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95% mortgages

Compare 95% LTV mortgage deals

Our broker partner Mojo can help you find a 95% loan-to-value (LTV) mortgage

We’ve partnered with Mojo Mortgages to help you compare 95% LTV mortgages with an expert.

  • Advisers who can look at mortgage rates from across the market

  • Get an expert-recommended deal

  • They can help you apply when you're ready

What is a 95% LTV mortgage?

A 95% mortgage is a loan to purchase a property. 5% of the property price is made up of your deposit, and the remaining 95% makes up the mortgage loan.

The 95% is known as the loan-to-value (LTV) ratio. The higher the LTV, the higher the interest rates tend to be.

95% is usually the maximum LTV you can get for a mortgage. There are a few 100% mortgage (or no-deposit) deals on the market. But these normally require a family member to act as a guarantor or to put up their savings or house equity as a deposit.

How does a 95% mortgage work?

A 95% mortgage works by you putting down a deposit worth 5% of the property price or value, whichever is lower.

You then borrow the remaining 95% from your bank or building society. Most deals are repayment mortgages, which means you repay this loan plus interest over the course of your mortgage term. At the end of the term, you own the property outright.

The table below shows how much a 5% deposit is for different property values.

Property price 5% deposit amount 95% mortgage amount

Lenders normally cap the amount you can borrow at around 4.5 times your annual income.

So, even if you save up a deposit worth 5% of your dream home's price, you still need enough income to borrow the remaining 95%.

Pros and cons of 95% mortgages

The advantages of 95% LTV mortgages include:

  • A 5% deposit is easier to save than a larger deposit
  • They can help you get on the property ladder and start building equity in your own home faster
  • This might allow you to keep some money back, which could be used for home improvements or emergencies

The disadvantages of 95% include:

  • You normally pay higher interest rates compared to those who put down larger deposits
  • You usually pay far more in interest over the course of your mortgage compared to borrowing less for a lower LTV deal
  • There's a greater risk of negative equity (when your property is worth less than what you owe on your mortgage, which could be happen if house prices fall) compared to lower LTV deals

How can I choose the right 95% mortgage rate?

As with all mortgages, there are 2 main types of 95% deals: fixed rate mortgages and variable rate mortgages.

With a fixed rate, your interest rate is the same for a certain period. During that time, you know exactly what you repay each month.

This means you can budget more easily as you know what’s coming out of your account and don't need to worry about your payments increasing. But if interest rates fall, you won't benefit from a decrease in your payment amount.

With a variable rate deal, your interest rate can change during the deal period. The main types of variable rate mortgage are:

  • Standard variable rate (SVR) mortgage – you're moved on to your lender's (usually higher) SVR at the end of your initial deal period, at which point people normally remortgage to a cheaper deal
  • Discount mortgage – the rate is set at a specific amount below the SVR and rises and falls with it
  • Tracker mortgage – the rate is at a fixed amount above an external financial indicator (normally the Bank of England base rate) and fluctuates alongside it

Some variable mortgages have collars, which mean the rate won't fall below a certain level. More rarely, they can also have caps which prevent the rate rising above a certain amount.

The benefit with a variable deal is that if interest rates fall, your repayments could too. But if rates rise, you’re likely to pay more each month. This means you need to make sure you could afford a significant increase in monthly payments if you choose a variable rate.

Should I wait and save up a bigger deposit?

There are currently 95% LTV mortgage deals in the market, but you may want to consider saving up a larger deposit.

Even if you can save up a bit extra to bring your deposit to 10%, this would give you access to 90% LTV mortgage deals. Which normally come with better interest rates, and there is a greater choice of deals generally.

But if it would take you a long time to save a larger deposit and you'd like to get on the property ladder sooner rather than later, a 95% mortgage may be a preferable option.

Whether a 95% mortgage is right for you depends on your individual circumstances. Whatever you decide, make sure you're in the financial position to afford a home and the mortgage you apply for.

