The advantages of 95% LTV mortgages include:
The disadvantages of 95% include:
The main alternatives are:
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.
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.
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).
The main costs involved with a 95% LTV mortgage are:
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.
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.
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.
are a type of loan used to buy a property. The mortgage is secured against the value of the property.
are where you only pay back the interest each month. When your mortgage term comes to an end, you still owe exactly what you borrowed at the start.
aren't that different from a regular mortgage. But there are some important differences.
See the latest stats on first-time buyer demographics and prices, and compare first-time buyer mortgages for the best deals.
The first step to getting a house is making the decision about whether it's better to rent or buy.
Here's some tips to bear in mind when you view property.
The final hurdle before the house is officially yours – swap contracts and insure the building.
Buying a house is an expensive process. Gifted deposits can help.
We look at guarantor mortgages and how they could help you get on the property ladder.
Page last reviewed: 27 June 2023
Reviewed by: Claire Flynn
YOU SHOULD THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME/PROPERTY. YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
The Financial Conduct Authority does not regulate mortgages for commercial or investment buy-to-let properties.
Confused.com is not a mortgage intermediary and makes introductions to Mojo Mortgages to provide mortgage solutions.
Confused.com and Mojo Mortgages are part of the same group of companies.Confused.com 2nd Floor, Greyfriars House, Greyfriars Road, Cardiff, CF10 3AL, United Kingdom. Confused.com is a trading name of Inspop.com Limited and is authorised and regulated by the Financial Conduct Authority. FRN 310635
Mojo is a trading style of Life's Great Limited which is registered in England and Wales (06246376). We are authorised and regulated by the Financial Conduct Authority and are on the Financial Services Register (478215). Mojo’s registered office is The Cooperage, 5 Copper Row, London, SE1 2LH, and head office is WeWork No. 1 Spinningfields, Quay Street, Manchester, M3 3JE.
To contact Mojo by phone, please call 0333 123 0012.
cookie usage
We use cookies, some of which are essential to make our website work. For us to use our non-essential cookies, we need your consent. You can consent by accepting all or alternatively, manage your cookies at any time. For more information, read our cookie policy.
