Yes. A number of lenders offer 95% mortgages, so a 5% deposit, £12,500 on a £250,000 home, can be enough to buy. You’ll face higher interest rates and stricter affordability checks than with a bigger deposit, and you’ll need to pass the lender’s income and credit criteria.
The short answer
- A 5% deposit (a 95% LTV mortgage) can be enough to buy, £12,500 on a £250,000 home.
- Expect higher rates and stricter affordability checks than with a larger deposit.
- Reaching a 10% deposit is the most valuable jump, opening more lenders and better rates.
Buying with a 5% deposit is entirely possible in 2026. It means taking a 95% loan-to-value (LTV) mortgage, you put down 5% of the price and borrow the other 95%. On a £250,000 home that’s a £12,500 deposit against a £237,500 loan. Several high-street and specialist lenders offer these deals, and various government and lender-backed schemes have supported low-deposit lending in recent years. The route exists; the question is whether it’s the right one for you, and whether you can meet the tighter conditions that come with it.
The trade-off for a small deposit is cost and scrutiny. Because the lender is exposed to more risk, 95% mortgages carry higher interest rates than lower-LTV deals, and affordability checks are firmer: the lender must be satisfied you can keep up repayments even if rates rise. That makes a clean credit history, stable income and tidy bank statements more important than ever. If you want the full context on how deposits shape what you can borrow, our guide to getting a mortgage walks through the moving parts.
How your deposit changes the deal (illustrative)
| Deposit | Loan-to-value | Typical rate | What it means |
|---|---|---|---|
| 5% | 95% LTV | Highest | Widely available, but priciest and strictest |
| 10% | 90% LTV | Higher | More choice and a noticeably better rate |
| 15% | 85% LTV | Moderate | Broad choice of competitive deals |
| 25%+ | 75% LTV | Lowest | Access to the best rates on the market |
What a bigger deposit buys you
Deposits work in bands, and each threshold you cross unlocks better rates. Moving from 5% to 10% is the single most valuable jump: it opens up far more lenders and can shave a meaningful amount off your monthly payment. If you’re close to the 10% mark, it’s often worth waiting a few months to get there. That said, waiting has a cost too, rent paid while saving, and the risk of prices rising faster than your savings. There’s no universal right answer; it depends on your local market and your circumstances.
Several routes support low-deposit buyers. A mortgage guarantee element has, in recent years, encouraged lenders to keep offering 95% deals by sharing some of the risk with the government. Shared ownership lets you buy a share of a home, often 25% to 75%, and pay rent on the rest, which shrinks the deposit and mortgage you need. And on new-builds, some developers offer incentives that effectively top up your deposit. Each has trade-offs and its own eligibility rules, so it’s worth understanding the full menu before assuming a 95% mortgage on the open market is your only option.
Affordability, not just the deposit, decides how much you can borrow. Lenders generally cap lending at around 4.5 times income, though some stretch further for certain professions or higher earners. They also “stress test” your finances, checking you could still pay if interest rates rose. That means clearing existing debts, keeping credit-card balances low and avoiding a new car-finance agreement in the months before applying can all lift the amount a lender will offer. With a 5% deposit, where the loan is already large relative to the property, passing these checks comfortably is what turns an in-principle yes into a firm mortgage offer.
Mind the negative-equity risk
With only 5% equity, a fall in house prices could leave you owing more than the home is worth. That matters most if you need to sell or remortgage during a downturn. If you plan to stay put for several years, it’s a smaller concern, but go in with your eyes open.
Making a 5% deposit work
If a 5% deposit is your realistic starting point, a few things strengthen your case. Get your credit file in good order well ahead of applying, register on the electoral roll, and avoid new borrowing in the run-up. A Lifetime ISA can boost first-time-buyer savings with a 25% government bonus on up to £4,000 a year, and family “gifted deposits” are widely accepted with the right paperwork. Above all, apply to a lender you actually fit: at 95% LTV a declined application stings, because the pool of lenders is smaller to begin with.
It’s also wise to get a mortgage in principle early. This is a lender’s written indication of what it would be willing to lend, based on a soft credit check that leaves no mark, and estate agents increasingly expect to see one before they take an offer seriously, particularly from a first-time buyer with a smaller deposit. It won’t guarantee the final loan, but it signals you’re a credible buyer and gives you a realistic budget to house-hunt within, rather than falling for something a 95% lender would never fund.
This is precisely where a broker earns their keep, matching you to a lender whose criteria you meet, first time. Vetted Wealth is a free concierge service connecting you with independently vetted, FCA-regulated brokers, including first-time-buyer specialists in Cornwall and across the country. You can compare related answers and guides through our mortgages hub. This is information, not personal advice, and your home may be repossessed if you don’t keep up mortgage repayments.
In summary
- A 5% deposit (a 95% LTV mortgage) can be enough to buy, £12,500 on a £250,000 home.
- Expect higher rates and stricter affordability checks than with a larger deposit.
- Reaching a 10% deposit is the most valuable jump, opening more lenders and better rates.
- The main risk is negative equity if prices fall, less of a worry if you plan to stay put.
Sources and further reading
- Mortgages MoneyHelper
- Mortgage rules and guidance Financial Conduct Authority
Read the full guide
For the complete picture, see our in-depth guide: Mortgage Deposits: How Much You Need.
Speak to a vetted mortgage advice specialist
This is free information, not personal advice. When you’re ready, we’ll match you with an independently vetted, FCA-regulated specialist, free, and with no obligation.
