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What is a 95% Mortgage?

First things first, a 95%  mortgage is a type of mortgage  that allows you to borrow 95% of the property price from a lender.


The remaining 5% is covered through your deposit.

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You might have guessed it, but this all depends on your individual circumstances and affordability, which can be assessed by an expert Mortgage Adviser.

However, as you now only require a 5% deposit for a 95% LTV Mortgage, many prospective homebuyers could find they have enough to buy their first property. 

For example, let's say you were aiming to buy a home for £200,000 through 90% LTV Mortgage. Your deposit would have been £20,000.


With a 95% LTV Mortgage, your deposit could be as low as £10,000. You could even use savings from a Lifetime ISA to put towards your deposit. If you still think you might not have enough take a look at other page on buying a home with a small deposit. 

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The new Mortgage guarantee scheme will see the UK Government act as a safety net for lenders. In the worst case scenario, if or where the Government will take on some of the losses incurred by the lender.









In return, lenders will have greater incentive to offer 95% Mortgage products to people looking to buy a new home, as they'll carry less risk. 

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If you've been trying to buy your next home but haven't yet saved up a big enough deposit, you could be eligible to apply for a 95% loan to value (LTV) mortgage.


This means that you may be able to buy a home with a 5% deposit.

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There's a few things you should know about the new scheme:


  • It will launch from April 2021

  • You can purchase properties up to £600,000 with a 5% deposit

  • It's open to all homebuyers (not just first time buyers)

  • Normal Mortgage affordability checks will still be in place (a Mortgage Adviser will help with this) 

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The UK Government will be introducing a new scheme to incentivise lenders to reintroduce 95% Mortgage deals from April 2021.



These types of Mortgages have been available previously but the number of 95% Mortgage  products has largely decreased during the pandemic. 

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Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is £495.

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