be able to borrow.
• Check your credit score. Review your report early so you have time to fix any issues before making a full application.
• Get an Agreement in Principle. With your broker’s help, get an early indication of what you may be able to borrow and show sellers you are serious.
• Choose a lender and apply. Compare suitable lenders, rates, fees and schemes with your broker, then submit the full application and get support through to your mortgage offer and completion.

Common mistakes to avoid

Some problems can be avoided before you submit an application. Common mistakes include:


• Not checking your credit report first, then being surprised by an avoidable decline.
• Applying directly to an unsuitable lender, which can mean a wasted hard credit check.
• Taking on new credit shortly before applying, which can reduce how much you can borrow.
• Forgetting the extra costs, such as valuation fees, conveyancing, and Stamp Duty (SDLT) where it applies.

Why get a low deposit mortgage with Smart City Mortgages

Smart City Mortgages is an FCA-authorised mortgage broker. We compare products from a wide range of lenders, including those offering 95% or less mortgages and specialist lenders for more complex cases, to find options that suit your circumstances.

We keep track of current schemes and lender criteria, help you prepare your application, and support you from Agreement in Principle through to completion. This can help you identify suitable lenders earlier and avoid applications that do not fit their criteria.

Frequently asked questions

Ready to get a non-standard construction mortgage?

If you are considering buying with a small deposit, we can check what you may be able to borrow, explain which schemes and mortgage options may fit your circumstances, and guide you through the application from start to finish.

• Check how much you can borrow
• Get an Agreement in Principle
• Speak to an adviser

Smart City Mortgages is authorised and regulated by the Financial Conduct Authority (FCA). Your home may be repossessed if you do not keep up repayments on your mortgage. The information on this page is general and does not constitute financial advice. Scheme availability, eligibility and rules can change, so please check current official guidance before applying.