5% Deposit
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5% Deposit
Paul Collinson talks to us all about mortgages with 5% deposits.
Can I get a mortgage with a 5% deposit?
Yes, you can, but this is the minimum amount of deposit with any lender, really.
What type of property can you buy with a 5% deposit mortgage?
You can get a house with most lenders, but many would need a higher deposit for a flat – they offer a lower Loan to Value on these. Some will still do it, but the number of lenders is reduced.
It’s the same with new build property. You can have a 5% deposit, but sometimes the loan to value is slightly reduced on new builds.
Who is eligible for a mortgage with a 5% deposit?
Lenders are often strict on the credit scoring and affordability within this loan to value bracket, as it is a higher risk for them. But as long as your credit is good and the affordability all stacks up, it should be fine.
What is the process of applying for a mortgage with a 5% deposit?
It’s the same process as for those with higher deposits. When you come to us initially, we work out what your maximum borrowing potential is. From that, you will know what property values to look at and what deposit you’ll need to save up.
You then find somewhere to buy, we get the most suitable mortgage option for you and guide you the whole way through until the day you move in.
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What government mortgage schemes are available with a 5% deposit?
The Mortgage Guarantee Scheme has now been around for nearly four years. It’s a scheme for 5% deposit mortgages supporting lenders to offer those products with a government-backed guarantee.
There’s also shared ownership, which is explained in another of our episodes, and also Right to Buy – where sometimes you don’t even need a deposit because the council gives you a discount. That can be used as a deposit with some lenders [information correct at time of recording in February 2025]
Do all lenders offer 5% deposit mortgages?
All the main high street ones do – but more unique lenders, offering mortgages for bad credit or unusual criteria scenarios, tend to require slightly higher deposits. Those lenders are generally not on the high street and go beyond what the main lenders are able to do.
Can I remortgage with a 5% deposit?
Yes, you can remortgage with 5% equity in your property, when the time is right.
What credit score is needed for a 5% deposit mortgage?
Credit scoring is stricter and tighter due to the higher risk element. Just to explain, whether your score is 999 or below, that’s just one part the lender looks at. When we put in for a Decision in Principle, each lender has their own credit scoring systems looking at various things. They’re all different in how they assess an applicant.
How can a mortgage broker help here? Is there anything else to consider?
If anyone has any questions or needs to know anything, just reach out to us – all our details are on the website. We’ll guide you all the way through the process. You’ll always know exactly what’s happening right through to completion. If you need any help, just pick up the phone.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