Alternatives to 95% mortgages

The main alternatives are:

  • A lower LTV mortgage
  • A 100% or no deposit mortgage
  • Shared ownership
  • Help to Buy - Wales
  • Right to Buy or Right to Acquire

A lower LTV mortgage may be an option for you if you're able to save up a larger deposit. You may want to open a Lifetime ISA which offers a 25% boost on savings for your first home up to a certain amount. If a family member is able to contribute, they could also gift you part of your deposit to help you get a higher LTV deal.

100% or no deposit mortgages are fairly uncommon but there are some available. These may take the form of a guarantor mortgage, which requires someone to repay the loan if you can't. Or you can get family assist or offset mortgage, in which a family members puts up their savings or house equity as a deposit.

Shared ownership is a government scheme that allows you to buy a share of a home, rather than the whole property. You pay rent on the remaining amount. You can increase your equity share over time until you own it fully.

Help to Buy equity loans are only currently available in Wales. Available on new build homes, you need to save a 5% deposit and you get a 20% equity loan to boost this.

Right to Buy may help you to buy your council home at a significant discount from market value. Right to Acquire is a similar scheme for housing association tenants.

What our expert says

95% LTV mortgages might help you get on the property ladder sooner rather than later. But if you can save up a bigger deposit, you normally get access to a better range of deals. At Mojo, we can help you get a mortgage in principal, also known as an agreement or decision in principle, and then apply for a deal when you're ready.

Need more help?

Can I get a 95% mortgage on a new build house?

Lenders usually want a 15% or 20% minimum deposit for a new build property. But there are schemes available that can help you get a new build home with a smaller deposit.

The Deposit Unlock Scheme can help you buy a new build home with a 5% deposit, but you must use one of the participating builders and lenders.

If you're in Wales, you can still get apply for a Help to Buy equity loan. This provides a 20% equity loan to boost your 5% deposit.

And you could consider shared ownership on a new build property, which would mean you could purchase a share of the property and pay rent on the rest (so the deposit amount required would be less).

What costs are involved with 95% mortgages?

The main costs involved with a 95% LTV mortgage are:

  • Your deposit - you need a deposit worth 5% of the property value or price (whichever is lower)
  • Interest rate - the higher your initial interest rate, the larger your monthly repayments are, and vice versa
  • Arrangement fee - this is the main fee when getting a mortgage and can vary depending on the deal
  • Legal fees - the cost of a solicitor to sort the legal paperwork may be included as part of the mortgage deal, but it's not always so make sure you check the terms and conditions to find out how much it is
  • Valuation fee - lenders usually want to conduct a property valuation to make sure the amount you're paying for the property matches up, but this fee may also be included as part of a deal
  • Broker fee - some mortgage advisers charge for providing advice, but not all do

It's important to be aware of all the associated costs and fees when comparing mortgages so you can choose a deal to suit your circumstances.

Can I get a 95% mortgage as a first-time buyer?

Yes you may able to get a 95% LTV mortgage as a first-time buyer. A barrier to home ownership is often saving for a deposit. 95% mortgages can be appealing to those looking to buy their first home, as a 5% deposit is more manageable to save than a larger one.

But whether you're eligible for a 95% mortgage deal depends on your individual circumstances, and whether you meet the lender's criteria. As well as a 5% deposit, they look at your income, outgoings and credit history.

Can I get a mortgage with less than 5% deposit?

5% deposit is usually the minimum amount accepted by mortgage lenders.

There are a few 100% LTV deals on the market which allow you to get a mortgage with no deposit. But these usually require a family member to act as a guarantor, or put up their own savings or home equity as a deposit.

Skipton Building Society has launched a 100% mortgage deal for those with a strong track record of rental payments, but who are struggling to put away money for a deposit.

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Page last reviewed: 27 June 2023

Reviewed by: Claire Flynn


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